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$21 Billion 10 Year Auction Closes At 3.9, Record 3.72x Bid To Cover, Indirect Bid Overtakes Primary Dealer Take Down
- Yield 3.900% versus expected 3.948%
- Record Bid To Cover 3.72 Versus Average 2.97 (previous 3.45)
- Indirect Take Down 43.10% vs Average 40.24% (Previous 35.09%)
- Indirect Hit Ratio 47.71%
- Primary Dealer Take Down 40.6%
- Primary Dealer Hit Ratio record low of 17.5%
- Allocated at high 99.62%
The 3.72 Bid To Cover is an all time record. On the other hand, the yield of 3.9% is the highest since June 2009. Demand for 10 Years at this rate seems to be in place.
For the first time since September Indirect Bidders take down more than Primary Dealers. China is back.
The Primary Dealer hit ratio of 17.5% is at multi-year lows: Primary Dealers made sure this auction was well bid.
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Well played, Benron and Turbo Timmy. Well played.
Liesman on the Citi trading floor not the least bit ironic giving a play by play
Meanwhile: http://news.yahoo.com/s/ap/20100407/ap_on_bi_ge/us_no_taxes
About 47 percent will pay no federal income taxes at all for 2009. ...
"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.
So roughly half of the population now officially has absolutely no stake what so ever in the "Revenue" side of the Gubermint's ledger sheet. Yeah, what could possibly go wrong?
Saw that. The general concept has been bouncing around for months now. I guess the MSM is waking up to it.
Let's all vote ourselves free money! We can loot it from others using our government agents to do the dirty work for us!
Glad to see this getting more play in the media. Some MSM, such as WSJ, have been harping on this for several years. All folks need to have skin in the tax game. I have felt for some time that this has skewed parts of the electorate into thinking that there is a free lunch.
Not only have parts of the electorate come to think that there is a free lunch, we have now convinced ourselves that eating free lunches is a money-making career opportunity.
Your logic only works if you believe that the Social Security tax (which is disproportionately paid by lower income folks who may pay little or no Federal income tax) really goes to fund the government's obligation to pay them those promised benefits when they retire. We all know how "actuarially sound" the accounting is for the Social Security system. Maybe I'm overly bearish, but I don't expect for one moment that folks in their 30's or 40's are ever going to see the Social Security benefits they think they are going to be entitled to. So from my perspective, the Social Security tax which folks are paying now (and a lot more than 47% of the folks are paying it) is just a straw man for more additional tax receipts to fund our current excessive expenditures. Of course if the government decides it actually wants to keep Social Security going, the brown stuff really is going to hit the fan since there's no way we're going to be able to pay for it. I actually don't think that will happen. Even if I'm only half right, those folks who think they are going to get a Social Security check one day should realize, unless they're incredibly stupid, that they have a really big stake in the "Revenue" side of the Gubermint's ledger sheet.
Well, since SS is already paying-out more than it's taking in (a full 5-years ahead of schedule), then you indeed have a point. The Fed Income Tax is the big-daddy of Gubermint collections, though - and half of the electorate have no skin in that game.
Congrats, they can vote themselves "rich" at the expense of others. As I ask above, what could possibly go wrong?
Maybe a new Voting Rights Act ?? Verifiable, Ceritifiable Taxpayers only ??
That's a delusional dream I once had. Makes no sense today.
docj, or can I just call you CJ?
Anyway for people who handle tax as well as investment in the US, know the low end no pay is nothing new.
But the article is incomplete and at times not accurate. SS is a tax (as ruled by the supreme court) with no gaurentee of benefits, unless you are collecting it now (yesterday). All payroll taxes, just like income taxes, go into the Treasury general fund. Even if there was a SS surplus, it would go into the general fund and an IOU put in its place.
Every time the FED expands the money supply, the USD diminishes in value. This is a hidden tax on all of your savings, including IRAs and 401(k) that hold USDs. This should be factored in when looking to maintain real worth. So everybody who has savings in USDs has something at stake. Also, the taxpayer is held responsible for repaying the debts of the nation. Which is a claim on future tax on wages.
