10 Year Auction Prices At Record Low Yield, As Direct Bidders Plunge

Tyler Durden's picture

The only notable thing about today's $21 billion 9-year 11-month reopening was the yield which at 2.00% was the lowest ever. Granted less than half was allocated at the high but obviously the interest was there, even with Direct Bidders tumbling from a record 31.7% take down in the last auction, to a perfectly average 11% today. In their place came Indirect Bidders, who saw their take down rise from 35.4% to 48.9%. And while the Bid To Cover dropped from 3.22 to 3.1, it was still just in line with the LTM average, and is not at all indicative of weakness as some speculated, especially with the WI trading at 1.99, just before the pricing, indicating the auction was in line with expectations, if maybe a tad on the weak side. Following tomorrow's final auction of the week, in which the Treasury sells 30 Year bonds, which may or may not be very well bid depending on Op Twist expectations (although if Gross' record duration extension is any indication, the copycats will be there in full force), total US debt will be knocking on $14.8 trillion's door once this week's auctions are settled.

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GeneMarchbanks's picture

Incredible. Fear goes a long way...

Spitzer's picture

Climaxing buying ends all bull markets.

Deadpool's picture

true, but you're implying this is supply/demand driven. Far far from it. This is Fed/Treasury use, re-use, recycle. Can stay irrational longer then short can stay solvent. Ask Billy "Yoga master" Gross.

Ye Ye's picture

You are not kidding.  The Fed controls these prices, period.  The only thing that would cause yields to go up is excessive inflation.  Many on ZH feel we have that already, but there is not the political heat on it like in the late 70s.  Therefore the party continues.  Short treasuries at your own peril.

Deadpool's picture

Japan has inflation with low yields...only thing that can lead to higher yields in US is if China sells, but to whom you ask? Our debt; their problem.

Spitzer's picture

Not when they are hedging their dollar position with trade deficits with other countries. Like Germanya and Japan.

HpDeskjet's picture

Japan has deflation.... Chinese will not sell for the foreseeable future. Like most investors they dont have a choice but treasuries, no other market is this big and this safe (whatever "safe" means in these days).

topcallingtroll's picture

As I have always stated the mercantilists of the world have no choice but to line up, bend over, and take that big fat american cock again and again.

They protest loudly and pretend they dont like it, but they keep coming back!

Cdad's picture

I can feel it.  I can feel it.  Dave, stop.  Stop Dave.

HpDeskjet's picture

The bond bull market will be the last to blow up (if it ever does)... Good luck shorting it, people have been trying this in Japan for 20+ years

eurusdog's picture

What is the difference between direct and indirect?

GeneMarchbanks's picture

Direct buyers go directly to hell, the indirect buyers go by way of proxy.

eurusdog's picture

So direct would be speculators (Goldman, blackrock etc), and indirect would be central planners?

Mr Lennon Hendrix's picture

Direct bidders buy directly from the Treasurie.  Direct is the Fed.  Indirect buys indirectly, through the Fed.  They are China, et al.  Primary Dealers are Goldman, JPM, et al.

Lately, and this is more than you asked but while we are discussing these mechinisms we might as well discuss this, Primary Dealers flip the bonds back to the Direct source on the bonds dated date.

Here is your fiat ponzi.

eurusdog's picture

That answered my question 110%. Thanks!

MichaelG's picture

Direct/primary is massive assholes; indirect is giant fools.

topcallingtroll's picture

Indirect are all the nations allowed to bid direct, but since in public they scream loudly about how bad the system is and that they dont want anymore dollars or treasurys, they try to hide their addiction by buying indirect.

China, Russia, and a whole bunch of asian countries bid indirect to hide their purchases.

Racer's picture

Debt, and debt target, who cares... add a few extra trillion and that will do until next week so ChairSatan can keep the S&P from collapsing through key levels

Cdad's picture

VIX shanked for a second time.

GOLD...nervously looking over his shoulder.

30 year t bill front running mission...complete.

SAFETY IN NETFLIX!  Quick...everyone put on the same trade!!

GeneMarchbanks's picture


Stay away from the light you're much too needed around here.

Cdad's picture

Nice of you to say, Gene...but to which light do you refer?  Sunlight?  Deadlights?  Footlights?  Mirror ball light?  Green shade banker light?  Jesus light?  Spot light?  Flood lights...do you mean flood lights?


GeneMarchbanks's picture

The living death that is owning or trading NETFLIX. Do not click the "BUY" button whatever you do... the light is blinding...

Cdad's picture

Oh...goodness...I must have forgotten to add /sarc to that comment.  I surely hope no one thinks I would rush into Netflix...or anything else which requires constant Cramer pops to survive.

Then again, anyone who has ever read my comments should know that.  Yeeks...hate to think of myself as a criminal banker type, pimping that soon to be failed franchise.  I feel like I need a shower just thinking about it.  

