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Weak 2 Year Auction Prices At 0.745%, Bid To Cover At Lowest Since May 2010, Primary Dealers Buy Most Since July 2009

Tyler Durden's picture





 

Today's $35 billion 2 Year bond auction priced at 0.745%, on top of the WI. Yet despite the seeming lack of weakness, the internals were not pretty, with the Bid To Cover coming at 3.03, the lowest since the 2.93 at the May 2010 2 Year auction. This alone would indicate a material weakness in the bidside. What is also troubling, is that just like in the 10 Year auction from earlier this month, the Direct Bidders declined notably, coming at just 6.81%, compared to an average of 15% in the last year, and the lowest since November 2009. And while Indirects came in roughly as expected, Primary Dealers took down 61.85% of the auction: the highest amount since July 2009. The dynamic of bond bidding are certain changing as there is a big rotation going on behind the scenes. Alas, there continues to be insufficient information to determine just where the bidding interest is disappearing from. That said, we expect the "UK holdings" in February when they are released some time in May, to be flat or even decline.

 


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Tue, 02/22/2011 - 14:20 | Link to Comment RobotTrader
RobotTrader's picture

Clean breakout in bonds over the 21-day.

It's "Risk Off" for now.

Tue, 02/22/2011 - 14:24 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Hey Dow down nearly 200 points! Where the hell are the "buy the dip_ies?" Don't you realize Ben and Gadaffi will send you to Gitmo? 

If this goes on it'll be "Sell the Fucking Riff"! 

Tue, 02/22/2011 - 16:46 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

dont worry Ben has the fire power for an reversal of 400 points in the last 10 minutes here, I say DOW green by the time maria struts her fat ass across the closing bell.

 

www.silvergoldsilver.blogspot.com

Tue, 02/22/2011 - 14:27 | Link to Comment RobotTrader
RobotTrader's picture

VXX breaking out:

Tue, 02/22/2011 - 15:08 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

i see the old catfish mouth robo uber bull bear wannabe has found another indicator. odd. the catfish told us the other day that his tour de main crash indicator was the summation index. maybe he'll post us a humungous chart later on to keep us apprised.

btw: max keiser (still in business fyi - you said he was toast a while back - just thought i would remind you) and gentleman jim sinclair (the old scroomer as you call him) send their regards.

Tue, 02/22/2011 - 22:46 | Link to Comment RockyRacoon
RockyRacoon's picture

If his charts don't go the correct direction he just flips 'em 180 and posts them anyway.

Takes a real neck twister to read the text.

Tue, 02/22/2011 - 14:28 | Link to Comment topcallingtroll
topcallingtroll's picture

I think bonds will trade up from here temporarily. Fear tends to be supportive!

Tue, 02/22/2011 - 14:34 | Link to Comment koot
koot's picture

In a nation not so long ago bid to cover meant something, but how can it mean anything when the so called bids placed are done via QE currencies and those accepted were arranged well in advance of the "auction" day?  Of course someone will say, "Prove the auctions are rigged in advance", and to that I say ask what happens when the US Government wants to audit the Fed.

And then people wonder if the Dollar is a store of value or not.  I am a human being, not just a human.

Tue, 02/22/2011 - 14:33 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Can't monetize the debt forever. The rates are going up in the long term.

Which sovereign nation wants crap-o U.S. debt? It's obvious it's garbage.

U.S. - Broke

U.K. - Broke

Japan - Uber Broke

Tue, 02/22/2011 - 14:37 | Link to Comment surfwon
surfwon's picture

Santelli graded this issue at a C- .......... also has anyone noticed the flight to safety in teh us dollar.......not......... just another sign of things to come........ usd not even important anymore........thanks uncle ben

Tue, 02/22/2011 - 14:42 | Link to Comment slackrabbit
slackrabbit's picture

Magneto: We are future Charles, Not them! They no longer matter.

Tue, 02/22/2011 - 14:38 | Link to Comment youngman
youngman's picture

These statistics are fun to read..but they mean nothing now..if they had faces and names with them they might be worth something...but what is a PD today..or a Direct..no one knows...or an indirect for that matter...its such a game of hid the peanut....

Tue, 02/22/2011 - 14:39 | Link to Comment buzzsaw99
buzzsaw99's picture

0.745% sounds good to me.

Tue, 02/22/2011 - 14:51 | Link to Comment Robslob
Robslob's picture

Sounds like we are temporarily running out of fiat...

Start The Presses!

Tue, 02/22/2011 - 15:27 | Link to Comment SayTabserb
SayTabserb's picture

So 62% will be flipped in a couple of weeks.  We've got this routine down. Increasingly, the only people buying are the ones who have no intention of holding on to the stuff. They're more like the Fed's Purchasing Agents, working on commission.  Oh yeah, this can work indefinitely.

Tue, 02/22/2011 - 17:09 | Link to Comment John Law Lives
John Law Lives's picture

$4 per gallon for gasoline coming?

http://www.cnbc.com/id/41721766

The Ben Bernank says QE is working.  Well, it works if the purpose was to make Wall Street shysters and banksters and OPEC oil sheikhs even wealthier.

Good job, Ben.

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