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$24 Billion 10 Year Bonds Price At 3.21%

Tyler Durden's picture





 

And so another $24 billion in liquidity is sucked out of the market, at least temporarily until PDs flip Cusip QN3 back to the Fed. The bond priced at a 3.21% high yield, and a 3.00 Bid To Cover, the lowest so far in 2011. Nonetheless, the bond came inside to the WI which was about 3.222%, confirming the risk off aspect of today's market. Primary Dealers took down 44.4%, with Direct responsible for 8.4%. This means Indirects were left with 47.2%: better than April, but the second lowest of 2011, only better than April's 42.4%. The other question of how this will settle, together with yesterday's $32 billion and tomorrow's $16 billion, under the debt ceiling, we will discover in a few days.

 


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Wed, 05/11/2011 - 13:08 | Link to Comment GOSPLAN HERO
GOSPLAN HERO's picture

"The sloping park, great calamity,
Through the Lands of the West and Lombardy
The fire in the ship, plague and captivity;
Mercury in Sagittarius, Saturn fading."

 

Wed, 05/11/2011 - 13:49 | Link to Comment Note to self
Note to self's picture

 . . . This is the dawning of the Age of Aquarius, Age of Aquarius . . . 

Wed, 05/11/2011 - 13:12 | Link to Comment firstdivision
firstdivision's picture

There is no ceiling - Neo

Wed, 05/11/2011 - 13:39 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

Sniiiifff!  What you cooking Timmy?

Wed, 05/11/2011 - 13:14 | Link to Comment RobotTrader
RobotTrader's picture

35-year bull market in bonds remains intact.

Anyone who dollar cost averaged, month in, month out during this time period has beaten stocks, hands down.

As for the Chinese, who hold huge slugs of this debt, they are not about to sell when 95% of their holdings are still in a winning position.

Even though any day, we can simply default and leave them holding the bag.

That is the reason China won't buy more gold, they are just plain stupid.

Wed, 05/11/2011 - 13:15 | Link to Comment lolmao500
lolmao500's picture

So Forrest Gump was wrong when he said : Stupid is as stupid does... he should have said... Stupid is as China does...

Wed, 05/11/2011 - 13:36 | Link to Comment camaro68ss
camaro68ss's picture

ROBO! Where do you get your info from? you need to turn into the light

Wed, 05/11/2011 - 13:19 | Link to Comment Marty Rothbard
Marty Rothbard's picture

They are buying more gold. Government, and private, every day, every minute, every second.

Wed, 05/11/2011 - 13:16 | Link to Comment tmosley
tmosley's picture

You sure you're talking about bonds, and not PM's over the last ten years?

Oh wait, you don't want to hear that.  You want to pretend you have been buying bonds for the last 35 years.

I also love how you don't seem to realize that the Chinese ARE buying gold.  They are accumulating at unheard of rates.

Why don't you tell us some more about LULU?

Wed, 05/11/2011 - 13:19 | Link to Comment SheepDog-One
SheepDog-One's picture

Robo is to ZH as Mikey is to American Chopper...totaly worthless but fun to have around to watch his chowderhead dork antics.

Wed, 05/11/2011 - 16:56 | Link to Comment unununium
unununium's picture

As Chumley is to Pawn Stars.

Wed, 05/11/2011 - 13:22 | Link to Comment buzzsaw99
buzzsaw99's picture

Egad, that is really shallow. China produces gold bitchez.

Wed, 05/11/2011 - 13:25 | Link to Comment SheepDog-One
SheepDog-One's picture

Infamous Robo post- 'China wont buy any more gold as theyre just plain stupid'...guess you never read the Chinese book 'The Art of War' and besides being an obvious amateur chess player, likely you dont even know how to play, its a lie that China isnt buying more gold they are in fact buying at record pace.

Wed, 05/11/2011 - 13:33 | Link to Comment GOSPLAN HERO
GOSPLAN HERO's picture

Robo,

You sure don't look like your mother.

Wed, 05/11/2011 - 13:54 | Link to Comment 4shzl
4shzl's picture

Even a troll like you Wndy is bound to get it right once in a while.  I sure hope that sneering little monkey in the bowtie walked the walk after his loudmouth promise to short Treasuries yesterday.  Soros disowned his punk ass years ago; ZH should be smart enough to do so as well.

