30 Year Bond Prices At Record Low Yield As China Flees, Direct Purchases Soar

Tyler Durden's picture

The "benefit" of Operation Twist for the long end shone through today as the Treasury priced $13 billion in a 30 Year reopening, which came at a record low yield of 3.12%: this was 4 basis points inside the When Issued of 3.16% so at first sight the auction was a stunning success, confirmed by the second highest Bid To Cover in the auction history of 2.94. Perhaps... The only problem is when one looks at the internals, where just like yesterday, the most prominent observation was the total collapse in the Indirect Bid, which accounted for just $3.7 billion of the take down or 28.7% of the total, less than the Direct portion which despite having plunged in all other recent bond auctions soared to a virtual record 29.5% of the total auction (less than just the 29.6% from March 2010). And now the question again arises: are the Directs merely London-based offshore entities doing China's bidding away from the Indirect bidder spotlight, or, is this some other operation that kicks in every time when a plunge in Indirects is expected, such as over the past two days with China seemingly doing all it can do show it is telegraphing a plunge in interest for US paper. We will know more today when at 4:30 pm the Fed discloses its most recent custodial Treasury holdings for the past week. In the meantime, the Primary Dealers and the Directs have the long-end firmly under control.

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narapoiddyslexia's picture

This is bullish for stocks. Go long.

NewThor's picture

Can anyone even imagine what the economy, country or world will look like in 30 years?


i root for that fat jersey governor's picture

i agree. This counter trend rally has some legs in it. The down turn might resume much later than many people thought.

broke433's picture

Downturn will come a few days after Applle reports earnings and when the Europeon fukups finally admit they were lying to everyone at the EU summit. Apple always goes up 5 days before earnings and drags the entire market up and after reporting their record profits, people will start to take profits and that's when the market panics again which will bring headlines about Europe.

sun tzu's picture

Everyone thought there would be a systemic crash in 2009 and it didn't happen. The truth is nobody knows when it will happen. We just know it will happen at some point.

wombats's picture

Will this impact PrimeX?

Will 30-year Mortgage rates be going lower?

redpill's picture

They should call it Operation Tryst since it's a not-so-secret banker party.  And if you have to ask, you're not invited!

AldoHux_IV's picture

They should really call it Operation Ouroboros afterall it's all alchemy in the end: turning worthless paper into the greatest transfer of wealth scheme.

Incubus's picture

not even paper beyond signing documents:  all they're doing is creating new "wealth" contained in electronic systems. 


Wipe out the computer systems of the world, and were does all of this "burdening debt" go?  It never existed anywhere besides our pretend binary computer systems.  1s and 0s. The advent of the internet has only sped up the process that would've taken much longer with the traditional method of moving around paper money with no objective value.  Banking/monetary systems are always designed to transfer wealth from the users of the system to the moderators of the system.


Sheep.  Fleece.



ZeroPower's picture

Nice auction that went out under expected yield

Mr Lennon Hendrix's picture

I imagine the phone call this morning.....................

Hey Ben, can you buy all the long end?  China is a little ticked about Congress "Having their cake".


Don't mind if I do Timmah!  Blippity blop, wonk wonk.


Great thanks!  Don't know what we would do without your sorry ass, Ben.


Blippity blippity!  Rational consumer!  Spend now.  Blippity, ZIRP slurp slurp!

wombats's picture

Just curious.  What kind of moron wants to lock up their $ for 30 years at a measly 3.16%?

SeverinSlade's picture

Everyone on CNBS and all of the idiots that actually take what CNBS says seriously.  Nothing is safer than buying US toilet paper and equities as these "dirt cheap" levels.

halflink123's picture

Anyone know how a small retail investor can short Treasuries? I haven't been able to find a good solution.  I dont like any of the short ETFs.

viahj's picture

they aren't.  they are flipping them back to the Fed, with margin.

SeverinSlade's picture

The US is setting the stage for WWIII all while telling China to fuck off despite needing their continued purchasing of US paper...This will not end well.

sabra1's picture

this is why the markets have shot up, giving insiders time to get out, have the HFT's give the illusion of all is well! war with iran  to commence within two weeks according to sources!


