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Shorts Burned Following Strong 5 Year Treasury Auction
If yesterday's strong 2 Year bond auction confirmed that there was not a hawkish cloud on the bond market's horizon, then today's just concluded 5 Year bond auction doubled down on the strength of the short-end, when moments ago the Treasury sold $35 billion in 5 year paper at a yield of 1.480%, stopping 0.3 bps through the 1.483% when issued. The Bid to Cover of 2.54 also posted a modest increase to last month's 2.49, if a below the TTM average of 2.71. The internals were also in line, with Directs getting 7.5%, Indirects a far stronger than average 60.1%, and Dealers left holding 32.4% of the auction.
And with the auction behind us, the question now whether the surge in the short interest ahead of both the 2 Year and 5 Year auction, as confirmed by the collapse of repo rates, with both the 2 Year and the 5 Year trading super special in the past few days...

... will once again book losses and admit that this, yet again, is not the inflection point, launching the latest short-end short covering rally?
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What is the significance of those negative rates?
And in other news, water is wet.
Everybody wants bonds until the second they go NO BID, tits up.
Anyone else remember 2008?
May be its like the Lotto slogan. You can't win if you don't play.
Miffed;-)
From Jackpot! to "Jack's pot" in a New York minute.
I thought 2008 was the opposite... Dark pools gtting a margin call and no "high quality" collateral to be found anywhere...
oh wait...
so this time the bonds will really go "no bid"...
John Corzine, is that you?
As far as I can tell the very same central bankers and financiers are alive and well you dumb fuck.
If you are short your losses can be infinity.
"And beyond" apparently...
Take that you pesky grandkids!
my shorts were shit stained anyway.
Shorting treasuries means that you believe the fed, which means you are an idiot.
Being early is being wrong, too.
Aside from the headline, I need to go back to Investment/Gambling school to understand this.
Why is Bond jargon, so much more complicated than stock?
If I told you, then I'd have to kill you -
/s/
Tens are 100-3+ (1.99%) just about where we closed last night. Market continues building a base.
Auctions form the cost basis out of which they trade. next move will be lower yields on the long end over next week or two, IMHO
NoVa
Negative real interest rates run the economy ahaha!
The latest Euro crisis is a powerful support for the Treasury.
Funny how those come along just as discussions of really ending QE, and/or of raising rates come along, isn't it?
So, who's buying? And with whose money?
The indirect soaked up what the PDs and direct didn't. Is it CHina still needing to play the paper game? Or Brussles? Or CHina through Brussels? Or Russia through London! WHo fucking knows but basically everyone is so desperate not to let the shit implode they have gone into overdrive.
Every single nation-state is now printing currency to buy bonds. Real rates are negative and inflation in food is high. Basically this is the boot on the middle class and it won't end until the middle classes of the world give up. This is why Greece is so important. The middle class just voted to oust the fiat money debt system. Too bad we found out economic hitmen are still around.
"Anonymous" is buying....
"Too bad we found out economic hitmen are still around." -- yes, but I know a few, in good shape, no worries, I am sure their flesh will taste good.
They say no one rings the bell at a top. Yet i think i hear something starting to chime.
Tinnitus.
lol........probably
one day the shorts will be right. they may be dead but they will be right
so?
yes, yes, John Corzine might want to comment on this...
Equity shorts burned again: in other news: a dropped apple accelerated at 9.8m/sec/sec.
Volkswagen. That short squeeze caused a billionaire to jump in front of a train.
What are these clowns posting as collateral?
Philadelphia?
Collateral? What's that...?
Fuck, money creation itself has been divorced from such things for 40+ fucking years!!!
"Collateral" LOL! Here, hold this bag for me...
Three and 7yr. repo rates still positive.
But I need one hundred...billion is it?...to tide my "Home Depot" over for...just a few weeks really.
Or is it my Sears? Or Target? Or Wal Mart? Or Lowes?
2,5 and 10 yr repo are negative. Bond traders are either dumb, or are playing to some poorly thought out scheme/rules.
Whe knew that there were so many masochists out there? Personally, I can come up with a very low negative number. That is where rates are headed...
Right: with negative retes, the Fed, through the banks, will pay the funds to lever up and buy stocks.
No stock market crash = no depression; everybody knows that! Digital breadlines are so abstract.
Yes, yes, as it turns out, the soviets really were ahead of their time...
German 5yr at -0.08.