Wed, 05/11/2011 - 13:53 | Link to Comment tired1
tired1's picture

Question: How does one tell who actually holds the paper debt? Is it that clearing house in NYC? Perhaps the Chinese are passing the paper quietly like te Japanese did a few years ago by trying to smuggle US psper into Switzerland.

Wed, 05/11/2011 - 13:15 | Link to Comment lolmao500
lolmao500's picture

And another 24 billion gone from the pension funds.

Wed, 05/11/2011 - 13:15 | Link to Comment MonkeySmoke
MonkeySmoke's picture

Who makes up the primary dealers, indirect dealers and direct dealers? This is new to me and I am curious who is purchasing. Thanks in advance for any help.

Wed, 05/11/2011 - 13:18 | Link to Comment SheepDog-One
SheepDog-One's picture

You.

Wed, 05/11/2011 - 13:16 | Link to Comment sdmjake
sdmjake's picture

WB7's Kraken is what they see in the mirror.

Wed, 05/11/2011 - 13:16 | Link to Comment Prof Gulliver
Prof Gulliver's picture

Give Geithner and Bernanke their due. They have manipulated the bond vs. stock market successfully for two years. And their game shows no signs of ending. At this point, they believe they can move any market anyway they want whenever they want. And I'm beginning to believe they can. I stand in awe.

Wed, 05/11/2011 - 13:20 | Link to Comment SheepDog-One
SheepDog-One's picture

Stand in awe of satan like the rest.

Wed, 05/11/2011 - 13:35 | Link to Comment Marty Rothbard
Marty Rothbard's picture

I confess, I am amazed at the stupidity of the American investor (with the exception of company insiders), and the generosity of overseas trading partners, and bond holders in general.  However, all of history is against the Bernank, and the Geethner.   Nash will not be denied.  Mises is not deceived.  When the equilibrium fails, it really will different this time, but only in degree.   When it finally does blow up, there will not be much left standing.  I will be deep in my bunker.  Pity it's not in Argentina.

Wed, 05/11/2011 - 13:41 | Link to Comment tahoebumsmith
tahoebumsmith's picture

Yeah kinda reminds me of a guy I worked for a few years back. He too ran his businesses like a ponzi scheme, flipping money from one account to another, manipulting numbers to up his lines of credit, opening up new lines of credit to pay the interest on the old ones and kiting checks from one account to the other. All was great, he strutted around town in his new Benz and built the new Million dollar McMansion near the beach, he was the envy of the whole town. Everything was just grand until one day we showed up for work and the place was locked up and swarming with bank representatives and marshalls from the FED. He played the game very well for about 5 years until he ran out of ways to lie and manipulate, kinda like Madoff and all the other Ponzi Schemers. What you see happening in America is exactly the same thing and sooner then later they will run out of ways to manipulate and lie to keep the truth of their failed economic recovery from coming out.

Wed, 05/11/2011 - 17:31 | Link to Comment Marty Rothbard
Marty Rothbard's picture

You sure he's still in the slammer?  Maybe they let him out to work at the federal reserve.  Like one of those WWII movies, where they recruit a bunch of convicts, to carry out a suicide mission behind German lines.  I'm sure the Bernank would appreciate his technique, and maybe he could teach little Jimmy something.

Wed, 05/11/2011 - 13:16 | Link to Comment DB Cooper
DB Cooper's picture

Is this why the Treasury is having a garage sale on AIG - to stay under the debt ceiling?

Wed, 05/11/2011 - 13:22 | Link to Comment lolmao500
lolmao500's picture

They don't need to, they have trillions in the pension funds.

Wed, 05/11/2011 - 13:14 | Link to Comment GolfHatesMe
GolfHatesMe's picture

Ceiling - Schmeiling

Wed, 05/11/2011 - 13:18 | Link to Comment crash_davis
crash_davis's picture

The debt ceiling is merely a suggestion.

Wed, 05/11/2011 - 13:29 | Link to Comment Shell Game
Shell Game's picture

It is the Pirate's Code, afterall..