LawsofPhysics's picture

But war is bullish, especially when the money to fund it is free.


LawsofPhysics's picture

Don't kid yourself the elite in China and the U.S. are on the same page with this one.  Both parties benefit from a major war and low treasury yeilds.  

DosZap's picture


The US is setting the stage for WWIII all while telling China to fuck off despite needing their continued purchasing of US paper...This will not end well.

Bingo, just look at EVERY (police Action) War we have gotten into.

Lybia for example, Obummer said it would be over in days,turned into weeks, now pushing 9 months.

Plus, we oust Mommar, and he was not good, buit we are getting something FAR worse in his place.

ONE more Radical Islamic Shariah state.10x's worse than what they had.

SeverinSlade's picture

Just like Orwell predicted...

We are now getting involved in so many wars that soon, the general public will have no idea who we are fighting on a day to day basis.

Today Iran is the enemy, tomorrow Yemen, the next day Pakistan, eventually Saudi Arabia...

Uncle Sam's picture

There won't be a WWIII. If our government tries another fake attack (false flag), the youth of this country, along with everyone that remembers Vietnam and everything after, will refuse to serve. Our government has used up any shred of truth telling ability.

What's unfortunate is that even if we are attacked, who is willing to support the government we have? Many people may think the attacker may be the better of the deal.

And who the hell wants to attack us? Massive nuclear radiation across our agricultural producing regions. Massive poverty among the most violent of our society, who are extemely well armed. An upper wealthy class that would sell us out in a heartbeat, if offered the chance to help colonize us.

Any time anyone, anywhere mentions war, it'll be civil war. Think the bloodletting of the French Revolution, not the grand battles of good vs. evil of the American Revolution.

Hope unlimited printing of fiat works.

SeverinSlade's picture

I think you're far too optimistic...

Individuals are smart but people are stupid.

If another false flag is carried out, the sheeple will rally around Obumma and the government.  It could prove to be key in defeating Ron Paul in 2012...I mean, think about it.

If we go to war with Iran (or support an Israeli war against them by providing air support) how will that make Ron Paul look to the sheeple?  I can already see it...Obumma, Romney, etc. slamming RP by saying, "And you WANT Iran to have nukes?"

A lot of people are waking up, but make no mistake, we are still in the minority. 

DosZap's picture


It could prove to be key in defeating Ron Paul in 2012

As much as I want the same, forget that.

NEVER happen GI.

We have a Geo H W Bush election cycle now in the making,

Enter the New  Second coming of  Ross Perot.(Herman(Fed Reserve) Cain, the votes will be split to the point that Romney, and Cain, will have THROWN the re-election directly at the feet of  the Lizard King.

Hide and watch.

Ron Paul, has ZERO chance of being elected, none.

DosZap's picture

Uncle Sam

If Obama gets his way, and like minded individuals like Jesse Jackson Jaggoff Jr,( stating that Obama should just basi9caly take over and  do their thing, stop the Congressional elections in 2012.

 Obama has shown his cards already, saying he wants,would like to, and has thought about doing things HE WANTS to do, w/out Congressional approval.

I do not see this happening unless a MAJOR National Emg happens, and he LEGALLY can make that call.

RobotTrader's picture



The Fed can buy unlimited quantities and the Fed balance sheet continues to get Hockey Sticked into Outer Space.

Wow, this has to be the greatest financial feat in world history.  $15 trillion in debt and climbing and 30-year yields plummet to record lows.

The Treasury Department should be fired for gross incompetence and dereliction of duty for not issuing billions and billions of new 50-year and 100-year bonds, for that would completely eliminate all refinancing risk while hungry buyers of "safety" wolf down even more Uncle Gorilla paper.

redpill's picture

Why even bother with a term?  Just make infinity bonds.  1% forever. 

