Record High Directs, Record Low Indirects Round Out Today's 3 Year Treasury Auction

Tyler Durden's picture

While on the surface today's $32 billion 3 Year auction was uneventful, pricing at the ZIRP normal of 0.411% (31.53% allotted at the high), just inside the 0.415% When Issued, which means that few if any expect any major pick up in short-term rates above zero for the next three years at least, and at a 3.587 Bid To Cover, just shy of January's 3.623 and right on top of the last twelve auction average, it was the internals that the move was once again apparent, with Direct Bidders (red) once more rising their take down to some 26.9% - the highest on record, or at least going back to 2003, while Indirects ran away taking down just 18% of the auction, likewise a record low in the past decade of the 3 Year's history. The rest, as usual, belongs to the Primary Dealers, who will promptly transform said collateral, and what they don't see back to Bernanke, will be used as dry powder to expand the S&P multiple even more, and buy what ES they don't already own. Because, for now at least, in the immortal words of Chuck Prince, the music is still playing...

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SilverTree's picture

No risk of that.


Say What Again's picture

Since 11/16/12

We have...

S&P500 CAGR = 58%

RUT CAGR = 90%

I'm sure this is sustainable for many months  - if not years.

You can see ES get juiced as soon as the the auction is complete.  Its like these guys just got an injection amphetamines.

How do you spell bubble?

PUD's picture

Can someone explain to me how they can keep up this auction schedule when we are supposedly over the debt limit?  i don't get it.

Say What Again's picture


We have no schtinkin rules.

LawsofPhysics's picture

How is it possible that a bully can keep extracting lunch money when everyone is forced to pass through his playground in order to get to class (work)?

Same fucking reason.

FYI- there are no treasury "markets" and capital is most definately being mis-priced, mal-invested, and mis-allocated.

Dr. Engali's picture

They did it by tapping into the pension funds and such to pay the bills. You have your national debt and the debt subject to the limit. By tapping into the pension funds they had about 200 billion more to "play" with before actually going over the debt limit. In other words ..they are cooking the already cooked books.

Now thanks to the suspended debt ceiling they don't have to worry about that until May.

Squid Vicious's picture

Meanwhile, CCL pushes towards new 52 week highs as its passengers wallow in their own feces and vomit on a disabled ship in the Gulf... welcome to Dr. Shalom's Bizarro World!

Say What Again's picture

And the rescue plan is to take them into some shit hole town in Mexico.  I'm sure they feel REAL safe.

Doubleguns's picture

the music is still playing.....but it is getting fainter.

LawsofPhysics's picture

"Fix it in fifteen minutes" Ben!!  You lying motherfucking cunt.

larz's picture

They didnt even LOOK at my bid

Say What Again's picture

Yes they did.  Then they "improved" the bid by 0.0001

youngman's picture

Think of this deal...three years at 0% interest....and that is a good deal.....because they bought them....????  I am so confused

Melson Nandela's picture

if there was ever a day to sell to RUT or the /tf, today is the day. For all Time.

Clowns on Acid's picture

Tyler - It would be interesting to see what amount China's central bank bought, now that they are the equivalent of a Primary dealer.
Probably bought a modest sum, got to keep the relationship warm, rest of their trade surplus USD went to buy gold.