Very Weak 10 Year Auction; Absence Of Bill Gross Means Lowest Directs Since August 2012

While today's just concluded 10 Year reopening of the August D36 Cusip priced at the lowest yield since last June when the first Taper Tantrum really flared out, or 2.381%, the underlying data was far weaker than meets the high yield eye, as this was a tail of a 1.4 bps to the 2.367% When Issued, the biggest tail in months, confirmed by the sliding Bid To Cover, which at 2.52, was also the lowest since last summer, or August's 2.44 to be specific. The ugly internals concluded the trifecta of adverse data, as Dealers were left holding 49% of the take down, the highest allotment since May of 2013 when Dealers were left holding 49.2%. Which meant that Indirects dropped from 53.0% to 44.4%, just below the TTM.

But the most surprising data point was the plunge in Directs, which tumbled from 13.5% to only 6.6%, which was the lowest since August of 2012 when they ended up with 5.2%. Just how much of this lack of Direct interest is due to Bill Gross no longer being on the bid? And what happens to future auctions in a world without the Old "New Normal" Pimco?

It goes without saying that idiot stock algos took the weak 10 Y auction results as the most bullish thing since sliced bread and promptly ramped well into the green on the most confused day for equity "markets" in a long time.

Comments

[hedgeless_horseman]

Bill is very busy contemplating "tail" risk on some high-yield assets in Aspen.

I hope he makes certain she signs off on a Colorado indenture for the debenture, and not a California indenture, before he goes long.  If so, then buy and hold isn't as necessary as it is with other investments.

[Bell's 2 hearted]

Finally, ... i'm, uh, feeling some inflation ....

[Say What Again]

Who's buying, who's holding, and what exactly is she holding?

[gatorengineer]

The expense ratio on this asset is prohibitive.....

[NotApplicable]

Infinitely.

_{I ain't sayin' she's a gold digger...}

[aVileRat]

Your finest post in about a year HH.

Just be sure your statements about key indicators and her expectations are properly adjusted for your cash carry and she knows when you are going to hike your expectations for her output, and taper her cash for services accordingly.

After all its a flow, not a stock of Aspen girls issue.

[Bell's 2 hearted]

And what happens to future auctions in a world without the Old "New Normal" Pimco?

Better

remember Gross tried to "short" treasuries a few years back.

Dope

[papaswamp]

First they cling to it, then they flee like cats on a vacuum. https://m.youtube.com/watch?v=0veqc9Cy838

[Dr Strangemember]

I'm confused these days...  so what ever happened to worrying about Ukraine, Russian sanctions, the missing Malaysian jet, the bombed out Malaysian jet, ISIS in Australia's beheading threat, Argentina default, world-wide seperatist movements, the extremist takeover of Bagdad, muslims in OK beheading Christians,...

So hard to keep up with what's important anymore.

[NotApplicable]

The Singularity approaches.

I noticed recently that Top-40 songs only chart for a few weeks before the next sound-alike song replaces them. Biggest hit of the summer goes unheard by fall.

[Dr Strangemember]

And movies at the cineplex are only around for a few weeks before they're pulled for the next sucky flick.  Movies used to hang around for up to 6 months if they were any good back in the day.

[gatorengineer]

The 1:45 line shot was impressive.... what the fu was it?  Leaked minutes?

[yogibear]

The Federal will be in buying. Their always in with their infinite printed money buying up the slack. Maybe they'll pick a different country other than Belgium this time.