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$44 Billion 2 Year Auction Closes At 0.802%, 95.78% Allotted At High

Tyler Durden's picture
Submitted by Tyler Durden on 11/23/2009 13:09 -0500



  • Yields 0.802% vs. Exp. 0.786%
  • Bid-To-Cover 3.16 vs. Avg. 3.1 (Prev. 3.63)
  • Indirects 44.5% vs. Avg. 48.2% (Prev. 44.4%)
  • Indirect Bid-To-Cover 1.75
  • Alloted high 95.78%
  • Yield is lowest on record

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by Anonymous
on Mon, 11/23/2009 - 13:37
#139577

So that means 95.78% of all bids were filled at the high?

by Handle with care
on Mon, 11/23/2009 - 13:55
#139599

So my uneducated interpretation is that the bond market is sending its strongest signal in history that deflation is coming while the equity market is showing the strongest signal in history that inflation is coming.

Based on the bond market being much larger its usually the bond market that is correct. So equity longs are going to get raped at some point.

But both markets are so distorted by government actions that everything has lost its signalling ability and price discovery mechanisms are completely broken.

The Fed has destroyed free markets in order to save the free market system. Or a more cynical interpretation, the Fed has sacrificed the free market system to preserve the wealth of the oligarchs

by Tyler Durden
on Mon, 11/23/2009 - 14:01
#139605

quite eloquent

by Anonymous
on Mon, 11/23/2009 - 14:08
#139611

For my super-uneducated sake, can you explain how these auction results signal deflation?

by Anonymous
on Mon, 11/23/2009 - 14:09
#139614

Or, can someone explain treasury auction results more generally (or provide links)?

by Anonymous
on Mon, 11/23/2009 - 14:21
#139630

I believe it's called "throwing the baby out with the bath water"

by nonclaim
on Mon, 11/23/2009 - 14:57
#139682

Check the high P/E on the equity market: revenue and profits are stable at best while stock price soars (based on what?).

Then you realize inflation isn't coming, confirming the bond story.

by hack3434
on Mon, 11/23/2009 - 16:09
#139782

P/Es are high but so is the USD

by Anonymous
on Mon, 11/23/2009 - 15:42
#139742

Maybe the Fed just wants to make the appearance the bond market is betting on deflation.

by truont
on Mon, 11/23/2009 - 16:47
#139828

Well, the bond market is signalling long-term inflation, because if you look at the whole yield curve, it is climbing.  An inverted yield curve reveals expectations of a recession, historicaly, while a rising curve reflects higher inflation expectations.  The yield curve was inverted in July 2007, and people said, "Oh, I know an inverted yield curve often predicts a recession, but not this time!"  Well, we did get a recession the next year after all. And the yield curve is telling us that long term, there are inflation expectations, since investors are demanding higher interest on long-term debt, while demanding little interest on short term debt.

http://www.smartmoney.com/investing/bonds/the-living-yield-curve-7923/

by poydras
on Mon, 11/23/2009 - 14:41
#139655

"price discovery mechanisms are completely broken."

The mechanism is present. The forces are distorted.

by carbonmutant
on Mon, 11/23/2009 - 16:42
#139821

Ok, so the people we elected don't represent the consumer they represent banking oligarchs.

Isn't this how revolutions get started?

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