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$29 Billion 7 Year Auction Prices At 1.989%, 2.98 Bid To Cover, Indirects Surge As Fed Frontrunning Goes Global
Today's 7 Year auction closed at a record low 1.99% High Yield, and a Bid To Cover that was tied for second highest ever, at 2.99. The reason for this strong showing: Indirect Bidders, which took down 56.7%, a jump of 33% from July, and broadly as expected now that everyone, including foreign investors are frontrunning the Fed ever further right, in anticipation of lower yields in the 7-30 Year part of the curve. Of course, the very unfortunate side effect of this (for the banks), is that this will merely accelerate the flattening of the curve, which already is at more than 30% flatter than the record steepness seen earlier this year, when as we warned, every single fund was in the steepener trade, and the unwind would leave many of them in the dust.
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when does the rubberband snap back? only a matter of time.
Agreed - only a matter of time. Too many knuckleheads long this trade and defending the "bubble". Starting to take baby steps into TBT. Yields can certainly go lower but they can go a lot higher - and quickly.
its short term greed...i cant wait to see who gets wiped out in the end..of course the US will but who will be the other dumb shits left wiping there asses with bonds?
Risk of 7-year inflation being greater than 2% annualized: 90%
Risk of 7-year dollar devaluation being greater than 2%: 99.9%
Risk of outright default on the 7-year notes: 20%
Value of sheeple and QE combo to continue this charade: PRICELESS
Qualified?
This is not going to end well.
Sung to Enrique Iglesias ft. Pitbull - I Like It Lyrics
[Timothy]
One Love.. One Love
Ben Bernanke, Timothy
Ya’ll know what time it is.
We go set it off tonight, just go
Set the FED on fire, just go
Bernanke! Holla at them like…
[Bernanke]
Economy please excuse me
If I’m coming too strong
But tonight is the night
We can really let go
Congress is out of town
And I’m all alone
President is on vacation
And he doesn’t have to know
No oh oh, oh oh
No one can do the things I’m gonna wanna do to you
No oh oh, oh oh
Shout aloud, printin loud
Let me see you grow!
[Chorus]
Baby I like it
The way you move on the DOW
Baby I like it
Come on and give me some growth
Oh yes I like it
Printing like never before
Baby I like it
I, I, I like it.
[Lionel Richie]
Party, Karamu, Fiesta, Forever
[Bernanke]
Economy please excuse me
If I’m misbehaving, oh
I’m trying keep my hands off
But you’re begging me for more
Rates, rates, rates
Give a low low low
Let the time time pass
‘Cause we’re never getting old
No oh oh, oh oh
No one can do it better turn around I’ll give you more
No oh oh, oh oh
Shout aloud, printin loud
Let me see you grow!
[Chorus]
Baby I like it
The way you move on the DOW
Baby I like it
Come on and give me some growth
Oh yes I like it
Printing like never before
Baby I like it
I, I, I like it.
[Timothy]
Come DJ..That’s my dj..
I’m a Brooklyn Boy..You know how we play
I’m playing what u wanna play..
What u give me got me good.
Now watch me..
It’s a different species, get me in DC
Let’s party on the White House lawn
Fox News tired of Harry Reid
Here goes Timothy all night long
Pick up Barack and Pelosi and let’em know that it’s on
Pa’ fuera! Pa’ la calle!
Dale mamita tirame ese baile!
Dale mamita tirame ese baile!
I see you paying me, you see me taxin’ you
I love the way you move
I like them things you do like..
[Bernanke]
don’t stop baby, don’t stop baby
Just keep on inflating along
I won’t stop baby, won’t stop baby
Until you get enough
[Lionel Richie]
Party, Karamu, Fiesta, Forever
[Chorus]
Baby I like it!
The way you move on the DOW
Baby I like it!
Come on and give me some growth!
Oh yes I like it!
Printing like never before
Baby I like it! I, I, I like it!
Baby I like it!
The way you move on the DOW
Baby I like it!
Come on and give me some growth!
Oh yes I like it!
Printing like never before
Baby I like it! I, I, I like it!
Party, (oh yes I like it!) karamu, Fiesta, Forever!
Oh yes I like it!
Party, karamu, (oh yes I like it!)Fiesta, Forever!
