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Bonds Sell Off Following Very Weak 30 Year Auction

Tyler Durden's picture





 

Minutes ago the Treasury auctioned off yet another block of $16 billion in 30 Year bonds. The auction was pretty horrible: the When Issued was trading at 3.155% when the press release hit that the bond cleared at only 3.199%, a huge 4+ bps tail for the longest duration paper. Internals were not pretty either: the Bid to Cover dropped from 2.94 to 2.40 and Dealers had to buy well over half again or 55.7% with Indirects taking a meager 28.4%, and the remaining 15.8% going to Directs, nearly half of the 29.5% from October. Obviously this is the inverse of what happened in Italy today, when the tail was a negative 150 bps and the 1 year Bill closed at just over 6% with the WI trading in the mid-7%'s. Perhaps the global banks, in an attempt to preserve the Ponzi one more time, pushed all their freely allocatable and repoable capital into Italy and had far less left for long US paper. Nonetheless, the yield at 3.199% was just the second lowest. We salute anyone who believes that as central banks are about to set off on a record printing episode to bail out Europe, that inflation will not rise. Needless to say, the weak auction pushed the entire treasury complex lower, as senn by the second chart of the 30 Year following the auction. With this auction, the refunding trio of issuance for the week is over and when all is settled on Monday, total US debt will be just shy of $15.1 trillion. We are so lucky that the Supercommittee is working up to snuff even as the next debt ceiling hike is rapidly approaching.

30 Year bond yields with the auction announcement marked:

 


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Thu, 11/10/2011 - 14:25 | Link to Comment transaccountin
transaccountin's picture

oil approaching 100$ wti, ya baby get that growth started

Thu, 11/10/2011 - 14:29 | Link to Comment topcallingtroll
topcallingtroll's picture

Yeah

But gold is getting monkey hammered today.

Thu, 11/10/2011 - 14:37 | Link to Comment BoNeSxxx
BoNeSxxx's picture

No shit... who is supressing gold?  It's getting donkey punched.

Thu, 11/10/2011 - 14:49 | Link to Comment GenX Investor
GenX Investor's picture

Debt deflation... engaged. 

James T. Kirk: Mr. Sulu, ahead warp one.
Hikaru Sulu: Warp one, sir.
Chief DiFalco: Heading, sir?
James T. Kirk: Out there. Thataway.
Thu, 11/10/2011 - 15:06 | Link to Comment topcallingtroll
topcallingtroll's picture

Dang.

I was trying to troll but cant get a single negative.

Half a percent is hardly monkey hammered.

I will never be as good as robo.....sigh

Thu, 11/10/2011 - 15:13 | Link to Comment BoNeSxxx
BoNeSxxx's picture

Nice try... but the PMs are behaving strangely today -- it isn't the 'size' that matters (where have I heard that before?).

Dollar down, DOW up, OIL up, ... normally the yellow metal hitches a ride.

Either that, or it was just those meddling kids again.

Thu, 11/10/2011 - 15:08 | Link to Comment SRV - ES339
SRV - ES339's picture

It's in the post... bond investment tied up rescuing Itali, so PMs get whacked to direct investment to bonds... just another day in the rigged financial system...zzzzzzzzzzzzzzzzzzzzzzz!

Thu, 11/10/2011 - 14:25 | Link to Comment littleguy
littleguy's picture

ugly

Thu, 11/10/2011 - 14:26 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Bullish for equities, of course

Thu, 11/10/2011 - 14:26 | Link to Comment Roland99
Roland99's picture

oooo....I feel like running with the bulls today!

 

(oh wait...I'm not in Pamplona)

 

Thu, 11/10/2011 - 14:26 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Nothing a Geithner speech can't fix.

