The last time we saw a 10 Year auction with comparable confusing internals, it was in July, when in a bond issue that smashed virtually all record, the sold 10 year paper in what we then dubbed a "WTF auction." Today's 10 Year $21 billion reopening, while maybe not quite as stunning in all categories, and coming at a yield of only the third highest in history or 1.65%, certainly had enough drama in the internals to qualify for the designation of WTF 2.0. It wasn't the Bid to Cover either that made it remarkable, which at 2.95 was higher than November, but well below the TTM. What truly set aside this reopening was that the Directs, continuing on yesterday's surge, took down a massive 42.7% of the auction: only the second highest since the July 45.4%. The flipside of course is that Indirects were left holding 24.2%, or the lowest Indirect take down since April 2009. Why did this dramatic inversion happen? Why the collapse in Indirect bidder interest (only $6.6 billion in bids tendered for an allocation of $5.1 billion)? It is unclear, for now.
$21 Billion 10 Year Reopening Closes At 3.754%, Indirect Bidder Take Down Scarce At 29%, Vs 43% For Last Eight AuctionsSubmitted by Tyler Durden on 01/13/2010 14:18 -0400
Yields 3.754% vs. Exp. 3.763%
Bid To Cover 3.00 vs. Avg. 2.86 (Prev. 2.62)
Indirects take down 29.0% vs. Avg. 43.05% (Prev. 34.76%)
Indirect Bid To Cover 1.89
Alloted at high 49.95%
Direct bid take down surges again to 17%from 8.9%
From GX Clarke
What exactly is an indirect bidder?
This question used to be fairly easy to answer. An indirect bidder was one that did not trade with Primary dealers and dealt directly with the Fed at auctions. That's the kind of quirky funny twist on language that would draw the ire of a George Carlin, "So an IN-direct bidder Bids