There's a historical precedent for this: JGBs. They still have tremendous liquidity, low yields, yet it's JGBs - not Treasuries - that J. Kyle "Keynesian Endpoint" Bass is targeting. Gold, bonds, stocks - it's all the same thing: Rich people trying to preserve their imaginary "wealth" while the real economy of production and consumption goes begging. Good luck with that.
Replaced by the Sultans of Swap
http://www.financialsensearchive.com/fsu/editorials/gtlong/2010/0224.html
Why do rates have to go higher? Seriously, If the stock market is headed down and by most of our expectations down a lot, more money will move into bonds. US Treasuries may have long term repayment issues but, who's don't? JGBs? Gilts? Bunds? Take a look at their debt to GDP ratios, social systems, and the aging of their populations and you think we have a problem?
Same thing with the $US. The Euro is a better currency to hold than the $US? Given the European debt and demographic issues you'd rather own Euros? Yen? Hey the Chinese are the ones buying up the yen to buy more real estate in Japan - it's only a 1-2 hour flight from the Tianjin to Guangzho coastal belt where all the wealth is concentrated. But, Japan has about the worst demographics this side of...well, Germany.
And for the true goldbugs, when you go to buy a loaf of bread with your 1oz coin, exactly how much are you going to shave off to pay with it? If it gets to $2500/oz you better have pretty sharp knife OR be buying a truckload of bread.
I'm not saying that things don't suck. Just that most of these things will play out over time, yes rates will go higher but they will likely go lower first.
think silver my friend...
http://bullion.nwtmint.com/silver_stagecoach.php
Already divided for that bread purchase.
E$actly. It comes in much more useful denominations and has uses other than jewelry and 'end of the world' currency.
We actually are adding SLV to client portfolios as a short term hedge to stocks (already underweight) as well. The technical formation is better than Gold (in our opinion) and we have a target of $22.00
Of course rates will go lower - and this huge herd of "contrarian" dittoheads who have been chanting in unison "buy gold, inflation up, bonds down" for years now will continue to fund their bad bond bets with profits from the gold bubble.
There are a lot of smart people out there who are also goldbugs. Doesn't make being a goldbug smart. The goldbugs were able to see through the bank-created hype but their thinking has not progressed and as long as the price of gold keeps rising, it probably won't.
People are starting to realize the problem (too much "wealth", not enough work) but it's going to take some time.
Love the record lows! Surely the world must look at America and think "Yeah I can lend my money there. They have a great economy and have never defaulted on their obligations or devalued their currency"
Or...they may be thinking 'I can park my money there and know that I wil get it back'. It might be a flight to liquidity as much as it is a flight to safety. People buying the 10-30yr sector of the curve aren't necessarily going to hold those positions for 30 years...
The problem with the flight to liquidity, is who is quick and who is dead. When milliseconds count, count on spending minutes on the help line.
++
Frontrunning this curve!!! AHAHAHA!!!!!
disclaimer ... I am a real little guy,
I live in a Sears catalogue house in a dirty railroad town
and I just trade stocks with the other shoeshine boys.
but my take on this treasury thing is the same as aurum's and Harry Wagner's ...
the thing has simply gone ballistic,
as you say there are now many people anticipating that it HAS to go higher.
Besides, treasury notes are now the ONLY thing going up.
One thing I have always understood about the markets,
ever since the Hunt Brothers decided to give me a boost with my coin collection
and I sold it and started buying stocks,
is
"What goes up, must come down."
I don't know how or why. I don't need to.
On the other hand, I do know, from years and years of trading experience,
what happens to the prices of gold and silver and other commodities
when interest rates rise.
for the rich, its game over.
No other place to hide. Treasuries are the last refuge.
And we all know how worthless they are, regardless of these silly debates about inflationvs deflation. worthless. paper. they don't even burn good in your fireplace.
Make sure you have a metal coffee cup somewhere
and practice sayiing "can you help me get something to eat" with a heavy accent ....
bye ....
It's not really a bubble if the purchases are fictitious.
Don't you get it?
It's not real. It's NOT real. It's NOT REAL. IT'S NOT REAL!
Maybe Tyler can start combining Treasury auctions results with Pro wrestling news.
Example:
$29 Billion 7 Year Auction Prices At 1.989%; Jake "the Snake" Roberts announces his retirement.
http://bleacherreport.com/articles/444004-the-snake-calls-it-a-career-jake-roberts-retires-from-wrestling
I think it's the same demographic.
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