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$42 Billion 5 Year Auction Closes At 2.175%, 67.34% Allotted
- Yields 2.175% vs. Exp. 2.208%
- Bit-To-Cover 2.81 vs. Avg. 2.41 (Prev. 2.63)
- Indirects 60.9% vs. Avg. 51.10% (Prev. 54.77%)
- Indirect Bid-To-Cover 1.37
- Alloted high 67.34%
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Bit-To-Cover
easter egg??
What makes this haul especially nice is that it didn't add to the national debt because, you know, that would be illegal.
Greatest Financial Bubble known to mankind, bar none.
But like any bubble the question is when to short it. I can't believe it's where it's at. Sure Zimbabwe Ben is a huge buyer but I've been waiting for that hot money to force yields higher or at least force commodities to all time highs. I'm looking at you Oil and Silver!
About 73 percent of the Indirect's tendered bids were accepted, though the Primary Dealers actually tendered twice that amount in this auction.
So... why is the someone(s) in the Indirects pool being so "aggressive", when we know that it will only be a matter of a couple of weeks before another wave of 5 year notes hit new issue? And just "who" is the aggressive party(ies)?
Timmy must be convincing himself how much of a genius he is these days...
We don't know the breakdown of the PDs bids. As we saw with the 30 yr the other week, the PDs seem to be offering to buy in size, but at a price they know is going to miss....
As for who are the indirects, I would start by looking at who's just flipped MBS into the Fed...
I hope you realize you're implying a Cash for Trash Stealth Quantitative Easing 2.0, or where I come from, CFTSQE2.
I agree: backdoor monetization via "you buy Treasuries, I'll buy your GSEs", with prenegotiated discounts, the whole thing. If Fed is serious about stopping purchases of GSE late February early March 2010, TSWHTF as future issuances will actually have to have interest rates discounting the value of the currency.
My head hurts. Thanks for the easy CAPTCHA.
That is essentially what it is... but with an extra twist:
"Foreign central bank, we will take this MBS off your hands if your purchase Treasuries. Not only will you be helping meet our deficit spending needs, you will be giving investor the illusion of 'buying dollars' as well."
And... The Foreign Central Banks are saying:
"Fine... no way in hell I want this MBS pile of dung".
This is getting more insane by the minute. I truly believe that the FED is effectively serving as the Treasury Department's special off-balance sheet funding vehicle. Our recent experience with SIVs and other off-balance sheet entities (since Enron, for example) haven't really turned out that well.
good point. If they rename Maiden Lane "Jedi" or "Raptor" we'll know we're really in trouble. Andy Fastow didn't go to work on that big Fed trading desk, did he?
Let´s tax stupidity,.. the revenue will bring us out of this crisis,..with a surplus!
the more the FED buys, the higher the indirects go
With a ceiling to current debt difference of $94b (as of 11/20) and two t-bill auctions of $86b ($42-5yr, 44b-2yr) this week, how does the Treasury expect to keep under the debt ceiling especially with $32b of 7-yr notes going to auction tomorrow?
Other auctions:
$31b of 6m 11/23
$30b of 3m 11/23
$32b of 1m 11/24
Ceiling?
There is a ceiling?
Surely, there is only sky above.