Failed Bond Auction Bug Goes Viral: Romania Rejects All Bids In 600 Million Lei Auction

Tyler Durden's picture

Earlier we predicted that the dirt in Eastern Europe is about to clog up Bernanke's liqduity swap Hoovermatic, but had no idea we would be proven quick so fast. Romanian website reports that in a 600 million lei auction conducted earlier, the "Public Finance Ministry has rejected all bids submitted considering them an unacceptable level of offer price." In other words, the Romanian government now thinks it is Greece and it doesn't need money it finds too expensive. In yet other words, this means a failed auction. This follows the news of a semi-failed auction in Hungary earlier today, and a busted auction in Germany two weeks ago. Does anyone know if there is an iPad app that magically makes direct bidders appear whenever and whereever needed, leading to a 10x Bid To Cover at 0.00% for any bond auction? If Jobs can come up with that, we would immediately bet the concrete bunker on AAPL stock.


The state rejected all bids submitted by banks to buy bonds on the three years in the auction which was intended to attract 600 million lei, considering too high yields required.

"Public Finance Ministry rejects all bids submitted considering them an unacceptable level of offer price, according to a release of the NBR, which acts as manager of primary market of government securities.

This is the second consecutive auction after the unrolled end of May, when Treasury fails to fall to deal with banks to bonds yield about three years.

Secondary market, bonds with maturity of three years is currently trading at yields of 7.5% -7.3%. The State last sold bonds on three years in April, at an average yield of 6.8% per year. Finance Analysts had expected to agree to pay a higher yield to make money.

h/t BlackSea

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Dr. Richard Head's picture

I wonder what was the average yield of bids that were rejected?

Assetman's picture

I don't know, Dick... but there has to be a vampire joke in here somewhere. ;)

Assetman's picture

"Twilight III - Return of the Failed Bond Auctions"

... it will either suck the life out of you... or be at least twice as worst as the sequel.


Zombie Investor's picture

Looks like it's hard for the Romanians to get Lei-d.

rrbluefin's picture

Coming to a Treasury auction near you!

MsCreant's picture

Default Bitchez!!!!! Show us how it's done.

Double down's picture

Ohhhh!! and gulp

Bam_Man's picture

Can't make this stuff up.

Now it's PIG SHIRT?


Bam_Man's picture


(pointing "you know where")

papaswamp's picture

Damn it man!...good one.

nonclaim's picture

How long until "The quick brown fox jumps over the lazy dog"?

Ragnar D's picture




Ottoman Empire

Plenty of Os can default.

papaswamp's picture

Didn't Brazil do the same yesterday?...not just a Euro contagen?

Mitchman's picture

It's getting harder and harder for Ben and Timmay to hold it together.

LeBalance's picture

When does Katla fire? /analogy sarcasm OFF/

papaswamp's picture

Timmay's (or is it Timmah?) head may blow before Katla

jesusfreakinco's picture

Hold the line... hold the line... Oh crap... Retreat, retreat, retreat...

StychoKiller's picture

"Once more dear Meanies, into the breech!  You're advancing the wrong way -- retreat, backwards!"

StychoKiller's picture

Yo guys, there's something wrong with your website software.

Zina's picture

Could someone make a survey of how much was offered in government securities in May alone, by all the governments of the world? In dollars, please ...

All the governments are issuing lots of securities. Who will buy all this crap?

Someone is gonna have to default...

Canucklehead's picture

Could your request wait until next week?  I'm kind of busy...

poorold's picture

"Does anyone know if there is an iPad app that magically makes direct bidders appear whenever and whereever needed, leading to a 10x Bid To Cover at 0.00% for any bond auction?"



too late, the Fed already has the patent on this device, although it is available for licensing.

jimijon's picture

Looking for partners in a gold based iPhone app!

I am a developer of such apps.

jkruffin's picture

Just like a said a few weeks ago, these European countries are automatically assuming a guaranteed bailout as are businesses. Just like Geithner keeps running his mouth about in his interviews.  Just yesterday Geithner talked about processes for future bailouts. When you say this stupid stuff out in the public, what do you think people are going to do?  We already know Geithner is a moron, along with Benny boy, but you have to be just a nincompoop to tell the world you are planning for bailouts.   Last I checked, didn't we pass a bill that said no more bailouts?  Its probably still sitting in the Congress as usual.


These Euro nations see one get bailed and then they say, okay its our turn.  Refuse to accept any auction bids at any price, and call the IMF(Bernanke) and Geithner and say, Where is our bailout money?   Geithner and Bernanke have opened pandora's box, and if Congress does close this door immediately,  there are going to be very very bad things happening in the future.  The very near future.  This Congress must reel in this FED and TRSY and start laying down the laws.  The CONSTITUTION.  They are breaking these laws at will, while our leaders sit back with their fingers in their asses.

dabullify's picture

FYI      One New Lei = $.29    USF


dabullify's picture

So auction was essentially $175 mill USF

Postal's picture

As someone else said, so much for a boring day today.

Tangent: You have a concrete bunker?

papaswamp's picture

Unfortunately I don't due to my proximity to sea level. I do plan on pirating a tri-hulled cat several scantily clad females and as much rum as possible and seek out an uninhabited island.

Miss Expectations's picture

Headed to the Gulf are ya?  Tar babies?

Postal's picture

Hmm... hot oil wrestling. XD

bugs_'s picture

Time for another episode of "Romanian Term Limits"?

AnAnonymous's picture

Wasnt a guy sleepless at night at the idea of a failed auction?  It was reported on this site.


I wonder if this guy sleeps better now because this is proving to be innocuous?

Paul Bogdanich's picture

You know you can do things like reject abusive bids when your leaders are not a bunch of prostitutes afraid of being exposed for what they truly are.  Slavs are tough.  That leader will go tell the people we couldn't borrow the money reasonably so here is what we have to do and the people will go along.  Not like here where every problem has to be hidden and covered up with PR and bogus statistics. 

zloty owadow's picture

...slavs are tough...


So are Romanians!


idle muesli's picture

Not good news, but (at this point) it may merely be that want to market their securities more widely.

What_Me_Worry's picture

Why pay 7% now when you can just pay 3% to the IMF later?

Defaulting is the new austerity.

ldotf's picture

both HUF and RON getting slammed against the dollar. RON still supported by Central Bank's interventions but not going to hold... 

ZackAttack's picture

Imagine! The utter audacity of anyone who would stand in the way of a nation's God-given right to roll over its debt in perpetuity at multi-decade low yields!

Plainly the work of a vast international cabal of speculators.

Money must not be allowed to find a price commensurate with its risk.

BlackSea's picture


I am BlackSea in the h/t at the end of the article. Some more clarification on Romania.

They will adopt a draconian program of 25% cuts in government worker pay and 15% in all pensions ( . This is done so they don't have to increase taxes on business for now. The IMF will continue to lend to them if they are under 6% in their deficit spending this year.

They know they're screwed, they just don't want to be PIIGS-screwed.

IMF was closing it's eyes and leting them get away with tricks like reducing the current definit by postponing payments to vendors from 30 days to 120 days. However, this March/April the IMF changed its tune and looks to save the center of Europe and sacrifice the periphery. That's why the huge austerity program is there.

Fun times...


ldotf's picture

I agree with your clarification. As a matter of fact, we speak the same language ;-)

BlackSea's picture

Glad to hear it. "O seara placuta"

acordeon's picture

o seara placuta la toti

placerea e de partea mea

garlic makes the world turn round

my 2c

ColonelCooper's picture

I'd like to see us take some of those "draconian" measures in the U.S..  I know they're a little over the top.  Hard to imagine cutting government to protect business.....