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Blistering Demand For 30 Year Paper; Lowest Yield Since May 2013; Directs Strongest Since 2011

Tyler Durden's picture




 

The only word to describe today's just concluded, and final for the week, auction of 30 Year paper can only be described with one word: blistering. First, the pricing yield itself, coming at 3.224% a whopping 2.5 bps through the When Issued, was the lowest since May 2013, just before the first Taper tantrum which sent yield surging only to regain all Ultra losses in the next year.

The Bid To Cover also jumped from last month's 2.40 to 2.60, and well above the 2.37% TTM average. Finally, the internals showed the highest Direct takedown, at 24.4% since October 2011, leaving some 45.9% of the auction to Indirects, and Dealers left with just 29.8%, the second lowest in history (only higher than June's 26.5%). In other words: while stocks continue to pound the table on imminent growth, bonds are seeing just the opposite. Unless, of course, both stocks and bonds are focusing on just one thing: far more easing from either the ECB, PBOC or, ultimately, the Fed once the whole "taper" thing is inevitably replaced by the untaper.

Needless to say, the response across the curve to this ultra strong, pardon the pun, auction has been swift and sharp, with buying across the long end, the 10Y yield dropping to LOD, and the 30 year also trading at session lows of 3.202%.

 

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Thu, 08/14/2014 - 13:19 | 5093023 NidStyles
NidStyles's picture

So who is actually buying this toilet paper?

Thu, 08/14/2014 - 13:22 | 5093041 NOTaREALmerican
NOTaREALmerican's picture

Or who isn't?

Thu, 08/14/2014 - 13:30 | 5093075 negative rates
negative rates's picture

Now's he's right, like a lawyer who represents himself, anyone who buys 10 or 30 year paper at these rates, has a fool as a client.

Thu, 08/14/2014 - 13:42 | 5093139 The Most Intere...
The Most Interesting Frog in the World's picture

Many a person has looked a fool at first, but turned out to be a genius in the end.

Thu, 08/14/2014 - 14:04 | 5093233 CHX
CHX's picture

All the best and good luck to you, and all.

Thu, 08/14/2014 - 14:12 | 5093269 The Most Intere...
The Most Interesting Frog in the World's picture

Keep buying gold w dollars and let me know in a few years how that works out for ya. My guess is as good as the last few years. The world has changed dramatically in just the last few months. A realization that the US dollar is not the only game in town any more has altered the Feds plans.

Thu, 08/14/2014 - 14:54 | 5093519 Handful of Dust
Handful of Dust's picture
'It's sad...pitiful': Howard Davidowitz weighs in on Walmart's latest disappointment

 

http://finance.yahoo.com/news/-it-s-sad---pitiful---howard-davidowitz-we...

 

It's a Broke Back Society now. Walmart just confirmed it.

Thu, 08/14/2014 - 15:51 | 5093848 NotGrokkingIt
NotGrokkingIt's picture

Would you care to expound on what you think those plans might be?  Do they reverse course and strengthen the dollar?  Does a stronger dollar mean more demand for T's meaning low rates?  Conversely since dollar is not the only game in town, doesn't that translate to the dollar is not in demand globally meaning higher yields and Treasury can't pay the bills?

Thu, 08/14/2014 - 13:25 | 5093052 Osmium
Osmium's picture

Well, we know it's not the FED, because they are tapering.  Wink, Wink

Thu, 08/14/2014 - 13:39 | 5093120 The Most Intere...
The Most Interesting Frog in the World's picture

I'll take a 30 year all day over AMZN, TSLA, etc.

Thu, 08/14/2014 - 21:50 | 5095448 Quaderratic Probing
Quaderratic Probing's picture

Germans who get 1% on their bonds

Thu, 08/14/2014 - 13:23 | 5093046 JailBank
JailBank's picture

So would this have anything to do with German Bunds getting butt hammered? Seriously anyone can answer that becuase I would like to know.

Thu, 08/14/2014 - 13:24 | 5093053 youngman
youngman's picture

A rush to safety...WHY????

Thu, 08/14/2014 - 14:28 | 5093348 The Most Intere...
The Most Interesting Frog in the World's picture

I feel like there are two markets. One where companies are buying their own shares back using leveraged Fed funny money. The other where everyone else is running for the hills.

Thu, 08/14/2014 - 13:36 | 5093096 q99x2
q99x2's picture

Did the Ebola virus go away? No news anymore.

Thu, 08/14/2014 - 13:37 | 5093105 NOTaREALmerican
NOTaREALmerican's picture

Yeah, old news.   None of the Kardashians were affected so "da people" lost interest. 

Thu, 08/14/2014 - 13:47 | 5093155 JustObserving
JustObserving's picture

What safety is there in 30 year debt of  a country with at least  $130 trillion in unfunded liabilities and debt of $17.65 trillion with debt and unfunded liabilities rising by at least $7.5 trillion a year?

And with inflation having being understated for decades, real US GDP is actually under $8 trillion if you correct for the lies.

On the other hand, stupidity is contagious on Wall Street.

 

Thu, 08/14/2014 - 13:52 | 5093172 JailBank
JailBank's picture

I will gladly pay you on Tuesday 30 years from now at 2% for a hamburger today.

Thu, 08/14/2014 - 13:59 | 5093205 The Most Intere...
The Most Interesting Frog in the World's picture

Who has a military that can crush anyone and anything in its path at the drop of a hat. Who can confiscate currency or any asset from the 1% if backed in to a corner far enough.

Thu, 08/14/2014 - 14:08 | 5093258 NOTaREALmerican
NOTaREALmerican's picture

Are we supposed to sing that to the "Shaft" theme music?

 

Isaac Hayes: Shaft (High Quality) - YouTube

 

 

Thu, 08/14/2014 - 14:14 | 5093280 The Most Intere...
The Most Interesting Frog in the World's picture

Shaft, he was a bad motha!

Thu, 08/14/2014 - 14:12 | 5093274 Bemused Observer
Bemused Observer's picture

I must just not have the 'Wall Street Mind', because I can't fathom the thinking that goes into buying 30 year paper at record-low interest rates, in a country that will most likely have a major currency crisis within that 30-year window...

That's probably why I'm not rich, but oh well.

Thu, 08/14/2014 - 14:27 | 5093325 The Most Intere...
The Most Interesting Frog in the World's picture

I would have agreed a few months ago but US created a monster called China who does not appear to want to stay in its place any longer. IMO BRICS serious threat to dollar denominated world forces Fed and US Govt in to new strategy which will strengthen the dollar. Not to mention huge wealth disparity caused by Fed actions that could get an honest politician hung, eventually.

Thu, 08/14/2014 - 14:27 | 5093336 sunkeye
sunkeye's picture

The feast continues in Janet in Wonderland - land.

Thu, 08/14/2014 - 15:09 | 5093588 Spitzer
Spitzer's picture

Wake me up when bonds fall on bad news

 

Thu, 08/14/2014 - 15:39 | 5093756 Sam Spade
Sam Spade's picture

ZH has been dropping hints for months that long-term treasurys were the place to be.  I'm guessing more than a few of the Tylers are holding 30Y paper, and to them I say:  well done.  The long bond is up over 16% year to date.  This is how you trade a depression.

Thu, 08/14/2014 - 16:13 | 5093956 Spitzer
Spitzer's picture

Until the blow off top. Just like the the last time rates were this low. In the 60's , rates were sub 2%. How did that end ?

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