Thu, 11/10/2011 - 14:27 | Link to Comment lolmao500
lolmao500's picture

Update on Penn State :

http://rivals.yahoo.com/ncaa/football/news?slug=ycn-10407023

Penn State Scandal: Rumor Claims Sandusky “Pimped Out” Boys to Rich Donors

Just when you thought the Penn State child sex-abuse scandal couldn't possibly get any worse, we may have just scratched the surface. Joe Paterno being fired could be just the start of arguably the biggest downfall in the history of college athletics.

Madden stated that two "prominent columnists" are currently investigating a rumor that Jerry Sandusky's Second Mile Foundation, a non-profit organization aimed to serve underprivileged youths, was "pimping out young boys to rich (Penn State) donors." Madden went on to say that Jerry Sandusky was told by those running the show at Penn State football that Sandusky had to retire after allegations made in 1998 that the defensive coordinator was guilty of "improper conduct with an underage male." Sandusky, thought by some to be Joe Paterno's successor at the time, abruptly and somewhat shockingly retired from coaching in 1999.

http://en.wikipedia.org/wiki/Ray_Gricar

Ray Gricar was the DA and Penn State was in his jurisdiction...

http://www.pennlive.com/midstate/index.ssf/2011/11/gricars_nephew_on_199...

Former Centre County DA Ray Gricar's nephew on 1998 Jerry Sandusky case: 'Ray was beholden to no one'

Gricar, who went missing seven years ago and was declared legally dead over the summer, has come under fire as the Sandusky story evolves because a 1998 report that two boys were molested in a shower never led to charges.

"People ask why Ray did not prosecute, and I have no problem saying, because he clearly felt he didn't have a case for a 'successful' prosecution," Tony Gricar said. "... One thing I can say is that Ray was beholden to no one, was not a politician."

The guy disppeared in 2005 just months before retiring. Me thinks the guy was wacked.

Thu, 11/10/2011 - 14:32 | Link to Comment Irish66
Irish66's picture

Catholic church

Thu, 11/10/2011 - 14:34 | Link to Comment adr
adr's picture

Rich people pimping out little boys and girls for personal enjoyment, no say it isn't so.

The homes of the richest people in the world are filled with enough material to make 100 seasons of Law and Order SVU. Much of the Bilderburg meeting probably centers around how much cocaine it takes to get a nice supple 7 year old shipped from Singapore to the 5th ave apartment of the best commodity trader.

The top 1% lives in a completely different world where anything is permissible and the norm is getting 14 underage virgins per year to violate. Why would you want to have sex with your dried up cunt of a wife you only married to enhance the reputation of your firm?

Drugs, prostitution, kiddie porn, killings, ritual sacrifice, blood drinking, all par for the course at a Goldman Sachs holiday party.

Thu, 11/10/2011 - 14:55 | Link to Comment my puppy for prez
my puppy for prez's picture

Yes....this is all part of a MUCH bigger ring of globalist-satanists who believe that having sex with a virgin boy gives them great supernatural power...and killing children is done routinely to honor their god, Satan.  This is NOT rumor or conspiracy!  The CIA, FBI, CPS, and certain "early childhood centers", and UN are also involved in the trafficking of children for these purposes.

If you want to know more, search "Ted Gunderson" or the "Franklin Credit Union" to see how high this child abuse and evil goes!

This is the ultimate in horrors of all the evil in the world today.....makes me literally ill.

Thu, 11/10/2011 - 21:33 | Link to Comment cleverlemming
cleverlemming's picture

How do I trade on the knowledge that satanists rule the world? Help me out.

Thu, 11/10/2011 - 14:28 | Link to Comment nobusiness
nobusiness's picture

Higher oil, higher interrest rates, means higher stocks?  Of course.

Thu, 11/10/2011 - 14:29 | Link to Comment RobotTrader
RobotTrader's picture

Bonds still being lapped up like cotton candy

Gimme a 100 point ES selloff and everyone "flees" to safety of paper

As for oil....

OSX not confirming the oil spike.

OSX/WTIC ratio at the lowest since 2009.

Massive correction could be coming soon.

That't why retail stocks refuse to sell off.

