10 Year Bond Prices At 2.076%, Highest Yield Since October

Tyler Durden's picture

In February, the US spent a third of a trillion to fund various government programs. Since only a fraction of this money was funded with tax revenues, the balance has to come from somewhere else. Like today's 10 year $21 billion Bond auction. In the aftermath of yesterday's weak 3 year, today's bond also priced at the highest yield since October, printing at 2.076%, just inside of the When Issued 2.08%, and a far cry from January's 1.90% as the Fed is expected to use the word inflation in just under 60 minutes. The Bid To Cover was 3.24, compared to the 3.12 TTM average. The breakdown of buyers was virtually unchanged from February's auction, and saw 42% taken down by Dealers, 38.6% go to Indirect Bidders, and Directs taking down 19.4%, or the highest since August. Once this week's auctions are concluded, total US debt will be $15.6 trillion as the ramp into October's (at the latest) debt ceiling fight, which promises to be the highlight of this election season, begins in earnest. Any minute now, the CBO will also release its revised grading of the President's budget, which will see the 2012 deficit forecast increase from $1.08 trillion to $1.2 trillion.

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chet's picture

Fletch:  "They said he had a deflation, an inflation... some kind of 'flation'."

Cognitive Dissonance's picture

As long as they can (make believe they can) sell the paper the Ponzi rolls on.

HarryM's picture

And it is R.O.L.L.I.N.G.......full speed ahead -  ALL Aboard!!!

mayhem_korner's picture



How much headroom does Timmay have left in Fed Employee pensions to stave off the debt ceiling fight?

TruthInSunshine's picture

Paging Dr. Ben Bernanke. Paging Dr. Ben Bernanke. You're needed in the IOUSA Debt/Deficit Monetization Emergency Room with your Buzz Lightyear Printer & QE jackhammer. Stat.


To infinity...and beyond!
battle axe's picture

Treasury Bubble? You bet there is, and it is going to pop huge.

SheepDog-One's picture

"inflation'? Bah, Bernank will bitchslap that down in under 15 nanoseconds. 

Who cares anyway? We only got about 10 more trading days till markets smash thru all-time bubble top highs! Bust out the Dom and cracked iced lobster.

DavidC's picture

I'm prepared to believe that is Bernanke's goal...


SheepDog-One's picture

And then you have to ask 'Ok, then what'? They can pump fairly easily, but they can never sell it. Its a runaway locomotive. 

Vince Clortho's picture

There is no incentive to sell when you can print money.  The "market" is a side issue, the only visible indicator to the state of the economy to the masses.  They will keep it moving ahead to keep people at home in front of their TVs.

SheepDog-One's picture

Ok, so they have all the bankrupt people watching TV supposedly, then what?

Vince Clortho's picture

That is the question.

So far, the only sign of life I have seen in the US is the OWS movement.

Dr. Engali's picture

I continue to be amazed that people will buy paper that will give them a negative yeild when you factor in inflation.

battle axe's picture

Flight to safety...Until the Bubble goes BOOM.

Al Huxley's picture

If you like that, wait until they start buying paper with negative nominal yield.  That's probably the gov'ts long-term plan - balance the budget with the profits earned by getting people to pay for the privilege of owning treasuries.

Dr. Engali's picture

They have already recommended that treasury start to implement that plan. Just think debt that pays itself off. I'd like some of that.

DavidC's picture

It didn't stop the European banks parking trash at the ECB for negative yields either...


GeneMarchbanks's picture

If by ''people'' you mean slush fund managers, China's geo-strategic 'buyers' and just plain old-fashioned imbeciles, that should take some amazement away.

Tsar Pointless's picture


Look at the S&P go bitchez! Above and beyond the pivotal 1381 threshold I've seen some prognosticators point to as *the* coming top.

There's about a 1,000% chance we'll see the S&P climb toward the 1500-mark in the next few months. I'm seeing 1444 as an easy-to-get target.

Hey - it is what it is. Brent oil is going to $144 at the very least before TSHTF and we all fall down.

Chairman Ben may or may not announce QEwhatever this afternoon, but the mere idea that he will do so...sometime...maybe next month...perhaps...will keep the bots in an equity-buying frenzy for the foreseeable future.

SheepDog-One's picture

In the coming months ahead? Nah at this pace, only a few more days till we bash thru previous all-time record insane market bubble tops. 

Al Huxley's picture

That's because you don't need copper to issue new debt - it's obsolete, like buggy whips.

youngman's picture

You know for all the people saying that China is going into a recession..or is in one...and they are the biggest buyer of copper....they increased their purchases over 7% last month......I think they have this commodities thing figured out....throw out a bunch of bad news..drop the prices..then buy the hell out of it.....and they have an army of geeks on computers that can trash a market ...

Vince Clortho's picture

TSHTF point ... where is it?

Housing Bust? nope

Middle Class Disappears? nope

US becoming a non-producing min wage country? nope

TBTF Bailouts? nope

Greek Default? nope

Runaway Printing? nope

edit: add a few more:

Constitution tossed in a ditch? nope

Habeas Corpus thrown out? nope

Freedom of Speech thrown out? nope 

So what is TSHTF trigger?

Tsar Pointless's picture

Winter. Of the nuclear kind, of course.

SheepDog-One's picture

I dont know, probably something no one saw coming no doubt....like an alien invasion.

eddiebe's picture

All of the above plus scarcity of gas and food.

mayhem_korner's picture



Today's Fed fun stat: the US gubmint's $223B deficit in Feb amounted to $88,600 of deficit spending per second.

aztec two step's picture

There is huge support for the 10 year at 2.08 and at 3.24 percent on the 10 year note. Violation of those levels will induce a fast and furious selll off

SheepDog-One's picture

Sell off? I dont think they can do it...who would the buyers be when the only present buyer now the FED has to sell? 

All Rise's picture

Is that chart in 3D?

eddiebe's picture

Oh wow, 2%, quick sell all your gold and buy bonds!!!

Al Huxley's picture

OK, so what everybody needs to do is just borrow money from the bank, and buy Apple stock on margin.  This is a win for everybody - banks are lending, profits from AAPL keep the general population insulated from the effects of $10/gallon gas, AAPL keeps going up because of all the buying pressure, what could possibly go wrong?

LawsofPhysics's picture

The question is, how much higher would the rate have to go before servicing the U.S. debt becomes unsustainable?

mayhem_korner's picture



That depend on your time horizon.  Even if the coupon rate was zero, and only the principle had to be repaid, the US would default eventually.  It's not like the debt number is getting smaller.

All the same, it'd certainly be a mushroom cloud to behold if yields went up 400 bp or so.  :D

Al Huxley's picture

It NEVER becomes unstustainable, because if rates ever do go up, they just print more money.  I've finally figured out how this fucking system works.

Mr Lennon Hendrix's picture

Inflation is tradition....or transitory...or something.

Yen Cross's picture

 "Oh, what a web we weave, when we practice to deceive!"

Roland99's picture

because I restarted my failed attempt (last time was back in, you guessed it, Oct 2011) to refi my mortgage.




Pool Shark's picture



"10 Year Bond Prices At 2.076%"

Update:  Make that 2.12%