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30 Year Auction A Dud

Tyler Durden's picture




 

Following much anticipation that today's 30 Year reopening would go off like gangbusters (explained why here), and with the When Issued ripping to 2.990% at 1 PM, the final result was essentially a dud, with the high yield pricing at 2.998%, leading to a rather substantial tail of 0.8 bps. The internals were rather poor as well, with the Bid to Cover coming in well below the 12 TTM average of 2.62 at 2.49, the Directs taking down 19.2%, Dealers left with their usual average of 49.3%, but with Indirects, which is precisely where the Japanese bid would have materialized, ending with just 31.4% of the take down, well below the 42% in March, below the TTM of 35.4% and the lowest since October's 26.5%. So what gives? And was the surge in the USDJPY ahead of the auction unwarranted? It would appear so.

But where are the Japanese FI outflows going then? Simple - it seems that at least one group of buyers has ignored Pimco and BlackRock's advice, and instead has allocated all their "rotating" cash into high yielding Italian and Spanish bonds to capitalize on the EURJPY carry trade. What can possibly go wrong? We will let Mr. Jon Corzine explain that to Mrs. Watanabe...

If indeed this is confirmed, expect the short USDJPY unwind to accelerate as more money is ploughed instead into that other carry pair: the EURJPY.

 

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Thu, 04/11/2013 - 13:14 | 3437142 A_Dog
A_Dog's picture

Just tell me where to get in. I don't want to learn anything.

Thu, 04/11/2013 - 13:26 | 3437201 Arius
Arius's picture

you are on the wrong place.  subscribe to goldman ... all set.  they will take care of any excess cash you have to invest.

Thu, 04/11/2013 - 13:48 | 3437287 Banksters
Banksters's picture

What the fuck is wrong with people?  Don't they know the govt is good for it.  Fuck the 100 trillion in unfunded liabilities here in the US.  Who cares that the new normal is debt monetization?  Japan gets it.  Tally ho mother fuckers.  PRINT BIG OR GO HOME.  

 

Where the fuck is rod serling? Iwant out of this episode.  

Thu, 04/11/2013 - 16:28 | 3438026 SheepDog-One
SheepDog-One's picture

They can't even sell their own bullshit to themselves now...wow this ride is about to go off the rails!

Thu, 04/11/2013 - 14:05 | 3437381 smlbizman
smlbizman's picture

a dog ..years ago i had a proposal to do alot of work at the minority part of this catering company that was owned by francis sawyers favorite people.....the guy, could be that guy in the hoveround in jim quins piece.....as i tried to explain what he was getting, he just kept stopping meand saying ..."what be da bottom line"...it was such a large number i kept trying to let him know what we were going to do...he kept interuppting ..."man, what b da bottom line"....so finally i just said 68,000.00...he said when can you start?....it wasnt his money, so it didnt matter what he was getting for it.....he just got it...

Thu, 04/11/2013 - 13:14 | 3437148 Mr. Fix
Mr. Fix's picture

So, can we panic yet?

Thu, 04/11/2013 - 13:26 | 3437202 Abraxas
Abraxas's picture

All panic activities are postponed until further notice. Please remain alert to cues.

Thu, 04/11/2013 - 13:14 | 3437150 LawsofPhysics
LawsofPhysics's picture

"What can possibly go wrong? We will let Mr. Jon Corzine explain that to Mrs. Watanabe..."  -  Indeed.  One thing is for sure, when it does "go wrong" I bet Mr. Corzine won't be holding dollars.

Thu, 04/11/2013 - 13:53 | 3437311 WhiteNight123129
WhiteNight123129's picture

Well Mrs Watanabe does not rely on a regional Fed which wants a pound of flesh against the NY gang and GS unlike MF Global and Corzine. Had the regional Fed funding not dried away maybe MF Global might still be in business who knows...

 

Thu, 04/11/2013 - 14:13 | 3437417 LawsofPhysics
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How in the fuck is 85 billion per month (that we know of) consistent the Fed funding is "drying up?" roll the motherfucking guillotines already.

Thu, 04/11/2013 - 14:36 | 3437522 WhiteNight123129
WhiteNight123129's picture

Ah Guillotines.... It has been a while since those have not been used.... The problem with Guillotines is that once they start, it is hard to stop them...

Thu, 04/11/2013 - 15:00 | 3437642 LawsofPhysics
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"Guillotines is that once they start, it is hard to stop them..."  - But you can, unlike starvation...

Thu, 04/11/2013 - 16:31 | 3438032 SheepDog-One
SheepDog-One's picture

The guillotines have lots of work ahead of them....don't worry about STOPPING them, just worry about being able to afford enough oil to keep them lubed up!

Thu, 04/11/2013 - 13:17 | 3437154 Political_Savage
Political_Savage's picture

That's not a substantial tail for a 30yr auction - those things are always all over the place.

I'm gonna say Tyler is walking back is "Japan Panic" post. Most desks don't think the mechanism is in place yet for the rapid flows... could take months and play out slowly.

Hey, I could be wrong. But who cares. Non-event today.

Thu, 04/11/2013 - 13:16 | 3437162 The Dancer
The Dancer's picture

Well, Goldman wants to sell the 10 year vs. Gross is buying the 10 yr....what is going to give here....can't both be right...

Thu, 04/11/2013 - 13:18 | 3437164 Blano
Blano's picture

I love that Bad Idea tshirt chick.  I'd go to jail for those.

Thu, 04/11/2013 - 13:26 | 3437195 RobD
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Damn I want your cookies, all I'm seeing a Lexus and DTZ ad  and a ad from a local Bank.

