30 Year Prices At 3.18%, Highest Yield Since April 2012

Tyler Durden's picture

Many were looking at today's $16 billion 30 Year bond auction to see if the same weakness that was exhibited by yesterday's tailing 10 Year would repeat. This did not happen, and in fact today's auction, concluding this week's offering of paper, was probably the tamest of the lot. With a When Issued trading at some 3.185% at 1 pm, the high yield of the auction came inside the WI, at 3.18% with 85.2% allotted at the high. The Bid To Cover also did not indicate any particular weakness, as the 2.74 B/C, just a fraction below January's 2.77, was well above the 12 month trailing average of 2.61. More importantly, unlike the Indirect weakness seen in this week's prior auctions, Indirects took down 36.4% of the offering: nothing to write home about, but also better than the 12 TTM of 34%. Directs were responsible for 14.5%, which left 51.2% for the dealer. Finally, while the pricing yield was the highest since the 3.23% seen in April of 2012, at this point what happens at the long end is largely meaningless, as the marginal buyer is virtually non-existent. Recall that as the Treasury itself said, "In Feb 2013, Fed Will Buy 75% Of New 30y Treasury Supply." And that is all that matters to quell concerns of any great rotation in or out of bonds.

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SheepDog-One's picture

Huh...I guess Pimpco is all-in!

camaro68ss's picture

QE 5 is coming bitchez! My guess is within the next 45 days.

(I'm not an invester, i only play one on ZH)

mind_imminst's picture

The FED will buy everything in order to manipulate the market. Bond vigilantes will not appear because they know they will get crushed. Yields will not go up very far before the FED makes more moves.

redpill's picture

But this isn't what Ben said would happen, how could he be wrong?

firstdivision's picture

The 30Y is following the same pattern as the 10Y. Buy now, sell in August and short, then close and buy next Feb.

CrashisOptimistic's picture

The 10 yr is down 2 bp on the news.


How could it not be?  The source of all money is buying 10 yr Treasuries.  They have announced they are.  Any seller can raise price quite some amount and that infinite money source will buy.

Prices of the 10 yr have to rise.  Yields will fall. 

Unless he's lying and isn't really buying, but someone would have seen this by now.

PUD's picture


Dr. Engali's picture


I gave you a detailed explenation a few days ago about debt/and debt subject to the limit. I won't go into that again unless you would like , however on Feb 4th they "temporarily" suspended the debt ceiling until May.



PUD's picture

So we are just rippin past it now? And what happens come May when we are way over it?  I still don't understand

TheSilverJournal's picture

There is no debt ceiling. The debt ceiling has been temporarily suspended, just like the Bretton Woods System was temporarily suspended by Nixon Aug 15, 1971.

Totentänzerlied's picture

There is no rule of law. The rule of law was temporarily suspended on ... oh fuck it, it never existed.

TheSilverJournal's picture

At least until 1913 there was no central bank to centrally plan the currency and no federal income tax to siphon the wealth of the nation through the central planners in the federal government. 1913 is the year that capitalism and free markets died.

eclectic syncretist's picture

 And I hope the Federal Reserve system crashes and burns on it's 100 year anniversary, so that their government conspired and wanton rape of everything good in our society can be ended........THIS YEAR!

walküre's picture

Ah shucks, just keep filing your tax returns and pay taxes. I don't understand why but they tell me I have to. Maybe it's as essential as having to breathe. I don't question them.

rahbii's picture

nobody wants the bentimmy trashpaper?

Hulk's picture

I was wondering who would be stupid enough to buy 30 yr treasuries, until that second to the last line.

The Fed is buying 75 percent of all 30 year treasuries in Feb. Can you say "end game" Bitchez !!!

youngman's picture

What would it be without the Fed involved...any guesses....I think one....they would not be able to sell that much...and two...interest rates would be at 12%...

max2205's picture

This is the rise and repeat portion of your programming.  Hope you enjoyed the wash portion

847328_3527's picture

Note to self:




Ben Shalome B.

CrashisOptimistic's picture

Of course.

If the source of all money tells you they MUST buy Treasuries, and you're a holder of Treasuries, why would you lower the price?  You would raise the price.

And yields would thus fall.

LongSoupLine's picture

This and all auctions are nothing but fucking huge "buy silver" ads.


Fuck you Bernanke.  Your fucking ponzi is on fumes you fucking asshole.

Village Smithy's picture

This is just manipulation for the purpose of convincing more PMs that the "Great Rotation" has indeed begun. Also to create lots of interest in inverse T-bill ETFs like TBT so they can have a nice stop run induced flash crash when yields drop suddenly next month.

Sach Mahoney's picture

The FED knows that there is no natural demand at these levels to support 30Y paper offering negative real returns vs real inflation, not the phony CPI.  A failed auction is simply not an option that the FED can allow happen.  It's one thing for the FED to take down and monetize new supply, but with a failed auction the FED would have to monetize secondary supply, too....and Uncle Ben cannot print fast enough to handle that scenario.  So, yes, an orderly auction is the best option thanks to the deep pockets of the American taxpayer and a corrupt FED.  

If the FED was truly out of the monetization business and allowed free market forces to price the market, rates would more likely be 300-400 basis points higher than where we are today...and heading higher from there.  

Beam Me Up Scotty's picture

"but with a failed auction the FED would have to monetize secondary supply, too....and Uncle Ben cannot print fast enough to handle that scenario"

Not sure why you think he can't print fast enough.  All he needs to do is press the "0" button one time and he just got 10x the money he just had to spend prior to the button press.  No actual printing is needed.  Hold the zero key down on your computer for 5 seconds and see how much money you get.  100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

Thats 5 seconds on the zero key.

Bobportlandor's picture

He could under Control Panel [Keeboard] adjust Repeat delay and Repeat rate for faster printing.

and better yet print 9s


Lord Of Finance's picture

No more Ron Pauls in office either to at least bring some attention to this problem. Rand is good, but he doesn't have his fathers balls.


  If Rand were to somehow to see some inflation in that area any time soon and thus take on the cartel, they would just do as they did to his great father and assassinate his character. Knowing full well the media 'groundlings' would pass on all those drive-by character shootings, from the likes of; Krugman, David Brookes, Frum, anyone on Bloomberg,etc, to the shit filled craniums of the mindless sheep.

goldenbuddha454's picture

3.18% and why its not as high as Greece's yield is beyond me, er wait the FED is buying 75% of them so there is actually someone that's still interested in our debt!

Shizzmoney's picture

I'm going to mail the Federal Reserve a bushel of Tulips on this Valentine's Day.

Maybe they can start printing those out, too.