Wed, 05/11/2011 - 13:33 | Link to Comment MrBoompi
MrBoompi's picture

Who's gonna stop the Federal Reserve and their agents from monetizing debt and manipulating the markets? Congress? The President? Don't make me laugh.

Some people still don't understand who's really in charge.

Wed, 05/11/2011 - 13:21 | Link to Comment falak pema
falak pema's picture

what the sun sees the moon ignores...

ares and venus are side by side but not inside outside

as for apollo he is on his own as his chariot draws his circle,

water is what fire hates most of all and venus is

molten from shimmering wetness that none can ignore.

Mercury flies to Olympus bringing tidings of desamores

between sons and daughters so full of themselves.

They are human beyond recognition in their intemperate intemporality.

Wed, 05/11/2011 - 13:25 | Link to Comment rubearish10
rubearish10's picture

Fort Knox is selling PM's to make room for bond issuance.. It's right there in front of you. You see, when I buy my next S55 and pay the 50% inflationary mark-up, I'll sell some gold to offset the premium. Uhhhh, sorta the same here.

Wed, 05/11/2011 - 13:23 | Link to Comment pazmaker
pazmaker's picture

It can't go on forever...you can only make shit smell good for so long....I had some friends that worked in huge commercial chicken houses... the smell was nauseating but they had grown accustomed to it.  They would say what smell?  .....until they had a good 5-10 days off and then went back and said damn that smell!!!

 

We may have many people use to the smell of this shit...but sooner or later the true smell of this shit will come through and it will end.

Wed, 05/11/2011 - 13:27 | Link to Comment hambone
hambone's picture

Wonder what Gross and Rogers are thinking of their T's short positions as T's and dollar both go the wrong way from their trade...

I don't doubt they are right...just not sure when they'll be right?

Wed, 05/11/2011 - 13:24 | Link to Comment buzzsaw99
buzzsaw99's picture

The PDs will flip them back to the fed within two weeks at a tidy profit.

Wed, 05/11/2011 - 13:32 | Link to Comment lolmao500
lolmao500's picture

Yeah that's what I thought when I read that.

Wed, 05/11/2011 - 13:29 | Link to Comment lolmao500
lolmao500's picture

I'm sick of this BS. Let bondzilla come and tear down this whole goddamn rotten building.

Wed, 05/11/2011 - 13:30 | Link to Comment JW n FL
Wed, 05/11/2011 - 13:35 | Link to Comment I am Jobe
I am Jobe's picture

I can't even do the Runge Kutta Method on this. WTF. This is beyond the math realm. F the FEDS.

Wed, 05/11/2011 - 13:36 | Link to Comment vast-dom
vast-dom's picture

holy crap silver down majorly, again.

WTF is going on?

Wed, 05/11/2011 - 13:35 | Link to Comment I am Jobe
I am Jobe's picture

So is GOLD. WTF. Euro dump

 

Wed, 05/11/2011 - 14:29 | Link to Comment Cruel Aid
Cruel Aid's picture

Euro dump/DXY oversold, What's the fuckin difference. Somebody out there is jerkin the chain.

Wed, 05/11/2011 - 13:37 | Link to Comment tmosley
tmosley's picture

CME told their friends that there would be a margin hike today, and they shorted it big time, likely on the exactly correct amount of margin.  

Wed, 05/11/2011 - 13:54 | Link to Comment Piranhanoia
Piranhanoia's picture

Try to find it for the origami price.

Wed, 05/11/2011 - 13:44 | Link to Comment Common_Cents22
Common_Cents22's picture

It ain't speeding if you don't get caught!  There is no ceiling if nobody does anything about it.   Constitution? what's that?  Laws? nonsense. 

Wed, 05/11/2011 - 13:48 | Link to Comment crash_davis
crash_davis's picture

rights? there are none.

Wed, 05/11/2011 - 13:48 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

The other question of how this will settle, together with yesterday's $32 billion and tomorrow's $16 billion, under the debt ceiling, we will discover in a few days."

 

Calling Andy Fastow, your country needs you!!!

