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Treasury Gives A 0.889% Yield For $35 Billion In 5 Year Paper

Tyler Durden's picture


Moments ago the Treasury closed its latest 5 Year bond auction in what was probably the most boring auction of 2013 to date, and perhaps of the last several months. The high yield was 0.889%, just inside of the 0.89 When Issued, with 32.39% allotted at the high, some 12 bps higher than December's 0.769 and the second month in a row of increasing yield. While hardly anything to write home about, this was the highest yield on 5 Year paper since march 2012. The Bid To Cover also rose, at 2.88, it was higher than last auction's 2.72, and right on top of the past 12 month average. The internals were boring too, with last month's record Direct take down of 30.4%, and correspondingly low Indirect 32.4% take down, inverting, with some 16.8% of the auction going to Directs, still the second highest ever, while Indirects ended up with 39.7%, and the remaining 43.5% handed to Dealers. In short- very uneventful, and just like yesterday, not even a trace that someone, anyone, may be losing their appetite for US paper.

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Tue, 01/29/2013 - 14:17 | 3195448 PUD
PUD's picture


Tue, 01/29/2013 - 14:21 | 3195472 Dr. Engali
Dr. Engali's picture

They are raiding the pension funds and anything else they can get their grubby little fingers on right now.

Tue, 01/29/2013 - 14:24 | 3195479 PUD
PUD's picture


Tue, 01/29/2013 - 14:26 | 3195495 Xibalba
Xibalba's picture

Bernie Madeoff knows

Tue, 01/29/2013 - 14:30 | 3195512 takeaction
takeaction's picture

Honestly....I was way wrong.  I thought this card house would of been long gone.  I thought the shit would of hit the fan long ago.  How many years are we going to be here on ZH reading about the "Big Bubble".  Is it always just around the corner?  How far down the road is that corner?  It may be a big corner...right?  20 years like Japan and still creeping along?  I am just venting and hate not knowing.  Where are we on the current time line?  How long can this BS be propped up?  There is no money.  I really don't understand.

Tue, 01/29/2013 - 16:09 | 3195975 Super Broccoli
Super Broccoli's picture

the "clear sign", the "trigger" or whatever we can call it is simple : the dollar losing it's reserve currency status. Until then Bernie can print and Obama can spend as much as they want without any serious consequence.

So when does king dollar goes ? Hum, hard to say and nobody knows excactly since it doesn't happen overnight but it already had started.

Tue, 01/29/2013 - 14:47 | 3195553 Dr. Engali
Dr. Engali's picture

It's all accounting tricks. By not paying into the retirement fund they are diverting those revenues towards the payment of bills. According to them there are two catagories of debt..that which is subject to the limit and then you have the national debt. By not paying into the retirement fund that gives them about 200 billion dollars to play with before the subject come up in March.



Tue, 01/29/2013 - 14:49 | 3195592 Xibalba
Xibalba's picture

because 'Public" money is more always important than "Private" money.  i.e The last act of a dying empire is always to LOOT THE PEOPLE

Tue, 01/29/2013 - 15:01 | 3195657 Biosci
Biosci's picture

If you raid the retirement fund to retire the $35B in old debt that came due this week, then you've just created $35B in space under the debt limit.

Tue, 01/29/2013 - 18:12 | 3196499 akarc
akarc's picture

It's a convertable. See next post.

Tue, 01/29/2013 - 14:20 | 3195451 SafelyGraze
SafelyGraze's picture

"Treasury Gives A 0.889% Yield "

that's a damn good yield.

and is why everybody is rotating into bonds

Tue, 01/29/2013 - 14:34 | 3195524 qqqqtrader
qqqqtrader's picture

You know what else is damn good?

... buying a roll of new nickels from the bank for $2 and drilling holes in them for washers, local store wants $0.27 each, these only cost me $0.05 each... that's about 81.5% discount!

Tue, 01/29/2013 - 14:41 | 3195557 SafelyGraze
SafelyGraze's picture

"drilling holes in them"

hear hear 

chinese cash (wikipedia)

Paper money equivalents known as flying cash sometimes showed pictures of coins strung together

Tue, 01/29/2013 - 17:10 | 3196223 francis_sawyer
francis_sawyer's picture



2 years now & you finally got with the program [on nickles]...



Tue, 01/29/2013 - 22:40 | 3197479 qqqqtrader
qqqqtrader's picture

francis_savvyer, I understood ya when you 1st started talking about it, just never had the chance to put to use until recently. I'm still not gonna collect a dumptruck load of nickels because they're worth 0.0524228 or whatever in smelt metal value. But another thing I've done with nickels is drill out the center, beat on the outer edge with a spoon until it resembles a ring, then carve out the center to fit... hmmm, a cheap wedding band for a nickel... LOL

Tue, 01/29/2013 - 15:01 | 3195652 BooMushroom
BooMushroom's picture

Just for us total morons in the crowd, let me see if I've got this straight:

People (banks) are paying $991.11 for a piece of paper that can be redeemed in 5 years for other pieces of paper worth $1000?

At 2% inflation, in 5 years, their $991.11 will buy $895.89 in goods and services, in constant dollars.