Thu, 04/11/2013 - 13:28 | 3437208 ParkAveFlasher
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Queer.

Thu, 04/11/2013 - 14:25 | 3437481 Go Tribe
Go Tribe's picture

Clear your cache. Ukranian and Russian singles available when you do.

Thu, 04/11/2013 - 13:17 | 3437167 Bingfa
Bingfa's picture

No Filibuster: Senate votes to move forward on gun bill.....

http://www.theblaze.com/stories/2013/04/11/no-filibuster-senate-votes-to...

Here's the Republicans that voted with the thugs.....

Lamar Alexander of Tennessee;
Kelly Ayotte of New Hampshire;
Richard Burr of North Carolina;
Saxby Chambliss of Georgia;
Tom Coburn of Oklahoma;
Susan Collins of Maine;
Bob Corker of Tennessee;
Jeff Flake of Arizona;
Lindsey Graham of South Carolina;
John Hoeven of North Dakota;
Johnny Isakson of Georgia;
Dean Heller of Nevada;
Mark Kirk of Illinois;
John McCain of Arizona;
Pat Toomey of Pennsylvania;
Roger Wicker of Mississippi.

Send this around....

Thu, 04/11/2013 - 13:19 | 3437171 ParkAveFlasher
ParkAveFlasher's picture

Muck FcCain

Thu, 04/11/2013 - 13:28 | 3437204 RobD
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Freaking Heller is getting squishy, getting the Reid disease.

Thu, 04/11/2013 - 14:15 | 3437438 Colonel Klink
Colonel Klink's picture

Looks like the usual list of turncoats.  Fuck'em one and all!

Thu, 04/11/2013 - 14:26 | 3437487 Go Tribe
Go Tribe's picture

They're driving up the price of ammo again.

Thu, 04/11/2013 - 13:17 | 3437168 ParkAveFlasher
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Gold and silver ascend like a stair at about 9:30am EST on their up days for 7-8 days now.  Someone tell me why.  I need to be told because I'm too lazy and ignorant, and lacking education, and of too poor a pedigree to get on an "early email" list.

Thu, 04/11/2013 - 13:22 | 3437187 eclectic syncretist
eclectic syncretist's picture

It's all Banksta prepping.

Thu, 04/11/2013 - 13:19 | 3437172 q99x2
q99x2's picture

Europe saved. Japan saved (twice - apparently fat boy hasn't nuked Fukushima yet) and stocks up.

Its nap-time.

Thu, 04/11/2013 - 13:25 | 3437199 Bearwagon
Bearwagon's picture

Nothing's saved at Fukushima.

Thu, 04/11/2013 - 13:40 | 3437251 WhiteNight123129
WhiteNight123129's picture

There is a voting system with the ECB. Japanese buying periphery bonds are just doing the Dalio trade. Short US treasuries long periphery Europe.

Soros talks about Germany losing out on competitiveness against Japan as Japan prints money.

He says that Germany could conceivably outvoted at the ECB at 6 min 10 ´ in the interview

http://www.bloomberg.com/video/billionaire-george-soros-says-euro-here-to-stay-jq06MCceQNe7wTQwXupFuA.html

 

 

Dalio mentions the vote at the EU and ECB is controlled by Southern Europe.

At 21 min 26´ second he mentions that Southern Europe has the vote. He says the Germans have the risk to exit.

http://www.youtube.com/watch?v=SFaRazMpxcM

Thu, 04/11/2013 - 14:10 | 3437408 WhiteNight123129
WhiteNight123129's picture

Just because the Fed is a dull buyer and you can front run it scott free does not mean that every other potential buyer is dull and you should try to front run it. Life has been too easy for the PIMCO of the world, but a bear market in Treasuries has started since last year.

Thu, 04/11/2013 - 14:18 | 3437447 LawsofPhysics
LawsofPhysics's picture

Keeping treasury prices, and more importantly yields, range-bound is the whole point of the Fed's direct monetization (printing).  Go ahead, stop printing and let's see how those auctions go.  

Thu, 04/11/2013 - 14:41 | 3437548 WhiteNight123129
WhiteNight123129's picture

The auction will not look good, but nominal GDP (not real) will get much higher when the rates climb. THat is the flip side  of "inflate away", on one hand the bond holders get fucked, on the other hand nominal tax revenues (not real just nominal ) get higher.

Inflate away = boost the entire price structure by bringing cargo gold from Incas. Bond holders get fucked but teh gov has higher nominal (not real) tax revenues.

Every holder of dollars and bonds get to finance the Keynesian ~miracle~ isn´t that nice? After reading Kenneth Rogoff it seems pretty clear what is in store to deleverage unless "this time is different". No hyperinflation but post world war II Britain inflation. Beautifullll deleveraging as Dalio said....

 

 

Thu, 04/11/2013 - 15:02 | 3437637 LawsofPhysics
LawsofPhysics's picture

Rates climb and the U.S. government will hard default, immediately.  The "flation" debate is bullshit as "prices" don't mean shit when essential items become scarce.  Please, this is not post WWII, there is not going to be an increase in the Joules of energy available to mankind (as there was post WWII) any time soon.

Thu, 04/11/2013 - 14:23 | 3437470 yogibear
yogibear's picture

Only the Fed is buying through it's banks. Who wants to hold this  junk debt?

When the Fed is having to deal with a currency crisis it should be fun.

Thu, 04/11/2013 - 14:58 | 3437629 rockraider3
rockraider3's picture

The obvious answer is that they are rotating into BitCoin!  Or not.

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