Treasury Sells First Floating Rate Notes In Heavily Subscribed Auction

Tyler Durden's picture


Moments ago, the US Treasury sold its first $15 billion in 2 Year Floating Rate Notes, providing investors with yet another product that "protects" against inflation, following the 1997 introduction of TIPS, which courtesy of their linkage to the official BLS hedonically and seasonally-adjusted definition of "inflation" have mostly protected investors from any real gains. Here are the results.

  • High Discount Margin: 0.045%, compares to a yield of 0.38% on yesterday's 2 Year Fixed Rate Auction.
  • Bid To Cover: 5.67x, and while apples and oranges, this is notably higher than yesterday's Fixed 2 Year which priced at a 3.297 BTC.
  • Indirects took down 37.8%, compared to 28.5% for Fixed
  • Directs took down 8.9%, compared to 22.4% for Fixed
  • Dealers left with 53.2%, compared to 49.2% for Fixed.

And so the new product is off.

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Wed, 01/29/2014 - 12:47 | 4380126 Dr. Engali
Dr. Engali's picture

Floating rate notes to protect against inflation? But they keep telling us there is no inflation. No thanks I'll stick to gold.

Wed, 01/29/2014 - 12:48 | 4380141 StacksOnStacks
StacksOnStacks's picture

You might want to spell out the second "Bid to Cover", otherwise Fonestar is going to get a hard-on!

Wed, 01/29/2014 - 13:01 | 4380186 smlbizman
smlbizman's picture

i need to get into those gaurownfucinteed myracare bonds...fuck just the tip.... i want the whole thing...

Wed, 01/29/2014 - 14:20 | 4380542 SafelyGraze
SafelyGraze's picture

the floating rate instrument will do wonders for the nation's monetary -- and fiscal -- policy, going forward

what we have in mind, for example, is to create an agency within the treasury 

the agency will borrow from the fed at zero percent

then use that money to buy bonds that momentarily pay, say, 10,000 percent

which will allow the agency to be self-funding and to provide liquidity for the ongoing needs of the federal government's many important functions


ps .. many thanks to ken lay for his help with this innovative plan, and who has graciously agreed to manage the new agency


Wed, 01/29/2014 - 12:55 | 4380172 whatsinaname
whatsinaname's picture

Can we get these into MyRA's ?

Wed, 01/29/2014 - 12:59 | 4380190 Chief KnocAHoma
Chief KnocAHoma's picture

Tyler please get on this:

and this:

WTF? The bankers are offing themselves pretty quickly. Either the noose is tightening or they knew too much and got offed. 

Wed, 01/29/2014 - 13:18 | 4380227 LMAOLORI
Wed, 01/29/2014 - 13:15 | 4380262 LMAOLORI
LMAOLORI's picture

"Can we get these into MyRA's ?"

Yes question is then CAN YOU EVER GET OUT ONCE YOU DO!

Thu, 01/30/2014 - 07:41 | 4383481 Papasmurf
Wed, 01/29/2014 - 12:52 | 4380161 fuu
fuu's picture

"Bid To Cover: 5.67x, and while apples and oranges, this is notably higher than yesterday's Fixed 2 Year which priced at a 3.297 BTC"

They are pricing treasuries in bitcoins now?!?

So in 24 hours we have MyRA which sounds a lot like a 401K grab, and floating rate notes. Following Marla's playbook right down the line now.

Wed, 01/29/2014 - 13:03 | 4380205 CvlDobd
CvlDobd's picture

Days like today are the most fun days to be on ZH. Good times.

Wed, 01/29/2014 - 12:51 | 4380163 Kaiser Sousa
Kaiser Sousa's picture

wahat a fucking joke...

by any means necessary they gotta try to keep the ponzi alive...

nah, i'll stick with my Metlas.....thanks anyways assholes...


Wed, 01/29/2014 - 12:59 | 4380184 youngman
youngman's picture

I would say a floating rate note is close to the is the final protection for fiat..

Wed, 01/29/2014 - 13:00 | 4380189 buzzsaw99
buzzsaw99's picture


Wed, 01/29/2014 - 13:23 | 4380315 SmittyinLA
SmittyinLA's picture

its a sucker bet, anybody other than the state that thinks they can "game" inflation through govt securities is a sucker.

Wed, 01/29/2014 - 14:29 | 4380604 combatsnoopy
combatsnoopy's picture

Floaters.  The US Treasury is a floater.  Like a piece of shit. 
It's collateralized with the U.S. taxpayers' promise to pay. 

Isn't that funny?  Like how do we pay on that federal deficit when we have no private sector or purchasing power?  The dumbocrats didn't think of the obvious?  Were they snorting and "not inhaling", thumping bibles with racists or snorting and inhaling because it was the point?   They can't afford to kill anymore of their braincells either, the inebriation factor on Capitol Hill and K&J Streets is directly proportional to the size of our  economic woes. 

The lobbyists bribed our legislators for that "promise" on the vulnerable who can't afford to bribe a lawmaker on K&J Streets.

Since the US cashflow only comes from foreign loans to the U.S. Treasury, how is this financed without a private sector?
China knows!  They're the ones who barred their citizens from investing in the PRIVATIZED US financial sector while they bought up Treasuries to finance corruption in our government.

OPEC still loves us, once the value of our currency is forced to rise somehow, we will be broker than shit. 
Thanks boomer elected government for robbing us of purchasing power that the politicrats prolly inside trade currencies in the global market to protect themselves from.  Well if they're not, we can't afford any more bailouts or even that federal deficit we already have. 


Wed, 01/29/2014 - 14:50 | 4380708 Spungo
Spungo's picture

This is a brilliant scam they're running. Think about this for a second. Right now we're near the peak of the biggest asset bubble in history. What happens when it pops? Asset prices will collapse and the BLS will say the country is experiencing severe deflation (ie housing prices drop 50% in one year). With the floating rate tied to a fake deflation number, the floating rate bond might actually have a negative nominal yield. They're straight up going to steal your money if you buy these.

Wed, 01/29/2014 - 15:16 | 4380884 fuu
fuu's picture

On the same day the Fed says there is no infaltion...

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