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$21 Billion 10 Year Closes At 2.92%, Direct Bidder Participation Surges Again

Tyler Durden's picture




 

The second auction in that brief period between the end of QE2 and start of QE3 has closed and the Treasury has just raised another $21 billion in exchange for pieces of paper promising said amount in 9 years and 10 months, yielding 2.92%, or the lowest amount in 2011. And just like in yesterday's 3 Year auction which saw a drop in Indirect interest, today's 10 Year continues the long-term trend where foreign banks recycle less and less dollars via US paper. At 42%, the Indirect Takedown was the lowest of 2011 and the worst since October 2011. Who saved the auction: once again that suspicious category - the Direct Bidders, which took down 13.9% of the full amount, the highest since January's 14.9%. The Direct Bidder hit rate was a low 29.1%, as $10 billion of competitive bids were placed in the auction. Like yesterday, the final result came surprisingly tighter to the When Issued which was at 2.935% before the close. And interestingly for those who care about such things, there was a block trade of 6,895 10-Yr Treasury Futures at 124-14 just before the pricing, and a Vol. spike of 29,565 contracts at 12:50pm: is the Fed now pulling an ECB in the TSY derivative market? Either way, regardless of what manipulation may have been involved, the entire curve has flattened substantially.

And the curve:

 

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Wed, 07/13/2011 - 13:29 | 1452643 baby_BLYTHE
baby_BLYTHE's picture

bubble is getting even bigger

Posted on Ron Paul's Facebook moments ago

 

QE3 here we come. And gold is responding, shooting way up near all-time highs. Of course I predicted this. Bernanke will destroy the dollar unless he is stopped

 

http://www.facebook.com/ronpaul

Wed, 07/13/2011 - 13:34 | 1452691 eureka
eureka's picture

US EMPIRE, baby - the BIGGEST ENTITLEMENT PROGRAM ON EARTH.

Wed, 07/13/2011 - 13:58 | 1452775 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Too bad it did not need to be that way.  America had wealth, and it had gold, but now it is all gone, held by private bankers (the Fed) and stored in IOUs like SSFT numbers, dollars, bonds, etc.

If only America had not given up its freedom and held strong to the consitution.  A country of Lost folks, here.

Wed, 07/13/2011 - 13:26 | 1452651 Cleanclog
Cleanclog's picture

Why not?  Debt begets debt until the Great Repudiation.

Wed, 07/13/2011 - 14:14 | 1452843 unununium
unununium's picture

> for those who care about such things

 

Hu could possibly care about such things?

 

Off with the blood slow ad networks!

Wed, 07/13/2011 - 13:28 | 1452662 LawsofPhysics
LawsofPhysics's picture

Expected.  Three card monte with only two cards.  No repudiation until there is only one card left.

Wed, 07/13/2011 - 13:33 | 1452663 Franken_Stein
Franken_Stein's picture

 

Now watch the debt ceiling drama currently playing in the Congressional Kabuki Theatre come to a sudden and surprising "resolution", a turn of events sent from heaven by the people doing God's work.

 

Wed, 07/13/2011 - 13:52 | 1452751 SeverinSlade
SeverinSlade's picture

Thus sending EVERYTHING (including gold and silver temporarily) down, down, down.

CPI and PPI will likely come in at low rates, showing that Bernanke is "right" when saying inflation is transitory.  In a month or so we'll have a strong dollar and QE3 will be demanded by Washington and Wall Street.

Keep stacking physical but sell your paper into this rally.  There will be one final chance to BTFD.

Wed, 07/13/2011 - 13:31 | 1452678 fuu
fuu's picture

I think someone should investigate whether these participation rates are on the level. 

Wed, 07/13/2011 - 13:31 | 1452679 Traianus Augustus
Traianus Augustus's picture

As the Ponzi turns...

Wed, 07/13/2011 - 13:31 | 1452681 Cognitive Dissonance
Cognitive Dissonance's picture

I love the smell of desperation in the morning. Smells like dirty sock puppets.

Wed, 07/13/2011 - 13:33 | 1452686 Dr. Richard Head
Dr. Richard Head's picture

One thing is for sure, GoldToe www.goldtoe.com sockpuppets are NOT money.

Wed, 07/13/2011 - 13:44 | 1452729 Cognitive Dissonance
Cognitive Dissonance's picture

NOT what I was expecting when I clicked the link. I have much to learn grasshopper. :)

Wed, 07/13/2011 - 14:23 | 1452886 Dr. Richard Head
Dr. Richard Head's picture

My curiousity has the best of me now.  What did you expect? 

Wed, 07/13/2011 - 14:41 | 1452900 Cognitive Dissonance
Cognitive Dissonance's picture

I thought it was a Gold mining company or something. My imagination is limited to my attempts at humor. :>)

Wed, 07/13/2011 - 13:34 | 1452689 lesterbegood
lesterbegood's picture

Direct Bidders...offshore Caribbean banks plunge protection team.

Wed, 07/13/2011 - 13:46 | 1452733 Cognitive Dissonance
Cognitive Dissonance's picture

Let's see, that's OCBPPT.

Can't we just stick with PPT and assume otherwise? :)

Wed, 07/13/2011 - 13:35 | 1452695 Jim in MN
Jim in MN's picture

In udder gnus....

