Another Record Direct Bid Award In Today's 3 Year Auction

Tyler Durden's picture

A month after December's 3 Year bond auction drew a record Direct bidder takedown, the Treasury has just auctioned off another batch of $32 billion in TSYs, which was almost a carbon copy of last month, with weak Indirect interest (28.4% Indirects), a stable Bid To Cover of 0.3623, increasing from last month's 0.3356%, a high yield of 3.85% (5.51% awarded at the high), just inside of the 0.386% When Issued, and another record Direct Bidder take down, rising to 26.4%, and just shy of surpassing the Indirects, as happened in December. The curious shift away from Indirects to Directs continues, even as Primary Dealers as usual pocket around half of the auction, to be used a near cash-equivalent collateral in various repo markets (and afterwards perhaps using the cash repo proceeds to sell IG9 indices?) Keep an eye on the Bid to Cover in future auctions as we may have hit a ceiling in this old-fashioned metric which has lately been moving sideways, and outright downward in some other TSY bond year.

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idea_hamster's picture

Are the direct and indirect portions of the chart swapped or am I mis-reading something?

Non Passaran's picture

Dark red, left-hand axis: Directs

youngman's picture

Its Japan........its always thing they will buy Rockefeller Center or something stupid like a Pebble Beach golf hey..the just bought a 1.5 million dollar they got sushi for ya

magpie's picture

wouldnt that only explain 10% of the interest

smlbizman's picture

i wonder what the shelf life is of that it acceptle, (i doubt) to eat thawed sushi...i would think they are more like all self respecting southeners who wont eat instant grits....

yogibear's picture

Bernake and the Federal Reserve buy more debt. Their the only game in town thorugh member banksters,

Magic printed money soaking up US debt. A game until others around the world challenge the US dollar as the world currency.


Bernanke and the Federal Reserve banksters will keep the debt out at member banks. A game of fiat, bluffing and perception.



buzzsaw99's picture

i think you may have missed a decimal place on the yield or a zero on the duration or something.

I Am Not a Copper Top's picture

Me confused.  Please correct.

lemonobrien's picture

how can the treasury sell bonds when deys over da debt limits?

Dr. Engali's picture

Hey Tyler are the bid to cover and high yield numbers out of place? Or is there a decimal out of place at the high yield and the bid to cover number completely off?

DrDinkus's picture

The bid to cover is a ratio, not an absolute yield.


Dr. Engali's picture

I know what the bid to cover is but if you look at the numbers they are all out of whack.  Here are the actual numbers from treasury direct..the bid to cover was 3.62%. High yield 0.385%.

yogibear's picture

Due to money printing and shifting of the fiat it's difficult to see where the real funds are coming from when the Federal Reserve can have one of it's member banksters buy. 

A shell game by these Princeton financial players at the Fed. 


q99x2's picture

They got my Spring semester college tuition in that one. Yeehoo.

Freddie's picture

Mint the coin!  Mint the Obama Platinum $1 Trillion Coin!  USSA!  USSA!  Kenya!  Zimbabwe!!  

lakecity55's picture

I think Marx should be on the Reverse, with a hammer and sickle.

Forward, Soviet!

Non Passaran's picture

Let's leave the design decision to Mr. Banzai, shall we?

AccreditedEYE's picture

Who the hell wants to sell IG9 when you can buy ES? Waaaay more bang from you quad-hypothicated/created-out-of-thin-air cash. Hell, short IG9 and THEN buy ES... it's only money. Just be sure to BTFD. Train is leaving the station right now... all aboard!

AynRandFan's picture

I'm a little fuzzy on this, but doesn't it mean we are seeing fewer and fewer foreign buyers, replaced by perhaps the Fed itself, and also a less competitive auction?

Kreditanstalt's picture

Let me get this straight: "indirect bidders" actually buy DIRECTLY, without going thru primary dealers, right?  They are allegedly usually foreign CBs.  If this segment is shrinking lately, does that indicate foreign CBs are buying less?  Maybe the world economy and trade are slowing.

But the last time this happened it was not good for the USD and beneficial to gold.

davinci7_gis's picture

At what point does the world look at the piece of paper called the dollar and realize that it is worthless compared to any commodity? 

hairball48's picture

I think the shrinking interest in USTreasuries by the foreign CBs(and other foreign investors) is just one more indication of the world preparing for the great fall of Humpty Dumpty--the US Dollar.

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