$31 Billion 4 Week Bill Prices At 0.08%, Primary Dealer Participation At 2010 Record, As Indirects Flee

Tyler Durden's picture
  • 76.46% allotted at high 0.08%
  • Median rate at 0.07%, low rate no longer 0.000% - now 0.04%
  • WI was bid at 0.08% at 11:30 - auction came exactly at price expected
  • Bid to Cover: 4.34, last week at 3.82
  • Primary dealer bid: record $115.89 billion
  • Primary dealer hit ratio: 19.47%
  • Indirect hit ratio: 80%
  • Primary dealer take down at record high for 2010: 73.4%, compared to average 61.05%
  • Indirect take down at record low for 2010: 17.9%, compared to average 30.97%

Comparing the Primary Dealer and Indirect Participation demonstrates that PDs now singlehandedly control the 1 month Bill auction. Indirect take down has dropped to a 2010 low level at 17.9%, while PD take down has surged to a high of 73.4%. 


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Mr Lennon Hendrix's picture

Does the Treasury know what is happening, or do they think things will turn around eventually? 

What if one day Hank Paulson and Timmy Geithner held a press conference and said, "The US Governement is insolvant, and we are now backing our new currencie by gold."  Huh?  Why not?  Why not steal the thunder right before it comes crashing down?

I would bet against this happening though......

truont's picture

They know exactly what is happening.  They are just trying to "kick the can" as far down the road as possible.  "Extend and Pretend".

Mr Lennon Hendrix's picture

Have they not kicked the can over the cliff?  Do they not have to now step over the cliff to pretend to kick it?  So Timmy steps over the cliff.....

Mad Max's picture

We may well be in the Wily E. Coyote phase right now - off the cliff, but not enough people are looking down to make things happen.  Just remember where W.E.C. went the instant he looked down.

faustian bargain's picture

Wile, depressed and embarrassed, holds up a sign to the Road Runner and the audience: "I wouldn't mind - except that he defies the law of gravity!" The camera cuts to the Road Runner's response on a second sign: "Sure - but I never studied law!" The Road Runner speeds off the floating rock onto a safe haven to the right as the cartoon fades.

Everyone is desperately hoping to be the roadrunner.

Shameful's picture

The Road Runner is part of hte problem. We see the Road Runner run through a painting or run across thin air and we think we can do it to, but we can't. We can't all trade like GS (HFT) and can't all borrow at the discount window, so when we try to do what they do we get killed. The Road Runner is tempting us to do something stupid by showing under a very narrow set of circumstances that someone can do it.

Anonymous's picture

What IS happening? What does this mean?

Mr Lennon Hendrix's picture

gold had an inverse relationship with the dollar all last year.  As Snoop D O double G said, "Gold up, DXY down."  Now gold doesn't care what the fiats are doing, their actions and percieved strengths have been rendered meaningless.  At the end of the race to the bottom, gold will finish on the top.

gunsmoke011's picture

I am no expert - but what it means to me is that NOBODY - and I mean NOBODY other than those who absolutely have to - want to buy our debt because they know they will not be getting paid back.

Pinkfleud's picture

Wash, Rinse, Repeat... lol

10044's picture

At some point, the paper needed to print dollar on will cost more than treasuries! That's what happened in zimbabwe

Anonymous's picture

Did you ever stop to think that is why the .gov heavily subsidizes cotton farmers? Things that make you go hmmmm???

Anonymous's picture

That March 31st deadline for destruction to commence is proving to be the real deal. To bad Citi bank let the cat out of the bag

Anonymous's picture

what March 31 deadline ? Is it the deadline for $ 1.6 T federal debt coming up for refinance ?

hedgeless_horseman's picture

Remember when...


China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China's total U.S. dollar-denominated investments could be twice as high.


"Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.


His answer drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.


But later in the day, Chinese Vice Premier Wang Qishan said it was important for the two nations to show the world they are working together through their joint economic dialogue...

...while selling all US Agency debt and no longer rolling some/many/most/all maturing treasuries?

Art imitates reality:



Mission Stupid's picture

First they went after the Euro.  Now it is the Pound.  The Dollar is next.

gunsmoke011's picture

Really quite remarkable that the market seems to simply ignore what is happening -- really remarkable

deadhead's picture

aaah, just the continued hype and propaganda ponzi scheme offloading more shares to bagholders.  i was quite proud that Goldman reiterated their conviction buy on STI this a.m., one of the worst regionals that exists.


the equity market is setting up nicely for a serious tankage, possibly a crash.  and for all those bulls out there, howz come you're not buying judging by the comical volumes on the spx........looking forward to lots of big red candles in the not too distant futures.....

Anonymous's picture

I am just novice for this: PD means FED and Indirect take means other buyers? Please advice. Thanks in advance!

faustian bargain's picture



List of the Primary Government Securities Dealers Reporting to the Government Securities Dealers Statistics Unit of the Federal Reserve Bank of New York

BNP Paribas Securities Corp.
Banc of America Securities LLC
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies & Company, Inc.
J. P. Morgan Securities Inc.
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
Nomura Securities International, Inc.
RBC Capital Markets Corporation
RBS Securities Inc.
UBS Securities LLC.

Anonymous's picture

I find it fascinating that this site and others, which are supposed to be about buying and selling in the stock market, are advising people NOT to buy and sell stock. I read these sites so I can understand how our financial system works and I concluded long ago that you couldn't really make money unless you were willing to devote 24 hours a day and a lot of mathematical prowess--and you had insider information. Suffice to say, I own only one stock, which I inherited, and have been putting my money into things that actually have value, as opposed to buying pieces of paper. Even if I understood completely how to play the game, I have ethics and morals; so I'd make a lousy trader. And if the country falls apart any further, at least I have plenty of things to either eat, drink and barter.

deadhead's picture

I find it fascinating that this site and others, which are supposed to be about buying and selling in the stock market, 

This site really isn't about buying and selling stocks, i.e. a trader's site......

Mark Beck's picture

On schedule. We will see how much primary slack is really built into the system. I expect it to wane towards the end of the CY2010 2nd quarter, earlier if equities take a hit (-15%). The shift should be more and more short term for the primary dealers. But, if they do not reinvest in T debt to cover losses (loans and credit), there could be some spikes.

Mark Beck 

Anonymous's picture

If 50% of the bids received a rate of less than .07% (the median) how can 76.46% have received the .08% rate?

What does "alotted at high" actually mean?

Tom123456's picture

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