Stocks like Kohl's selling at 52-week highs, impervious to credit market ills.

Thu, 11/10/2011 - 14:43 | Link to Comment adr
adr's picture

All based on Kohls wonderful bullshit comps. I wish you would actually go into a real store Robo. There is a huge difference between reality in retail and what ends up on paper coming out of the accounting department. Kohl's probably spends more on accountants trying to figure out ways to cook the books than they do on actual selling. The numbers are 100% pure unadulterated bullshit.

Every buyer I meet with says that sales are down over 30% across the board and every vendor I talk to says that sales are terrible. Yet somehow miraculously comps are all higher when they are reported and margins are higher as well. Are you going to believe paper from the CFO or the people that are actually in charge of putting product in the store?

Oh yes I actually meet with buyers at Kohl's, Bed Bath, Target, Dick's, Walmart and many others. My company sells $150 million dollars worth of goods to these various retailers. There isn't a single buyer I have met with all year that can corroborate the story that overall sales are better than last year at any of these retailers. Eventually reality must set in. If stock traders actually had any clue about real business the S&P would be in a world of hurt.

Thu, 11/10/2011 - 14:49 | Link to Comment SheepDog-One
SheepDog-One's picture

RearviewTrader actually doesnt care at all about Kohl's, or any of the other crap he talks about, he only looks at what has popped and puts it up to give himself something to brag over.

Thu, 11/10/2011 - 14:50 | Link to Comment SheepDog-One
SheepDog-One's picture

Hey Robo hows your Apple doin? Oh, not so good. Oh well, youll find another stock to gloat about after market close is accomplished.

Thu, 11/10/2011 - 14:53 | Link to Comment CvlDobd
CvlDobd's picture

I like this comment. Often I see little gold nuggets in your comments.

On the OSX ratio I see it's low but not 2009 low. Care to expan on your correction thoughts? Which market are you looking for a correction and which direction?

Thu, 11/10/2011 - 14:29 | Link to Comment Bam_Man
Bam_Man's picture

Bond vigilantes must be salivating at the profits-to-be-had shorting US Treasuries. At these prices they undoubtedly are the most over-priced "asset" on the planet.

It will be quite a spectacle - bond vigilantes vs. Bernanke and his printing press.

Thu, 11/10/2011 - 14:32 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

Love this market meltup...

it totally makes sense with that's going on out there..

/snark

Thu, 11/10/2011 - 14:36 | Link to Comment SheepDog-One
SheepDog-One's picture

Same way they animate a zombie, big, clumsy, jerky moves to give the appearance of life.

Thu, 11/10/2011 - 14:33 | Link to Comment CClarity
CClarity's picture

Bond traders have been whipsawed in recent weeks.  The 30 year was at 3.37 before Halloween, went to brieflyl below 3.00 and now a 4 bp tail on an auction and back to 3.16.  There are a lot of competing factors in this.  Flight to quality with Eurosector concerns and pressure.  Concerns about printing presses gone wild and inevitable inflation.  Ongoing deleveraging pushing deflation.  And very big . . . Banks need to up their capitol ratios and they aren't growing income via loans and such so they're selling assets - we see it in little companies they're spinning off, and reducing trading desk limits, and selling off some portfolio holdings.  Regulators are sniffing around and ratios matter big time right now.

Another unintended consequence.  So many with such interference in the financial system and markets.

Thu, 11/10/2011 - 14:34 | Link to Comment dereksatkinson
dereksatkinson's picture

TLT has given back all the gains from yesterday and right ahead of a 3 day weekend for the bond traders.  That's not good.

Thu, 11/10/2011 - 14:45 | Link to Comment SheepDog-One
SheepDog-One's picture

Gotta jack that DOW nonsense back over 12,000 by afternoon, after all, thats all that really matters.

Thu, 11/10/2011 - 14:41 | Link to Comment slaughterer
slaughterer's picture

Anybody notice the AAPL sell-off today?   iPads are getting hammered worse than gold.  

