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$43 Billion 2 Year Auctions Closes At 1.034% High Yield
- Yields 1.034% vs. Exp. 1.0296%
- Bid-to-cover 3.23 vs. Avg. 2.85 (Prev. 2.68)
- Indireect 45.2% vs. Avg. 46.9% (Prev. 49.5%)
- Allotted at high 27.16%
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Is that good or bad?
This auction actually went pretty good.
While the high yield did not quite meet expectations, it was really close. The bid to cover this time around was quite high-- and this time the bidding activity wasn't totally dominated by indirect bidders, as in prior auctions.
Now that being said, these were 2 year auctions-- and interest at the shorter and of the curve has been (again, it's all relative) pretty decent.
The longer maturity notes will draw a little more scruntiny later this week, but I don't think things really get interesting until the Fed exhausts the $300 billion piggy bank next month (we're down to aboout $10 billion). It's been quite an impressive balancing act by the Fed, to date.
we got stuck with only 45% of it. i guess we should be grateful......
In layman's terms, what the hell does this mean? Whats a good source to get educated on these numbers?
Try this site...
http://tinyurl.com/fyez3
+1
I spent Sunday with family. I watched the kids invent a new game that I dubbed "Bailout". Oswald had a big pile of money. Clarabelle and Archibald would come up to Oswald, who would proceed to hand them money. They would then run off on a mad dash to who knows where, depositing notes here and there, only to return promptly for more money, of which Oswald was only too happy to hand out. I asked Oswald what Clarabelle and Archibald did with their money. He replied, "I don't know...they just come back here and I give them some more."
In this new game, Oswald was the Federal Reserve, and Clarabelle and Archibald were Banks Too Big to Fail. The money being given away was printed from the First Bank of Parker Brothers (i.e. Monopoly).
Oswald kept handing out money to Clarabelle and Archibald until all of it was gone and nobody could play the game anymore. All that was left was a big mess for everyone to clean up.
Kids hold all the answers to the universe.
I am Chumbawamba.
Do you comment on the MW forum too... Chumbawamba looks familiar.
Nope. There is but One Chumbawamba, and it is I. Ok, except for the band by the same name from which I cribbed it.
I am Chumbawamba.
What's wrong with this picture? Regardless of the duration or interest rate, the bid-to-cover just keeps getting better and better regardless how much paper is being issued.
What bizarre world do we live in? Who believes this is good news? How can this scam be seen as anything other than a scam? I'm not talking about the average Joe on the street but investment professionals seem to think this is good.
Has greed overcome all caution? Has self interest trumped fiduciary responsibility?
Someone pinch me because I must be dreaming.
you picked the perfect alias name for that sentiment brother.
"Has greed overcome all caution? Has self interest trumped fiduciary responsibility?"
Exactly, perfect way to describe this day and age in two sentences.
mountain hawk, if you are interested in this stuff, I recommend reading The Creature from Jekyll Island by G. Edward Griffin.
Well,
it seems that short term interest rates are creeping up, meaning that people are demanding a higher return for investing in US debt i guess.
stock market crash will take care of that shit
ditto-as well as other assets classes.
How is it that the continued auction of treasuries is defying the universal laws of supply and demand? The massive supply of treasuries should have led to a huge jump in rates already. I guess we you can create money out of thin air the laws of supply and demand no longer apply, either that or we will have massive unintended consequences in the near future. Which do you think is more likely?
How much did the Fed spend buying in this auction? Do they have any money left, or will they continue buying in excess of what was originalyl alloted? Why is it impossible to see what part of the auction was the Feb buying our own bonds? Would this auction have been a success without Fed buying?
Can someone explain to me the differentiation between the FED's $300B fund which seems to be supporting the Treasury market and direct monetization? If the $300B fund is nearly exhausted what is to prevent the FED from ramping it back up again?
The Fed cannot directly monetize newly issued Treasury debt, but they are authorized to buy Treasury securities in the secondary market. The one thing that ZH has done a great job in highlighting is how much of this "fresh debt" is actually being monetized very shortly after the fact. If as if the Fed is negotiating with third parties (primary dealer, foreign central bank, etc.) ahead of time and guaranteeing purchases, so long as there is participation at acceptable rates.
Nothing, except politics, is preventing the Fed from ramping up purchases again. But we have gotten to the point where the Fed has pretty much "spun" Washington and the American public on the idea of recovery-- so the justification now for an additional $300B purchase appears incongruent with an "exit strategy".
Besides there is still plenty of (bad) agency debt and MBS capacity for the Fed to use to keep spreads from going crazy.
I'm a simple creature and can't for the life of me understand why anyone would want to hold US dollar based investments for any length of time. Call me crazy, but would the interest even cover the dollar devaluation that's happening and could easily go much further? Somebody....please, a little help here?
Ship your money off to the gnomes, and see how that works out.
(Expect the IRS black helicopter for large deposits)
Some of it is obviously Fed guarenteed buy backs, but it can also partially be explained by those entities trying to maintain the value of what they already have, i.e. China / Japan et al. If you want to protect what you already have you buy more, albeit the shorter dated, just to maintain the value of your existing boatload. You also sell the long dated bonds as fast as is feasible.
I think the "Treasury Auction Results" are all fabricated. I seriously think they put whatever numbers they think sound about right on that release.....really.
That is how far down into the rabbit hole our nation has gone......this is all going to end very suddenly.
Average Joe American is going to wake up one morning, flip on MSNBC and get that "deer in the headlights" look....mouth open......thinking, "WHAT THE F@%K" is going on?
I think the "Treasury Auction Results" are all fabricated. I seriously think they put whatever numbers they think sound about right on that release.....really.
That is how far down into the rabbit hole our nation has gone......this is all going to end very suddenly.
Average Joe American is going to wake up one morning, flip on MSNBC and get that "deer in the headlights" look....mouth open......thinking, "WHAT THE F@%K" is going on?
I think the "Treasury Auction Results" are all fabricated. I seriously think they put whatever numbers they think sound about right on that release.....really.
That is how far down into the rabbit hole our nation has gone......this is all going to end very suddenly.
Average Joe American is going to wake up one morning, flip on MSNBC and get that "deer in the headlights" look....mouth open......thinking, "WHAT THE F@%K" is going on?