Hansel's picture

+1, and as long as the Fed lets the banks borrow at 0% and buy those treasuries at 1%, the auctions will never fail.  It's like perpetual motion.  #ThisIsSoFuckingStupid

redpill's picture

And to think the poor OWS sheep are pissed now?  A few stock brokers driving Bentleys stokes the envious temper?  LOL if they only understood the true circle jerk nature between the Fed, the feds, and the bankers, omfg.


topcallingtroll's picture

Did robotrader get six greenies?

I dont know who is masquerading as robotrader up there, but I want my real robotrader back.

wombats's picture

LOL!  Why stop at 100 years?  Why not 1000 years?

kito's picture

jesuschristmas, will china just strap on a pair of balls already and jettison its treasuries! this posturing seems more like a democrat/republican show than a real dispute. both sides lobbing symbolic attacks but nobody taking any real steps. chinese chickenshits just wont bite the bullet and sell off their american paper.

SheepDog-One's picture

Seems now they may all be in on it together after all, and all their extensive underground city bunkers are indeed prebuilt to ride out WW3, and not for a major world disaster such as 'Nibiru' or whatever.

Yep...all signs point to all world govts in on this shit together and when the big one erupts soon they ride it out underground for a couple years while 90% of those left topside are incinerated. Its the only thing that makes any overall sense now.

john39's picture

reports out there that underground shelters being destroyed...  fact or fiction?  stay tuned.

SheepDog-One's picture

Yes Ive followed those stories as well. Interesting, but we cant know. And the guy most of those stories come from Benjamin Fulford has a big question mark over his head at best to me.

Treason Season's picture

Check this guy out. 


Richard Sauder, Ph.D. keyholepublishing.com/Sauder.html


NewThor's picture

Elenin was a total bust. :(

DosZap's picture


will china just strap on a pair of balls already and jettison its treasuries!

Agreed, I cannot believe they have not done so already,they should be using the frn's to buy up every asset/commodity they will need for the next 100yrs.........

Dump the bitches, and really get Benny & the Jets shitting horse apples.

2 Trillion in new frn's ,uh, what would that do to the program?.

SheepDog-One's picture

Thats just why I no longer believe in any part of this 'show'...too perfectly coordinated while various gubments bitch and moan and rattle their sabres, whats been going on for 4 years is the PERFECT transfer of wealth to the world central bankers! This is all a big joke on the people of the world, and theyll all soon be incinerated in WW3.

Incubus's picture

they'll give me a rifle and a uniform and tell me to kill the enemy; but why won't they let me go the banks and fatcat mansions to do what they tell me to do? I don't have shit against the joe blows of some other country that got forced into picking up weapons for the fatass disgusting suits of their country.




DCFusor's picture

China is a lot of things, but stupid isn't especially one of them.  They have a lot of reserves, and income both from the bonds, and from sales to us and our "pals" around the world.  Anything like a real war - or just a trade war, and they lose all that income and have to start living on their principal. 

Would you make that choice when you can have it all?  We're not that stupid, why accuse them of that, or not having a pair.  They know they'll win if they just wait for us to self-destruct, we're doing that fine on our own, and by then they'll be richer AND stronger. 

Really, think it through.  They did.

topcallingtroll's picture

China prefers to remain intact as a viable entity.

They arent quite ready yet.

youngman's picture

When they get enough gold..they will sell..and sell fast..so fast as to take out the dollar...then they will announce their world currency plan backed by gold...that I think is their game plan and guess what..its better than ours...its better for the world...

DosZap's picture


If they wanted to do that, then they should liquidate T's NOW, and buy gold..............with the frn's (on the sly),and basically would OWN the gold market of the world.

They could in 30 seconds control the price of Silver, and Gold worldwide....................why they have not, is beyond me.

chdwlch1's picture

No shit...you see that fuckin' boat launch yesterday? HILARIOUS!!

topcallingtroll's picture

Yeah, and I also laughed at their "high speed" taxi tests of their knock off piece of junk they call their stealth fighter. Hilarious.

The only danger from their stealth fighter is that the lead paint is toxic to children.

moskov's picture

Look at F-35. Piece of junk nobody buys them at all. It's ugliest shit ever I saw in the modern aircraft