News Corp. drops BSkyB bid

Another nuclear plant finds quake damage in Japan (finally)

Quake damage to turbine blades found at Tokai

Damage to turbine blades, apparently caused by the March 11th earthquake, has been found at a nuclear power plant in Ibaraki Prefecture, eastern Japan.

The Tokai Daini plant, about 100 kilometers north of Tokyo, automatically shut down in the quake. The operator of the plant, Japan Atomic Power Company, has been checking the plant closely since May in a regular checkup scheduled to last 6 months.

It says it discovered friction marks on the blades and other parts of the reactor's turbines.

The company believes the damage was caused by the March 11 quake as similar marring had been reported in another plant in Niigata Prefecture in the wake of an earthquake in 2007.

The utility says some parts were also found missing from a device that injects coolant into the reactor. It also discovered cracks in equipment attached to the upper parts of the reactor.

It says it is investigating whether those defects were also caused by the March quake.

In the giant quake, the Tokai Daini plant lost its outside power sources, and had to rely on emergency generators until regular power returned.

Earlier this month the government nuclear safety body found the level of quake-resistance of the electrical equipment at the plant was below the standard set by power companies.

Wednesday, July 13, 2011 22:26 +0900 (JST)

 

Wed, 07/13/2011 - 13:39 | 1452709 Sudden Debt
Sudden Debt's picture

who cares about that shit anymore?

 

Wed, 07/13/2011 - 14:27 | 1452902 Jim in MN
Jim in MN's picture

It's all grist for the mill, oh eternal waver.

Wed, 07/13/2011 - 13:38 | 1452698 Sudden Debt
Sudden Debt's picture

Is buying bonds a tradition?

Is that something you do every 13th of July?

 

 

Wed, 07/13/2011 - 14:01 | 1452788 Josh Randall
Josh Randall's picture

+++7/13 - cue Fiddler on the Roof's "Tradition" song and dance sequence

Wed, 07/13/2011 - 13:37 | 1452700 GeneMarchbanks
GeneMarchbanks's picture

USA! USA! USA! Wow! This is invigorating. Incredible, you can just float around if you stop believing in physics.

Wed, 07/13/2011 - 13:44 | 1452723 LawsofPhysics
LawsofPhysics's picture

Yes, to quote one of my favorite authors.  "Flying, as it turned out, was a simple matter of throwing yourself at the ground and missing"

Wed, 07/13/2011 - 13:42 | 1452705 chartcruzer
chartcruzer's picture

Rattling the sabre of default is complete and utter circus.  Cracks me up.

What's interesting after looking into the new budget cuts being proposed as part of the debt ceiling show, is that the $2T of proposed cuts are to be spread over 10 years and virtually none of the cuts are to occur in the next few years.   So, in other words, planet Washington has once again declared that it is going to fix none of the huge systemic debt problems facing the country.   Interesting that in concert the FED is already foreshadowing more QE.  You can expect 'increases' in commodity prices to abate below 2% in the next quarter opening the door for the next QE package.

It's into the rocks at speed folks.  The gauntlet has been cast.

It's going to be hell of a ride.

Lets see if we can make a ton of cash.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s235939273]&disp=P

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s238082247]&disp=P

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s238253528]&disp=P

 

;-)

Wed, 07/13/2011 - 13:39 | 1452707 Alcoholic Nativ...
Alcoholic Native American's picture

Save us anonymous billionaires!

 

Wed, 07/13/2011 - 13:39 | 1452708 Slin
Slin's picture

There was a piece posted here on zerohedge about the use of the 10yr to hurt gold postions.  If anyone has a link, I failed to save it.  Thx

Wed, 07/13/2011 - 13:54 | 1452761 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

HES is flash crashing.

Wed, 07/13/2011 - 13:58 | 1452777 Slin
Slin's picture

Fire on a platform

Wed, 07/13/2011 - 14:19 | 1452867 Bansters-in-my-...
Bansters-in-my- feces's picture

Manipulation you say...!

The nerve...

To think in such a way...! Is unpatriotic,and un- American....

There is a FEMA cell waiting your arrival.

Wed, 07/13/2011 - 14:28 | 1452907 web bot
web bot's picture

You can probably tell from my postings that I am not an economist. What I do know however is that QE3 is setting the stage for economic collapse.

There is nothing more to say...

 

Wed, 07/13/2011 - 15:34 | 1453197 Prof Gulliver
Prof Gulliver's picture

Ben and Tim remain in the sweet spot. They are selling their bonds and bills like hotcakes. Just let a little air out of the stock market, add a bit of a crisis overseas, pump it into bonds, and all is well. You have to give them their due. They masterfully play stocks vs. bonds beautifully, and have done so for 2 years. At these interest rates, they probably don't care if the debt ceiling is ever raised. Pretty soon, anyone wanting to by U.S. bonds will have to pay the Treasury interest instead of vice-versa.

Wed, 07/13/2011 - 16:58 | 1453563 luigi
luigi's picture

Hercule Poirot could not fail to see a curious chain of coincidences in the auction held just after one week of panic on the European markets following the downgrades by the three major rating agencies. Something that could be seen in hindsight as the equivalent of carefully timed bombs placed in order to direct the panik stricken crowd in whatever direction they could be led to believe they would find a safe harbour... Stricken by this sudden thought, Hercule rised his right eyebrow and told himself this to be an idea to be deeper worked on later, for now the coming 10 year Italian bond auction needed his total attention... "the devil is in the details", he thought...

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