So you meant green banker shade light then.  Understood...and not to worry...

vote_libertarian_party's picture


Chestire's picture

So repo with Fed is not the purpose - suggestions?

doomandbloom's picture

Anyone seen Leo? he never liked the word 'plunge'

monopoly's picture

I think Leo left us a while back. Have not seen a post for quite some time.

rgd's picture

Does anyone know if Eric Janzsen (iTullip) restructed his portfolio.  He was long gold and Treasuries, but hinted on getting out of one or both and putting it elsewhere.  Thanks

monopoly's picture

Shorting treasuries makes little sense when inmates are in charge. Been thinking about it since TBT was about 40 or so. Have not pulled the trigger yet. :)

Miners getting a little feisty now.

bgilliam83's picture

Im just an econ 101 student trying to get this straight.  When indirect bidding is most of the action does that mean were back to "snake eating it's own tail", mode?  Or man sucking his own penis?

Chestire's picture

TreasuryDirect spells:

Entities permitted to submit bids directly include, but are not limited to, primary dealers, other brokers and dealers (non-primary), various types of investment funds (for example, pension, hedge, mutual), insurance companies, depository institutions (banks), foreign and international entities (governmental and private),  the Federal Reserve (System Open Market Account), and individuals. 

So more indirect means more market given_

An "Indirect Bidder" is referred to on the auction results press release as customers placing competitive bids through a direct submitter, including Foreign and International Monetary Authorities placing bids through the Federal Reserve Bank of New York.


S'why there is probably no shortage in repo

topcallingtroll's picture

Naah..the indirects are all the nations that profess to hate us or think they are superior to us. They dont like to advertise their addiction to sucking the big fat american cock. So they line up at the glory hole to stay anonymous.

docj's picture

Meanwhile, Fraud Street levitates on virtually zero volume and, I guess, pure Hopium.

Off to Germany tomorrow. Should in interesting. London was a bore from an "end of the world as we know it, and I feel fine" standpoint.

monopoly's picture

Hey docj, get back to us. Really curious how the good Germans really feel about all the lies.

Correction in miners may be over. Weak holders out...Check, margin calls completed....Check, Consolidation completed.....Check. Possible next leg higher......Check, commodities, oil moving higher on Bernank fondling his beads.....Check.

All is well.....Maybe...Check.

RGLD just a sweetheart.

Mr Lennon Hendrix's picture

Have we passed the debt ceiling yet or what?

faustian bargain's picture

that's what i keep trying to find out. strangely enough, treasurydirect.com doesn't have an update more recent than september 9.

however, johngaltfla's blog says it was raised  by 500b to 15.1trillion. Dunno if that's hearsay, or if Congress did it.

faustian bargain's picture

ah, ok here it is...the plan that congress passed a month ago included an automatic raise on the 9th...apparently there was a bill on the floor to disapprove of that raise, which was defeated on the 8th. So, last friday the ceiling was raised 500 billion, to 15.1 trillion. Which apparently is 101% of US GDP.


Hephasteus's picture

When you reach a point where you delay the recognition of delayed debt. It's hard to keep up.

IQ 145's picture

"God help us all, Tiny Tim".

gball's picture

hmm...gold increases about $15 after the auction closes.  and s&p too about 6 points.


strange world.

Chestire's picture

Replacing Euro collateral?

IQ 145's picture

I used to put my eye right up to the glass of a big aquarium and try to imagine what everything looked like to the fish swimming around in there; "i thought, what  strange world it must be". Now, we know. It's strange alright.

firstdivision's picture

10Y yield has been on a tear today though.  Back into the 2% range, along with oil breaking $90.  Something big is brewing, or the market is just having a seizure.

PaperBugsBurn's picture

Hey, the zionist drug traffickers and joooden fetzen pushers are getting their butts kicked in the Middle East!!!


Die, zionist scum!!!!

theotheri's picture




ItsEvolutionBaby's picture

Hate speech is free speech.

Go fuck yourself. Move to Europe. 

Hephasteus's picture

You hate people who want to criticize you. So you are using hate speech with your banning and disgusting and calling tyler pathetic. And don't bother responding to this post. I'll simply shout you down for being anti-hephasteus.

IQ 145's picture

ANTI-SEMETIC ?  PATEHTIC ?  English is not your first language? You don't have a first language? As the Hawaiians say, "try think, you no go broke the head, bra".

topcallingtroll's picture

I live in a recourse state so I might as well refinance my house so I can pay less rent to the bank.

theotheri's picture

I don't hate anyone, especially you. I actually feel great sympathy for you because of your ignorance.


You may choose to hate me as a person (a person you don't know a thing about other than the fact that I am enormously wealthy) but hating me for being black/asian/jewish/italian/indian/russian/white/purple/blue/watermelon is racist and not cool.

You follow or should I slow down for you?

This site is not a democracy. This site is not an open forum. This site is the property of Tyler Hedgehog the gold pumping monkey.  And by permitting the hate speech listed above, yours included, Tyler Hedgehog is condoning anti-semitism, bigotry and racism.  That makes him a racist by extension according to me.