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Strong 30 Year Auction Sees Second Highest Ever Allotment To Foreign Central Banks
After one poor (the 3Y), and one stellar (the 10Y) auction earlier this week, today the Treasury concluded the weekly issuance with the sale of $16 billion in 30 Year paper. The auction priced moments ago at a high yield (95.55% allotted) of 3.07%, pricing 1 bps through the When Issued, and the highest since July when the market was again convinced a rate hike is imminent only to get the rug yanked from under its feet.
The internals were mixed with the Bid to Cover sliding from 2.460 to 2.409, which however was above the 12 TTM average of 2.356. Offsetting the slightly weaker BtC print was the jump in Indirects, which rose from 56.4% to 60.3% the second highest on record, as foreign central bankers have again decided that the safety of US paper offsets the duration risk of holding it in a rate hike environment.
Directs dipped modestly from 15.5% to 10.2%, below the TTM, while led to a small increase in the Dealer takedown which rose from 28.1% to 29.6%.
Overall, a strong auction as can be seen by the drop in yields across the curve after the auction, but mostly on the long-end.
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Foreign Central Banks...?
The 'BLICS' in other words, as uncle Jim Willie would say?
Now we need the DXY to drop by 10+ so the rainbow of doom can shine through the fog......
as usual, no mention that this auction was for $16 billion, instead of the usual $13 billion. so bid to cover can't be compared to those auctions, or at least un unbiased source would note this fact (if it was gold, perhaps)
Good point. And not only that,
"as foreign central bankers have again decided that the safety of US paper offsets the duration risk of holding it in a rate hike environment."
Would anyone at ZH write this and actually believe it? I could see Marc to Market, but a Tyler? Come on...
Getchur income producing properties before it's too late!
Don't forget kiddies, that deflation is the result of overly aggressive monetary policy when ensconced in a Liquidity Trap.
A Liquidity Trap is a Monetary Phenomenon caused by Non-Monetary Factors*.
... It's a bitch being caught out in something like a 10th standard deviation unit Lacuna (stasis) in a Leptokurtotic mini distribution way to the left of the long term mean ....
*Yesssiree Bob, easing some more is not gonna make it better
Even if there were a rate hike, it would not have to affect Treasuries at all. They can hike all the inter/intra banking rates they want and still push Treasuries higher. We don't have a market. We have mandated prices. Treasury prices are set by the Fed and co bid.
And everything is is order for them to stop "mandating" a higher USD. So be careful. The rug is going to get yanked here pretty soon. They are not going to let this economic carnage go unanswered.
the FED hates long term rates going down. risk assets can't have it.
Its just like with the Mortgage Backed Securities in 2008. There was no more real market but the banks which had lots of these toxic papers on their books were buying and selling daily back and forth to create the illusion that there is still a functioning market. Months before the crash "external" buyers had nearly completely disappeared. At this point of time there were only a handful of market participants selling these papers each other in a circle.
Imagine the "Foreign" Central Banks would not buy anymore Treasuries, then the real price of these papers would be "discovered". This can of course not happen because then the whole system would implode at once immediately. Not within days but within hours.
MBS were toxic papers but Treasuries are lethal papers in case their value is doubtful.
LOL, Yellen, Dudley, Evans, Bulltard and Williams print up another $10 trillon to buy debt.
Would love to see the Comex implode when someone call their Ponzi bluff of over-subscribing paper gold to physical.
And this is the musical chairs game of hot potato ponzi, we are made to live in.......fucking blow it up !!!
Ah, yes. Another feast for cannibals.
Not the ordinary kind; but a feast for ‘financial’ kinds of cannibals.
A government debt security evokes confidence as it is able to seize property of tax payers sometime in the future. For the last 50 or 60 years, at least, it hasn’t been able to collect such taxes. Instead, it has simply rolled-over its debt.
Its current outstanding debt represents a tax burden scheduled to be laid on following generations of taxpayers –young as well as unborn taxpayers.
It is not possible; such debt cannot be collected practically nor constitutionally.
For such debt to be collectible, it must be done before power passes from the benefiting generation of tax consumers; for, neither man, nor a society, will cannibalize itself.
Regarding the constitutional aspect, all taxes, to be constitutional, must benefit taxpayers and receive their consent – which is impossible when taxes are mandated for taxpayers unborn.
Of course, such fine points of reality or constitutional law are beyond the concerns of those now feasting on our children and grandchildren… for the next few dozen generations.