Mark Beck
Are we sure that it is China supplying the indirect bid?
Would be quite a coincidence considering the recent weak auctions and China being stand offish regarding the Yuan.Who knows what promises and assurances he was making over there but I am sure the words "Tax Payer" was used frequently. Is it just me or does it appear we showing serious signs of weakness and reliance on the actions and non actions of other nations. I am wondering what is keeping Russia at bay from using our disadvantage of effective action to bully us around knowing full well we will not respond in any forcible manner.
As for who else was involved in the indirect I think it is safe to assume Mr. Toyoda is not rushing to buy 10 years after our recent propaganda campaign against one of the lifebloods of the Japanese economy.
I've never previously subscribed to the far-right view that Obama is deliberately working to destroy the US, but that claim is becoming more and more plausible by the day recently.
As has been the case for the last 20-25 some odd yrs. our presidents don't wipe their ass unless someone tells them which hand to use and whether to use toilet paper or not.
Telegenics, charisma and media hype will only carry a "product" so far...what we see now is the end result of the slick marketing of defective products...clearly this calls for another trillion dollars that we don't have to fix a product no one is buying...LOL.
it's the treasury and it's investment banker, the FED
they will keep putting chips into the casino until everyone submits to the master plan
doesnt matter who supplies the bid, fact is deflation wins. ask rosenberg.
Oh boy. What did Timmy give China now for our treasury turds????
Timmy to give the Chinese -
a five, a five, a five dollah footlong!
geee now I fully appreciate why the yuan report was suddenly delayed
Taiwan.
Bingo!
no its the greeks
And,,,,,of course HeliBen comes on and backs-up the auction results with rather tempered comments on US economy.No shit, that's why we have to go to DJIA 36000! Bring it on and hit the press Ben!
I don't know, that was about as upbeat as Ben has been in a while. Could this spook the market?
That's debatable (bonds holding) but I suppose we're back to tighten/deflate argument. Man, it's a cloudy picture.
At what point are "Bid To Cover" and "Indirect Take Down" and Indirect Hit Ratio" and so on no longer relevant? It's similar to using a common class room ruler to measure ten miles of mountain road.
While it may be helpful when measuring the level of manipulation insanity, since the Treasury auction dance is deliberately obscured from public view so as to confound and confuse, I might as well go back to counting the number of angels on the head of a pin in order to determine the level of public adoration of God.
24,583,234 and 24,583,235 and 24,583,236..............Damn, lost count. 1 and 2 and 3 and 4......
Just like that, you would put hundreds of analysts and media pundits out of work?
I see they got a newly installed ink-cartridge ... with colors =)
Turbo, print this page and submit a copy with your expense report from China. All those karaoke charges from mama shan's place will be forgiven.
I see that someone got the memo.
Who it was, we don't know, but somebody put the arm-twisting on somebody somewhere.
the seeming success of this auction is built upon a platform of falsehoods and manipulation.
how long before the house falls in? anybody?
This summer.
If you want to reply to someone's post you could hit the ugh "reply" button. Then type your message.
So, how do you come up with "this summer" pre'tel?
What a dissapointment, where are the "bond vigilantes"?!? Yield will never be above 4.5%
At this pace the "stimulus ponzi recovery" can last at least a couple more years.
Dow 36K then Dow 2K by 2020
It is really coincidental that today is the day that the Greek Problem is comming to be seen for what it is. Liquidating Greek and Euro positions means that the money has to go somewhere. It is like being lost in the woods for a few days and then finding that hollow tree for shelter. Nothing good about it, it just beats getting rained on for one night.
Seeing these nutters claim this as some acceptance of US policy is really goofy.
Stick save!!!!!....oh wait...is this the panic buying of money moving out of European banks to park it somewhere?
Or, maybe China just reminded Timmy how they could crush us at will.
The hockey analogy was so perfect.
Yes, I think this is a lot of money that's rightly terrified of the Eurozone and looking for the only other major port. Shame this port is under zombie attack, hurricane warning, and on top of a fault zone that's a couple 100 years overdue.
What do you expect? Athens is burning.
Yeah....Grease...get it?
