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Treasury Issues $35 Billion In 2 Year Notes At 0.673%, At A Low Bid To Cover

Tyler Durden's picture




 

Today's very ironic $35 billion 2 Year Bond with a Cusip identifier QE3 (no joke, check it) just priced at a 0.673% high yield, slightly higher than last month's 0.669%. Yet the notable metric that caught everyone's attention was the Bid To Cover which came at a 3.06 compared to 3.41 previously and 3.2 average. Primary Dealers took down 49%, with 38% left for Indirects and 13% left for the Direct Bidders, a breakdown in line with expectation. What is important is that dealers expressed the lowest amount of bidding interest for this auction in 2 years: the $72.9 billion Primary Dealer bid was the lowest for a 2 Year auction since December 2008. This auction merely brings the total debt that much closer to the now largely irrelevant debt ceiling. And since there are another $64 billion in auctions over the next two days, it is about to get very tight in there. As a reminder, tomorrow's 5 year auction will close early at 11:30 am due to the Fed press conference.

Due to technical issues we will provide the chart associated with this auction later.

 

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Tue, 04/26/2011 - 13:17 | 1208230 Robslob
Robslob's picture

So QE 3 already in action?

Tue, 04/26/2011 - 13:54 | 1208380 Urban Redneck
Urban Redneck's picture

Plausible Deniability.

Tue, 04/26/2011 - 14:03 | 1208412 wang
wang's picture

Headline should read

 

Treasury Announces QE3

Tue, 04/26/2011 - 13:19 | 1208234 hambone
hambone's picture

Anybody venture to tell me what the fuck we are looking at today -

T's yield falling - equities to the moon

dollar weak - commodities weak

Huhhhhhhhh

Tue, 04/26/2011 - 13:23 | 1208247 DavidC
DavidC's picture

You and me both hambone - I guess Ford's results must prove everything is OK...

DavidC

Tue, 04/26/2011 - 13:38 | 1208305 hambone
hambone's picture

Treasury market chasing down to 3.31% yield like market is about to crash while stocks on 3yr highs and dollar breaking to new three year lows but nobody wants tbtfd for commodities...not sure if it's just me or if the market shares my confusion???

 

Tue, 04/26/2011 - 14:07 | 1208432 dogismyth
dogismyth's picture

Its a rigged market/casino!!  What else do you have to  know.  Even the news is under their control.  Virtually zero bad news today even with all the BS going on over in the ME, Fuku, levees under stress in the Midwest, protests in Iraq, Afghan and Pakistan over US occupation...blah blah blah.  Nothing matters anymore.  All is fair game baby.

Tue, 04/26/2011 - 15:25 | 1208730 ihedgemyhedges
ihedgemyhedges's picture

Oh people, pleeeez.  The Bernank's first news conference tomorrow!!!  HELLO!!!  Yields down = no inflation, commodities down = no inflation, stocks up = ebullient economy.

It's so simple......................Can't embarrass The Bernank, now can we????????

Tue, 04/26/2011 - 14:18 | 1208497 mayhem_korner
mayhem_korner's picture

Comex and Asian margin increases have pushed on-the-fence PM riders to the sidelines, and they're parking their money elsewhere in randomized, sheeple fashion.

The most important observation to me is that no matter the intervention, the dollar just can't hold its own these days.  And that's against a basket that includes the on-life-support euro and yen.

Today is one day.  Two days of aggressive bear raids and PMs have "crashed" back to mid last week.

Tue, 04/26/2011 - 13:18 | 1208238 plocequ1
plocequ1's picture

 Stocks are up. Thats all you need to know. 

Tue, 04/26/2011 - 14:16 | 1208484 hambone
hambone's picture

IYR to infinity and beyond!  3, 2, 1...get ready for a Robo chart update...

I think I'll buy DRV and it's cousins when they get to zero.

 

Tue, 04/26/2011 - 13:22 | 1208246 Strategery
Strategery's picture

Please verify the identifier QE3. If that is true, these guys are out of control and are willing to steal more value from our pockets. Enough is enough. It is time to repeal or significantly alter the Federal Reserve Act!

Tue, 04/26/2011 - 13:35 | 1208296 camaro68ss
camaro68ss's picture

um if this is true, time to buy more silver. I think im going to max out my Credit card on silver BITCHEZ!

Tue, 04/26/2011 - 13:29 | 1208268 hedgeless_horseman
hedgeless_horseman's picture

Any truth to the rumor that The Bernank's only props for his speech are a dollar and a lighter?

Tue, 04/26/2011 - 13:33 | 1208281 Threeggg
Threeggg's picture

Is this PDF frontrunning Benny on QE3 or a headfake, because you know everything that comes out of this guy's mouth tomorrow will be suspect ?

Well, not to the sheeple as it will be gospel.

