• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

$35 Billion 2 Year Bonds Price Uneventfully

Tyler Durden's picture


With the Fed expected to at least extend the period of guaranteed ZIRP from 2013 to 2014 tomorrow, it is no surprise that the just priced $35 billion in 2 year bonds did so very uneventfully, and at a high yield of 0.25% (38.96% allotted), in line with the When Issued, the note priced like what is was: an issue explicitly guaranteed by the Fed, and a yield reflecting it. The pricing was uneventful in the headline, and in the internals, with the Directs taking down 8.27% (quite lower than the TTM 13.05%), Indirects in line with average at 32.89% and Primary Dealers as usual accounting for more than a majority, or 58.84%. The Bid To Cover was a solid 3.75 if not a record. And now the Dealers will promptly reverse repo the bond back to the as nobody can do anything with a 0.25% yield in an environment in which investors demand double digits ROEs. Most importantly, however, was that this was merely the latest bond auction concluding even with the US debt ceiling still not getting an extension, and even more plundering from the G-fund. Once the ceiling is finally lifted, total US debt will move the maximum $15.2 trillion to well over $15.3 trillion overnight, maybe higher, just as it did back in August.

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Tue, 01/24/2012 - 14:16 | 2093205 lolmao500
lolmao500's picture

Foreigners being dumbasses yet again.

Tue, 01/24/2012 - 14:28 | 2093246 CClarity
CClarity's picture

No shame.  They just want their capital back then.

Mon, 05/07/2012 - 05:54 | 2402751 jaffa
jaffa's picture

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and or to repay the principal at a later date, termed maturity. Thanks.
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Tue, 01/24/2012 - 14:19 | 2093206 hedgeless_horseman
hedgeless_horseman's picture



I don't know about other Americans, but after co-signing all these notes, this tax payer is starting to get writer's cramp. 

Tue, 01/24/2012 - 14:17 | 2093211 Irish66
Irish66's picture

Where is Rick Santelli?

Tue, 01/24/2012 - 14:26 | 2093240 Everybodys All ...
Everybodys All American's picture

Rick has lost alot of his fire. The bosses at CNBC must have said something to him because he is decidely quiet lately.

Tue, 01/24/2012 - 14:28 | 2093247 CClarity
CClarity's picture

While Liesman gets his own new show.   

Tue, 01/24/2012 - 14:31 | 2093265 Executioner
Executioner's picture

Liesman. what a name!

Tue, 01/24/2012 - 14:29 | 2093257 Executioner
Executioner's picture

Collecting his paycheck at CNBC.

Tue, 01/24/2012 - 14:21 | 2093216 francis_sawyer
francis_sawyer's picture


Well... that makes sense... tonight is the SOTU address, so obviously it's a slow & uneventful news day... I wonder if OWEBama will wear his new Boston Bruins jersey?

Tue, 01/24/2012 - 14:18 | 2093218 Executioner
Executioner's picture

This is going on and on and on, months, years... and nothing happens to SP500, nasdaq and dow... Shouldn't this force the stock market to deleverage?

Tue, 01/24/2012 - 15:45 | 2093619 LawsofPhysics
LawsofPhysics's picture

If it wasn't for the current pressure on all currencies (all fiat losing value), then the answer would be yes.  Hedge accordingly.

Tue, 01/24/2012 - 14:33 | 2093269 847328_3527
847328_3527's picture

6%+ inflation and a 0.28% yield on bonds....

Sounds like a great investment!

Tue, 01/24/2012 - 15:24 | 2093535 tarsubil
tarsubil's picture

All I want is a $1bil loan at 10 basis points. I promise to stimulate the economy and contribute to which ever candidate. I'm not asking that much.

Mon, 04/16/2012 - 01:56 | 2347904 jaffa
jaffa's picture

However, if the real value of a currency changes during the term of the debt, the purchasing power of the money repaid may vary considerably from that which was expected at the commencement of the loan. So from a practical investment point of view, there is still considerable risk attached to low risk lendings. Thanks.
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