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$44 Billion 2 Year Auction Closes At 0.895% High Yield, 14.8% Allotted At High
- Yields 0.895% vs. Exp. 0.88-0.90
- Bid To Cover 3.33 vs. Avg. 3.21 (Prev. 3.13)
- Indirects 53.60% vs. Avg. 42.45% (Prev. 43.22%)
- Indirect hit ratio 65%
- Allotted at high 14.79%
- Direct take down: 8.2%
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hmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm
Japan is SUCH a good bitch, all into UST now while Mr. Toyota sweats in the US hearings.
FSLR is getting totally uber pwned today...wonder if Leo is buying the dip...
FSLR's foward guidance last week was not what Leo wanted to hear.
Of course the downgrades didn't help either...
I confess this is the first auction result I have read in this format, as a layman should I be concerned that over 100,000,000,000, (60%) of the tendered bills were not accepted?
IMHO idiots buying US debt paper will be fried once hyperinflation/currency devaluation kicks in at a very fast rate.
Got physical gold?
When in the hell did this board get taken over by idiots. It's a 2 year auction, dipshit.
Not really. The announcement shown is truncated, missing the footnote with a Bid-To-Cover of 3.33. That's about normal for a 2 year. The 12/10/09 4 Week that auctioned to 0% had a BTC over 5.
http://www.treasurydirect.gov/instit/annceresult/press/preanre/2010/R_20...
The auction was for $44B.
How long can this continue? Is it possible to play kick the can indefinitely? Will they ever allow an auction to fail? They never cease to amaze me. Makes Tony Soprano look like small time.
It is all about FIAT currency. Once the FAITH part runs out, then all bets are off and gold/silver plus other physical items of value will shine. Of course the EU and USA will devalue/inflation and then perhaps hyperinflation/huge currency devaluation.
Got physical gold?
Everybody is "all-in", in this global game of hide the sausage. Prisoner's dilemma underway.
This is not rocket science, people.
China threatened and executed, and Japan stepped up and supported an ally. Where the hell else do you expect them or the UK to put money at these magnitudes of quantity.
There Is No Alternative. The trade every single human being must have is going to lose money this year.
+1,000
Treasury Sells $44 Billion in 2-Year Notes At High Yield 0.895; Bid To Cover 3.33
Q. Could someone explain it?
A. High Yield .895 ? that means 2 years Bond will give 1.12% interest. (1/1.12) = .893 If I am looking 2 years bond numebrs the interest rate is getting smaller and smaller. Am I right?
2-Year 1.73 1.79 1.91 1.91 2.32
http://www.bloomberg.com/markets/rates/keyrates.html
Q. What is Bid to cover means?
A. Investopedia explains Bid-to-Cover Ratio
A ratio above 2.0 indicates a successful auction comprised of aggressive bids. A low ratio is an indication of a disappointing auction, marked by a wide bid-ask spread.
Q Since it is 3.33 that means more people are buying treasury and they are afriad of stock market going down?
No, High Yield is what the bond will pay: a coupon (interest rate) of 0.875%, plus a discount to face value of $99.96 per $100. It's called High Yield because it was the highest bid (interest rate demanded by the bidder) that the Treasury had to accept to move the bonds; every bond gets the same yield, regardless of original bid. If you want to research history of any T Bill/Note/Bond, go here:
http://www.treasurydirect.gov/RI/OFGateway
Bid-To-Cover is number of bids (in $ amount) divided by the amount of Bonds actually sold. The 2.0 ratio is just an opinion.
Stuart would be correct. However, as in all prisoners dilemma's, though initial collusion might work... Eventually, everyone cheats to save their necks.
Re: PIIGS, or maybe some municipality balance sheet adjustments, or maybe some pension funds that need a saving.
The great asian contagion devaluation would be a handy map for us to follow.
The great funnel to drive the cattle into the great funnel of treasury bills, notes and bonds will be globally televised.
Yes you should be concerned that 100 billion wasn't excepted because it means there is unreal demand for Treasuries. Ask yourself why that is, what is tells us about the economy and what the effect of it will be on the economy in the future.
Any of you read Rosenberg's stuff? He points out that Treasuries are under-owned by the general public and that group will continue to be buyers, especially in a deflationary environment.
Which would then kill the consumer economy and cause massive shortfalls in government revenue. Thereby also effectively removing creditor/export nations such as Japan and SK from bids. The consumer is already over-leveraged the only way they would be able to even buy treasuries at that point would be by borrowing the funds to do so from the under-capitalized zombie banks. That is the situation that the US economy is in today.
Oh, there's no concept that they'd ever allow an auction to fail. Fed would burn up the lines assuring BDs they'll absorb the supply.
Bond auction failure here would be an extinction-level event.
I read the news here everyday and the only thing I don't understand is the metrics of bond auctions. could someone please explain "direct take down " and "indirect hit ratio" also the importance of "alloted at high". Any help wouldbe appreciated because I can't find good explanations elsewhere on the web. Thanks in advance.
All good. Rally on.
High Yield is the highest rate Treasury had to agree to, in order to sell all the bonds; every successful bidder gets that rate. Alloted At High is the % of bids accepted that had that High Yield offered rate. Take downs are the % of bonds issued that went to each category, and are believed by some to indicate nefarious goings-on (hand of the Evil Fed) in order to hide a lack of real bidders YMMV.
I was the one who asked the question earlier. Thanks very much for taking the time to explain.
I think we've just seen the first 2 year rollover of many more to come. And believe me, since the bonds are still liquid, it's a safe move to buy them still.
10/30 years, well, that's another story....
i like it party on wayne. the over bearish got slapped today hard and the longs were rewarded handsomely :-)
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