Wed, 05/11/2011 - 13:54 | Link to Comment JuicyTheAnimal
JuicyTheAnimal's picture

RE:  Debt ceiling.  Mr Durden apparently you did not get the memo.

They changed the rules of substraction. 

For example, 9 - 5 is now 8.  15 - 18 = 2.  I won't go into details because it's quite complicated.  You probably wouldn't understand.  Don't get excited.  It only applys to the Jeethner calculations. 

Wed, 05/11/2011 - 13:55 | Link to Comment djsmps
djsmps's picture

Funniest CNBS article of the day

 

US Not in 'Jobless Recovery': White House's Goolsbee

The United States is not in a jobless recovery, and the private sector is creating jobs in a broad-based way that augurs well for a sustained recovery, White House economic advisor Austan Goolsbee said on Wednesday.

While drags on the economy continue, including higher fuel prices, a housing sector "in the dumps" and state and local government spending cuts, positive signs on the U.S. economy are beginning to outweigh negative ones, Goolsbee said in a speech in Chicago.

 http://www.cnbc.com/id/42988763

Wed, 05/11/2011 - 14:06 | Link to Comment metastar
metastar's picture

Its all downhill when the White House dealers start using their own Afhgan grown drugs.

Wed, 05/11/2011 - 13:59 | Link to Comment Zymurguy
Zymurguy's picture

Damn the ceiling!  Full speed (borrowing) ahead!!!

Wed, 05/11/2011 - 14:04 | Link to Comment bbq on whitehou...
bbq on whitehouse lawn's picture

"Direct responsible for 8.4%" So thats some funds and what not. Still if Indirects were left were taking home 47.2%. It must mean  someones currency is starting to price them out of markets.

Think Mexico/Canada maybe some China, Brazil, EU etc. The US is losing the currency war or "race to the bottom". So now what does the Fed and Treasury do? The Fed is losing currency ratio pricing in asia. Sure they got some Anglos' but this isn't about bed buddies like Canada and Australia.  This is about asia. This is about currency pricing. So stopping Qe2 is a good thing? No.

If you want to run with the big dogs you need to bite. The Fed will have to drop to parity on Brazil or an asian currency. So who is next on the hit list.

South Korea seems like an easy target. (thinking out loud) Would ("wood" seems more appropriate given the impact of this policy) South Korea be a good place to park currency and wait for parity or is there somewhere else?

Wed, 05/11/2011 - 14:11 | Link to Comment RobotTrader
RobotTrader's picture

I warned you guys.

Debt ceilings don't matter.

Infinite Fiat rules.

They can print and spend whatever they want.

And inflation can be snuffed out with paper shuffling and electronic digit flipping.

Wed, 05/11/2011 - 14:14 | Link to Comment dexter_morgan
dexter_morgan's picture

Now that's sure a financial system to be proud of.

Wed, 05/11/2011 - 14:15 | Link to Comment RobotTrader
RobotTrader's picture

Wonder who Eric King is going to interview next?

May I suggest the CEO of Abercrombie and Fitch?

New intraday highs today.

LOL...

Wed, 05/11/2011 - 14:16 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Can we get a post about the pop'n of dat' SILVER BUBBLE ..... LOL

I told ya this week was a coming .... Just wait, its not done deflating

 


 

Mozilo reached out to borrowers as part of a "little experiment" to understand the reasoning behind making only minimum payments on so-called pay-option loans, a practice that boosts the total amount due, the 67-year-old CEO told investors Wednesday in New York.

"What we're finding out is that they're pretty smart," Mozilo said. "It's like voters: Individually they're sort of idiots, but collectively they seem to make the right decisions."

"CEO Makes Call on Pay-Option Loans: It's Risky", from Bloomberg News.

 

Wed, 05/11/2011 - 16:28 | Link to Comment Hephasteus
Hephasteus's picture

It's alright. We got guys standing around on street corners selling silver for 100 bucks an ounce and selling gold for 2400 an ounce right out in public. Of course they are simply passing it around without anything really changing hands or happening. But the show sets the price. We're even selling entire mine outputs per day to make it appear robust and vital and happening.

We're a going concern market maker bitch. LOL

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