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Weak 5 Year Auction Prices At 1.41% High Yield, Lowest Bid To Cover In 6 Months As Foreign Investors Flee
With today's $35 billion 5 year auction pricing at 1.41%, we continue to see confirmation that the recent strength in the belly of the curve is quickly turning into pronounced weakness. The Bid To Cover was 2.65, the lowest since June or 2.58, but most notably those mysterious Directs came and took down a record 15.6% of the auction: the largest in history. Offsetting this was the complete collapse in Indirect interest, as foreign institutions took only 31.5% of the auction, the lowest Indirect take down since April 2009. The result was that Primary Dealers got stuck with saving the auction as usual, taking down more than half, or 52.9% to be precise, the highest since June. That foreign interest in the bond was so low is not surprising to us: as we highlighted yesterday, the Fed is now the largest holder of US Treasury debt. At this point the divergence will accelerate, as PDs and the Fed end up owning ever more of each and every auction (and subsequent monetization), while China et al is increasingly relegated to stand by status.
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Who will buy Spain's debt if they don't want to buy The Bernank Paper?
This is bullish for the USD!
'Bullish for the USD' as least crappy fiat currency around (in this present moment) and exactly opposite of 'The Bernank's' plan of equity run up for imaginary 'wealth effect'.
No matter where you look, its all a pile of BS.
I just don't think it's fair that the PDs and the Fed get to keep all the good stuff. I mean, they don't need to horde all that triple A high quality paper. Come on Ben, spread the wealth and let some of the peons in on the pig roast.
Can't you spare a few squares? I don't need much, just three squares.
http://www.youtube.com/watch?v=Gysu0kgFwT0
Need for more Benron Bucks - cachunk, cachunk - now!
enjoying watching the boyz trying to control gold. not a good expirations week for them...
awwwwwwwwwwwwwwwwwww
enjoying watching the boyz trying to control gold. not a good expirations week for them...
awwwwwwwwwwwwwwwwwww
Yeah,butt ya ain't gettin' any see....
http://4.bp.blogspot.com/_eGZF7-BSejg/TNOGeQqV1MI/AAAAAAAAAwQ/q1gyuB8uU_...
Certainly not much wealth effect goin on in equities, wasnt that 'The Bernank's' plan? Rising markets and weaking dollar? Last thing in the world he wanted was a rising dollar. But these days all bets are off hourly as paradigms shift that fast.
Ben Bernanke and his Fed are fighting for our freedom!
He'll have to buy ever more arms full of USTs. This hasn't quite grabbed the market's attention yet, but it will.
We now have a perfect currency storm in the making: As the Euro drops to oblivion, more dollars will need to be printed to 'rescue' the banks that melt down in the wake. Yuan is pegged for good reason. And the rest of the planet will suffer with exported inflation.
On days like today it makes sense for gold to charge
perhaps he had some heads up a couple months ago that the TICs were going to be leaving for bloodier carcasses
Bond weakness and dollar strength is a paradox of magnificent proportions.
Its all suddenly going opposite to plan- dollar strength, bond weakness, stock weakness....like the Q/E2 hit an iceberg 5 minutes from the pier.
That makes for a classic picture; da Bernank still holding the broken bottle and the ship is already sinking!
CNBS cheerleaders love to see a dollar recovery like today. They show you a 2 hour chart.
The dollar's Plaza accord high of September, 1985 is more than cut in half (164.72) !
The downtrend was interrupted by the dot.com high in 2000 but resumed unrelentingly and breached the 1992 lows in 2008, which is now acting as resistance.
The trend is down.
Yea really, the dollar is SOOOO strong, on a 2 hour chart... give me a break.
ES
http://99ercharts.blogspot.com/2010/11/es_5887.html
http://www.zerohedge.com/forum/99er-charts
Oh right, POMO earlier today, and now a treasury auction. I suppose if it was the other way around, it would be too obvious.
10Y
http://99ercharts.blogspot.com/2010/11/10y_23.html
http://www.zerohedge.com/forum/99er-charts