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Another Semi-Failed German Bond Auction Passes Under The Radar
Earlier today Germany announced the "successful" placement of €3.195 billion in 30 Year bonds at a 3.33% Yield and a glowing 1.2 Bid To Cover.... Only if one were to take out the €805 million retained by the Bundesbank as so often happens these days, the auction was really undersubscribed. As the government sought to place €4 billion and received just €3.764 billion in total bids (of which €2.691 billion were in competitive bids and just €1.073 billion were non-competitive), there is no other way to classify the auction than a failure. And with the 'allotted at high' (or low price) coming in at 95%, there was certainly less than an enthusiastic reception for this latest auction which sported a coupon of 3.25%, the lowest coupon ever for a long-dated eurozone bond. More from Reuters here.
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buy, err rent USTs...
Shhhhh. Keep it down. Keep it down.
Smells like it is time for "T-Pain" globally...
So Merkel did not succeed in convincing the CIC/SAFE to buy german bonds during the recent trip? Or did BASF's criticism pissed off their chinese hosts so much they decided to buy spanish and greek papers instead; afterall these are all toilet papers sooner or later, and all can be thrown back to the ECB for 100%, why buy something yielding 3% when the Greek and Spanish papers are yielding higher?
hmm, €4 billion isn't a lot either... they are testing the water and it is cold for the 30yr.
Add in the weak Portuguese auction, and makes you wonder why anyone in their right mind would think there would be demand for the European stability fund, especially if the credit rating agencies have to actually vouch for their ratings. But I think we will soon find out...
Discouraging results for an auction of Portuguese 12-month Treasury bills had knocked the common currency lower in European trading. The bid-to-cover ratio, a gauge of demand for the T-bills, was 1.3, down sharply from 2.8 at the previous auction on April 7. The average yield was 2.452%, more than double the yield at the previous auction.
http://www.zawya.com/story.cfm/sidDN20100721009264 (link to above excerpt)
Turd Polishing with Excel Charts 304: wells Fargo earnings report is awesome. The alleged profit from fewer charge-offs. Excellent. Also the bar charts all beginning in 1Q09 are really fun too. "From this chart here you can see the improvement from the looking in the abyss period and just before the first QE epoch. Outstanding results really. Look at this money being parked in checking accounts over the same time period. Wonderful job by everyone. This will be used as our future leverage over the entire planet in the event anyone attempts to force to report greater writedowns."
They actually said that?
I'm lost, only a 1.2 bid to cover and a coupon of only 3.25%. Shouldn't the coupon be going up with such a low bid to cover??
i was thinking the same thing.
I think they are playing the game of get what we can get at that coupon untiil we can't get it anymore..
and in the meantime trying to cover up the failures.. much like the US by utilizing direct bids.
I guess it only takes one bidder with stupid money to do that.
With virtually every government selling bonds to raise capital, the snowball downhill is going to be really nasty.
30 yr debt sold w/ a 3 handle yield a failure? No. That the bundesbank participated like that sucks, grant you that.
they're fixing the yield/price of the long end of the curve
Just like our Fed does while claiming to not
can't let the free-market work now, can we?
4 billion euros? And they still couldn't fill it?
First post, love the site and all those who visit.
So we have another story showing the absurdity of our situation. What is the flash point that spells the end of the absurdity Tyler? When is the point of critical mass hit?
Welcome aboard. Absurdity is right word. My vote is for a large muni bankruptcy or insolvency. Could also be a run on a European bank.
The problem with the Germans is they are just too honest for their own good.
Bernanke needs to give them a call and explain how you set up a offshore hedge fund and how to execute swaps with the banks, so they can continue to buy at "the market price" without actually having any curve risk. Then things would go off like a charm everytime.
German paper Spiegel claims Germany is a shining success of Keynesianism, with unemployment rate now about to reach the lowest since 1991. So it cannot be that bad, can it?
http://www.spiegel.de/international/business/0,1518,707231,00.html
Ummm... Should the "Only if one were to take out the €805 billion retained..." be €805 million, with an "m"?
€4 billion - €3.195 billion = €805 million or €0.805 billion ?
Or are my math skills slipping?
Jubilee coming to a nation near you. That's right. Debt jubilee for nations....
Debt slavery for all the inhabitants.
Have you received your debt number yet?
-Debt slave 122541-012
sorry - double post
So how will this affect sovereign bonds outside the eurozone in places like Norway, Brazil and Australia? Are they more solid but ultimately snowballed too?
I've been watching TGBAX as a possible safe alternative with dividends, but seems like it rises and falls with the stock market...
DOW chart update :
http://stockmarket618.wordpress.com