Well, Obummer did just say he won't retaliate with nukes. Perhaps that's a prelude to the coming Chinese invasion of CA. They'll buy more paper in exchange for the peaceful submission of the Golden State.
And it's just a coincidence that Timmy's in Beijing today...
I'm buying hats and party favors and a kegger in anticipation of a stunningly successful 30yr tsy auction tomorrow. BTW, Steve Liesman will be there to explain why the laws of supply and demand are no longer relevant, as the fed has this whole thing under control. Going with the flow from here on out.
I'll take a wild guess and say that the Brits are the incremental indirect buyers here. There might be more urgency to lower Euro (and pound) exposure as much as possible before the PIIGS $h!t really hits the fan.
But that's just grasping at straws...
bid to cover doesnt always mean anything. fed could encourage primary dealers to bid for a larger amount even if well back of market. any treasury dealer would know a 4.25 bid for 20 billion would not be hit but would make bid to cover look good. also, the strong stop probably hurt a lot of dealers who shorted prior to the auction to facilitate their bidding. the dealers might pare back their participation in the thirty year as a result.
Your enemy down the street is paying for your home loan, your car payment, and your groceries and gas bills while youre unemployed...what could possibly go wrong!!
<sacasm>Why can't you consider the possibility that the Fed is right?</sarcasm>
Well, the FED IS right! Print up enough money out of thin air, and you can get the zero volume stock market bubble higher, and buy up the treasuries too! AND buy off the media to support it all! Hooray for us! <sarcasm of course>
Well, Keynes did say, "Owe your banker £1000 and you are at his mercy, owe him £1 million and the position is reversed."
I think it's a game of bluff. In this case China could have blinked first but the contest is far from over.
Kids, it's only April of the first year of 10 years of trillion dollar plus deficits. Many wondrous and strange things will happen along the way, many unanticipated bumps and crises will occur, and still the auctions, rain or shine, fail or succeed, will go on and on and on, creeping in their petty pace...to the last syllable of recorded time.
"Demand for 10 Years at this rate seems to be in place."
Looks that way. The slow upward drift of the 10 year (which will adversely impact housing sales and values), coupled with upward drift of oil (and prices at the pump), will soon start to swamp the recovery boat, leaky as it is already. I don't see us falling off a cliff, but sinking slowly into quicksand.
Rates are a function of supply, and supply is abundant, demand good at that rate, but for rates to go/stay lower, funds must be lured out of risk assets, and that will take some doing. Fear would be the only motivation, I'm afraid.
What was the direct takedown?
China never left. They keep switching purchases from different pockets.
DJIA is down almost 100 right now. It will be interesting to see if this only persists for 2-4 days, giving the primary dealers lots of leeway to unload their cargo a at decent price (the 10 yr and tomorrow's 30yr) before yields head back up, or if this is the start of a "real" equities correction (potential Dow Theory divergence anyone? - albeit shorter term than I like to see).
If yields spike up, and the market spikes down, then it may be time to run for the Black Hills.
Lets see here gold is going crazy- dollar also moving up (but if this was BC or before crisis) 1 euro would probably buy about half a dollar right about now ) .With that said rates should have definitely been less than 3.9 with what is going on over there in the EU but again we are not who we used to be in the eyes of the world. The Dow is not having a good day as consumer credit (or what makes the economy in the US grow is down ) and you would normally expect even a greater demand for bonds . The FED may be applauding this auction for now but to me it looks like the jury has already deliberated its verdict and that would be to stay away from bonds and the dollar . This auction was a giant fail under the circumstances of todays news . When the greek panic subsides watch how fast rates go up . I believe JP morgan's outlook for 2010 is 5.5% 10yr, once that threshold is broken and the rates are higher than expected all hell will start to break loose .
oops double posted .
REACH AROUND!
what makes you think those bid to cover numbers are real? haven't the CPA (I mean the communist party of America) already proven they are good at statistics-on-command. China bid? More like timay going there to beg for our masters to donate to our causes, afterall, nearly 40 million Americans are on food stamps for those who like denninger are still dreaming about the power of a superpower called USA.
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