Thu, 11/10/2011 - 14:42 | Link to Comment SheepDog-One
SheepDog-One's picture

Robo hasnt commented about that yet.

Thu, 11/10/2011 - 14:41 | Link to Comment SheepDog-One
SheepDog-One's picture

I hope tomorrow morning we're reading on ZH about how nukes are landing in Iran and Israel....sick to death of all this shit.

Thu, 11/10/2011 - 14:43 | Link to Comment slaughterer
slaughterer's picture

Nah, you will get an interview with L-Pap, and a super Mario stick save of the Euro complex, plus a few cute photos of Merkozy.  Plus a preview of Michelle Obama's Christmas shopping list. Sorry, that is going to be your life tomorrow.  No Iran/Israel nuke showdown.  

Thu, 11/10/2011 - 14:44 | Link to Comment SheepDog-One
SheepDog-One's picture

People think that just goes on and on? Theyll get killed real soon.

Thu, 11/10/2011 - 15:04 | Link to Comment El Oregonian
El Oregonian's picture

What a bunch of sick souless demented frigg'in pukes! Wha-? Oh no, not here... I was talking about the sick pukes at Penn St., You guys here on ZH are cool...

Thu, 11/10/2011 - 15:13 | Link to Comment vote_libertaria...
vote_libertarian_party's picture

...aaand I'm still sitting on my 2013 TBT calls....waiting...waiting

 

(as I sound my sinister laugh)

Thu, 11/10/2011 - 16:00 | Link to Comment Ironmaan
Ironmaan's picture

Older women who like young boys are called "cougars".

Older men who like young boys are called "Nittany Lions"

he he

Thu, 11/10/2011 - 16:19 | Link to Comment NaiLib
NaiLib's picture

Well, with a few more bad auctions people will start to take the shrinking FEDs  Costody Holdings for foreigners seriously. Perhaps sooner than later the

"exodus" will start. Already that the holdings shrink should be a serious warning, since during the same time there were still auctions of fresh paper.

 

http://research.stlouisfed.org/fred2/graph/?id=WSEFINT

Thu, 11/10/2011 - 16:19 | Link to Comment NaiLib
NaiLib's picture

Well, with a few more bad auctions people will start to take the shrinking FEDs  Costody Holdings for foreigners seriously. Perhaps sooner than later the

"exodus" will start. Already that the holdings shrink should be a serious warning, since during the same time there were still auctions of fresh paper.

 

http://research.stlouisfed.org/fred2/graph/?id=WSEFINT

Thu, 11/10/2011 - 16:31 | Link to Comment dcb
dcb's picture

hello, operation twist, bid poorly, wait to have the fed buy back ash rinse repeate

Thu, 11/10/2011 - 16:41 | Link to Comment yogibear
yogibear's picture

Bernanke and Federal banksters,  when can we start shovling  US dollars into the fireplace to keep us warm or use US dollars as wallpaper?

Fri, 11/11/2011 - 03:03 | Link to Comment pineyard
pineyard's picture

In the FINANCIAL WORLD ... INDICATORS ... are fashion .                                                                  Let me suggest a very accurate Indicator :

Everytime the US has an upcoming TREASURY SALE                                                                                                                                      something ominous emanates out of EUROPE                                                                                                                                                   If put in use for the short term investor :

Everytime a US  TREASURY BOND SALE is expected ..                                                                       SHORT  some European Financial Vehicles

Thu, 11/17/2011 - 02:14 | Link to Comment hazeL
hazeL's picture

Bonds are a constant investment that provides minimal risk and with today's economic situation, it would be your advantage if you know what bonds can do for you. Conservative investors have now actually preferred bonds during all the twists and turns of the stock market. Filling out a retirement portfolio at up to 15 percent with bonds is a good move, notes the Wall Street Journal. So if you're looking for a great investment without much threat, bonds are a safe course.

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