Tue, 04/26/2011 - 13:31 | 1208291 plocequ1
plocequ1's picture

Looks real to me.

Tue, 04/26/2011 - 13:34 | 1208298 NotAllowed
NotAllowed's picture

Tyler heres my take:  Silver is down because of op-exs.  Trying to get people to not take delivery.  Also allowing people to buy in at a reduced price because QE3 is now assured.  Also scaring weak hands into selling so the TBTF can buy them out.  Thats why APMEX sent out that letter, they know silver is about to boom.  Also why China is dumping the treasuries, they know QE3 is about to happen, and will not stand for this anymore.  Just my opinion.

Tue, 04/26/2011 - 15:29 | 1208737 earlthepearl
Tue, 04/26/2011 - 13:37 | 1208306 AldoHux_IV
AldoHux_IV's picture

Just a hunch, but may see lower bid-to-covers from the dealers with the shorter dated issues because the long stuff is the potential target of the fed-- monetization has become more precise with the net effect of social class genocide.

Tue, 04/26/2011 - 13:41 | 1208334 slaughterer
slaughterer's picture

Agreed, who wants the short end, when the long end will be targeted in QE3-lite, to aid the mortgage market.

Tue, 04/26/2011 - 14:13 | 1208467 SheepDog-One
SheepDog-One's picture

'Mortgage market'...lol good one!

Tue, 04/26/2011 - 13:39 | 1208327 slaughterer
slaughterer's picture

Perfect market dynamics for a QE3 announcement headfake.  Even the CUSIP!  For all the traders playing the breakout on the inverse H&S on the ES (many CANSLIM momo monkeys, trading on their IBD cup and handle on the ES), all will not be well if Ben does not pull out a real, authentic QE3 out of the hat.  Perfect time to go short the ES, Russell 2000, Financials, and the bubble commodities--if you want to follow GS, and wager there will be no QE3.  Or are the shorts being set up for another in a long sequence of squeezes tomorrow?   

Tue, 04/26/2011 - 13:44 | 1208336 DonutBoy
DonutBoy's picture

Of what meaning is bid-to-cover when the Fed conducts secret funding operations?  They can put money in anyone's hands for any purpose.  There will be no auction failures.  In my view there's very little information in the metric.

Tue, 04/26/2011 - 13:47 | 1208349 Bazooka
Bazooka's picture

Can someone give a didactic summary of how these treasury auctions work?

What are the meanings of Primary dealers take down, bid to cover ratio, etc?

 

Thanks!

 

Tue, 04/26/2011 - 13:46 | 1208354 lolmao500
lolmao500's picture

So... since there's 64 billion in treasuries selling in the next two days... the debt ceiling will be within a few billions or what?

Tue, 04/26/2011 - 14:04 | 1208415 Smu the Wonderhorse
Smu the Wonderhorse's picture

CUSIP QE3!  Oh, that is simply too good to be true!  As Mark Steyn once put it to me, even an apocalypse needs a few laughs.

Tue, 04/26/2011 - 14:08 | 1208447 Sandy15
Sandy15's picture

Can someone call the number on the auction page to ask about the QE3 number?

Tue, 04/26/2011 - 14:23 | 1208508 Silver Bug
Silver Bug's picture

Of course the primary dealer bid was the lowest since 2008, who would buy this garbage unless forced? Especially since China just expressed interest in dumping 2/3rds of theirs on the weekend? Don't worry the Fed will just buy it up and monetize it.

 

http://silverliberationarmy.blogspot.com/

Tue, 04/26/2011 - 14:21 | 1208509 mayhem_korner
mayhem_korner's picture

Puts on eurodollar and a stack of physical PMs.  Pick yer poison, Benny, I've got you covered no matter what.

Joy.  :p

Tue, 04/26/2011 - 14:36 | 1208559 Bazooka
Bazooka's picture

Tyler, Cusip of QE3 to me is a hidden jab at you by Sacks and his NYU interns!

Tue, 04/26/2011 - 14:38 | 1208560 Bazooka
Bazooka's picture

Tyler, Cusip of QE3 to me is a hidden jab at ZH by Sacks and his NYU interns!

Tue, 04/26/2011 - 14:40 | 1208572 mayhem_korner
mayhem_korner's picture

Someone remind me what Greek bonds are yielding to attract investors?

Tue, 04/26/2011 - 14:43 | 1208584 lolmao500
lolmao500's picture

20-30%?

Tue, 04/26/2011 - 15:27 | 1208741 hambone
hambone's picture

infinity

Tue, 04/26/2011 - 15:27 | 1208729 earlthepearl
earlthepearl's picture

IF QE3 is announced does Silver jump?

Tue, 04/26/2011 - 16:21 | 1208958 lolmao500
lolmao500's picture

It jumps to the moon.

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