So in real terms, they are signing up to lose $104.11?

Can someone please help me out here??

Tue, 01/29/2013 - 15:23 | 3195761 eclectic syncretist
eclectic syncretist's picture

That is one perspective, the longer-term and uncorrupted perspective.

Another perspective is the government prints and sells I.O.U.s (backed by nothing but confidence in the taxpayers capacity to pay for them) to banks, who in turn sell them to the Federal Reserve for bigger numbers on their computers, that they then use to gamble with.  The purpose of the Fed is to make the overall counterfieting operation constitutional, while the banks take a nice skim for doing nothing but playing middle-man between the Gov and the Fed.

From this perspective, it is the Fed that is going to lose the $104.11 that you calculated, although since they will probably never be audited, and they can simply print more to make up the deficit, it doesn't really matter.

What matters is the banks have more cash to gamble with and the government can continue to dispense dollars in return for nothing but the hope of political favor.

Tue, 01/29/2013 - 15:21 | 3195764 de3de8
de3de8's picture

BIGGG money hedging.

Tue, 01/29/2013 - 16:12 | 3195985 Super Broccoli
Super Broccoli's picture

2% inflation ? where ? not in stock prices, nor food prices, nor gaz prices ...

Tue, 01/29/2013 - 16:19 | 3196013 BooMushroom
BooMushroom's picture

Only on the official documents.  Everyone knows it's higher in reality. Only strengthens my argument.

12% inflation over 5 years cuts your value almost in half (52%)

Tue, 01/29/2013 - 14:20 | 3195461 InvalidID
InvalidID's picture


 You expected there to be a collapse before the first quarter was over? It'll be the same ol same ol until AT LEAST the debt ceiling issue doens't get resolved. Or when welfare checks don't go out...


 Until then it's the new normal for as long as can be managed.

Tue, 01/29/2013 - 14:20 | 3195462 happel
happel's picture

Buy moar stox. 

Tue, 01/29/2013 - 14:25 | 3195487 youngman
youngman's picture

Every auction makes me want to puke....but they seem to be "successful" as they say...

Tue, 01/29/2013 - 14:30 | 3195501 francis_sawyer
francis_sawyer's picture

Bargain at any price... [if you request redemption in $1 FRN's & have a fireplace hearth the size of John Foster Kane's crib in Xanadu]...

Tue, 01/29/2013 - 14:30 | 3195504 VonManstein
VonManstein's picture

“not even a trace that someone, anyone, may be losing their appetite for US paper.”

What are you talking about? Ben buys the fucking lot that’s why.  And he doesn’t sell. He only buys.. jeeeez... the fake stock market is going up and you all need to find new reasons for it crashing.

It will crash at some point and its all fake we all know this!!

 But this remark.. “not even a trace that someone, anyone, may be losing their appetite for US paper.” Is misleading when Tyler’s know it’s all fucking Ben. He owns the TSY market and he does not sell.


Tue, 01/29/2013 - 15:03 | 3195659 Al Huxley
Al Huxley's picture

If in fact it's all fake, it doesn't need to crash, as the nominal index values are, as you say, fake.  But I agree that reality won't be denied forever, something, somewhere will adjust to compensate for DOW 100K - maybe $50/gallon gas.  Unless those MMT guys are right, and it turns out that the way to wealth, contrary to popular belief, isn't to work for it, but rather, to borrow 'money'.  In which case it's too bad for all those dumbasses of the past 6000 years who wasted all that time and energy building and inventing stuff, when they could have just been living the good life by printing up new money.

Tue, 01/29/2013 - 15:05 | 3195687 VonManstein
VonManstein's picture

Blimey. Nicely said.

Tue, 01/29/2013 - 14:29 | 3195505 Never One Roach
Never One Roach's picture

are these the "High Yield" bonds?

Tue, 01/29/2013 - 14:49 | 3195507 Kaiser Sousa
Kaiser Sousa's picture

i do not get this shit at all...u can not tell me that other country's could seriously be buying this worthless shit...other than punk ass Japan who could it possibly be????

somebody please!!!!

Tue, 01/29/2013 - 14:31 | 3195522 Lewshine
Lewshine's picture

I could careless about the bond market, just another financial vehicle in the hands of despots! What is truly amazing is the fact that Ben's mindless henchmen are hellbent to get the Dow back to 14200, the market's all time highs. It will and has run to that figure in a straight line. These fucking ivy league tards have lost all sense of reality - Can't even pursuade the masses with something slightly believeable!

Tue, 01/29/2013 - 15:19 | 3195751 chunga
chunga's picture

We just got a statement on an IRA from a part-time job a long time ago.

It's just under 4 thousand bucks and we actually had forgotten about it.

It "earned" a whopping 19 dollars in interest. The "service fee" was 25 dollars and the only "service" they performed was mailing the statement.

Tue, 01/29/2013 - 16:01 | 3195945 Super Broccoli
Super Broccoli's picture

who the fuck buys this ???? i mean beside uncle benny !!!

Tue, 01/29/2013 - 22:56 | 3197523 nastaking
nastaking's picture

Sony has a poor track record with timely Android updates to its  S750 Android , so we'll take this information with a grain of salt.

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