Treasury Auctions Off $32 Billion In 3 Year Debt, Indirect Interest Drops, Total Debt Now At $14.297 Trillion

Tyler Durden's picture

Today the Treasury auctioned off $32 billion in 3 Year paper at a 1.28% high yield. The Bid To Cover was 3.25 with Primary Dealers and Directs once again responsible for two thirds of the auction, taking down 57.4% and 8.9% respectively. This was the lowest Direct Bidder purchase since 2009. The Primary Dealer hit ratio was a surprisingly high 25.8%. Indirects declined once again to a disturbing 33.7%, the third lowest since January 2009, and just betterthan the all time low February 2011 take down of 27.6%. Otherwise the auction was solid, coming about 5 bps inside of the When Issued. Keep an eye on CUSIP QC7: it will be the most monetized 3 year paper by the Fed over the next 2 weeks (recall the new POMO schedule is announced in under one hour). What is more important is that this latest addition takes total US debt (not the debt actually subject to the limit) once again to above the threshold: adding today's $32 billion to Friday's total of $14.265 trillion brings us to $14.297 trillion. And there is another $34 billion in auctions over the next two days. We are getting very, very close to where even the debt subject to the ceiling, which is about $50 billion lower than total debt, will be one auction away from breach.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
plocequ1's picture

Whatever works. Go for it. Rally on. 

jus_lite_reading's picture

Geezus! What matters anymore? are TPTB really planning to crash everything and leave the earth? WTF?!?!

john39's picture

crash it yes.  leave the earth, no...  just take full control and eliminate the illusion of equality of mankind.

Mentaliusanything's picture

Rally on ? Fuck me its only $14. 297 TRILLION - tis but a scratch

(But I wouldn't mind 1%)

The amount is trivial until it is thought through

Then is give you instant dysentery.

Shat it out lads 


cindycheng's picture

It is such an important topic and ignored by so many, even professionals! I do enjoy writing but it just seems like the first 10 to 15 minutes are lost simply just trying to figure out how to begin. Dried Fruits and Nuts

jus_lite_reading's picture

WHOOPSY DAISY! Greek 10 year bond yields at 13%!!!!!!! No worries cause China will buy it up.....



Zina's picture

Com'on Republicans! Raise the debt ceiling above 100% of the GDP! What are you waiting for?

RobotTrader's picture

As usual, those Treasuries were lapped up like cotton candy.

Bill Gross was probably buying, afraid of the TLT train leaving the station.

earnulf's picture

Funny thing happened on the way to adding up the debt.   Since April 1 the government has added only 14 billion dollars to the debt, despite auctioning off a whole heck of a lot more in treasuries.    Is it possible that the government is moving things around to allow time to raise the limit? (Naw, accounting shenanigans aren't tolerated by our government!)

It really doesn't matter, since 1) the limit will eventually be raised as our spineless elected congressmen give themselves enough time to "tackle the deficit issue" and 2) Government Debt will exceed GDP by September 30 anyway.

I Am The Unknown Comic's picture

Tyler, thank you for this info.  These are issues I continue to track closely.

Does anybody else here but me wonder if perhaps a significant contributing factor to yesterday and today's selloff is that there was no POMO today and yet the 3 year was sold today to mostly PDs who needed cash to buy the garbage because there was no POMO today to provide them that cash?  Furthermore, the dollar had to be propped up like Uncle Bernie (Weekend at Bernie's) prior to the sale or else it would have been worse.  Therefore, Goldmans Sacks had to beat down oil (fastest way to raise the dollar) so that they wouldn't have to spend so damn much money buying 3 year UST (stands for United States' Trash).  Of course, PMs and commodities were hurt by this, but most show support levels as the people formerly known as those suckers buying 3 year treasuries are now known as those damned foreigners buying up commodities and PMs. 

Please....this is my working thesis and I really would welcome any feedback, positive or negative.  Thanks.   

SRV - ES339's picture

Well, they hit commodities, equities, and PMs... of course the auction's an 'A'... mission accomplished (with a few front running billions for the insiders as a bonus).

Time for a push to low double figures into the close... gotta paint the evening news report.

Is it true it's a bullet to the head for fraud in China?

Mr Lennon Hendrix's picture

PDs will just flip to the direct in a few days anyway

ivana's picture

Where can we see schedule of treasury auctions for 1-3y bonds? Please advise

I am sure that would coincide with bond yields drops (while generaly rising) and market crashes for next year...

hungrydweller's picture

Wow.  It is really sad when 32B in new debt barely qualfies as a rounding error to our total debt.

cindycheng's picture

I read your post and I found it amazing. Your thought process is wonderful. Regards,
moulin farine