$32 Billion 3 Year Auction Prices At 1.027%, 3.06 Bid To Cover

The creep ever higher in the short-end of the belly continues, with the first 1%+ 3 Year auction pricing since July, specifically today's $32 billion in 3 Years printed at a 1.027% high yield, a 19% jump in one month. The increase in yield to 6 month highs resulted in an increased in demand as well, with the Bid To Cover coming at 3.057, still lower than the trailing 12 month average of 3.121. As can be seen on the chart below, after Indirects virtually withdrew from bidding in October just as the Fed attempted to make it clear that the short end was going to zero, they have been coming back since, and took down 39.4%, with Primary Dealers being allocated 44.5% and Directs 16.2%. Of the PD bids, we expect that much of the auction will be syphoned right back to the Fed in the next 3-4 months, with all the interest on the auction eventually being remitted back to the Treasury in the latest confirmation that all of US public finance is now a ponzi fraud.

Comments

[primefool]

Heeheee: Headline from cbs markets

"Treasury buys $32 billion in 3-year notes at 1.02%"

I guess we can excuse the confusion - treasury selling /buying?!! Fed buying /selling? Whatever!!!

[primefool]

To the extent the Fed increasingly becomes the primary buyer of Treauries - I guess the yield becomes kinda irrelevant ( fed receives coupons from Treasury and sends it back to the Treasury - less expenses, commissions to PDs etc of course).

So the yield may increasingly become completely 'notional" - and can be pegged wherever the fed and treasury choose. Right?

[greased up deaf guy]

ALL YOUR BONDS ARE BELONG TO US...  MAKE YOUR TIME...

[cranky-old-geezer]

1.027% attracting buyers?  With that miniscule return more than wiped out by shrinking dollar value?

Boy, people really are desparate these days.