Indirect Interest Surges In $32 Billion 3 Year Auction Which Prices At Record Low 0.50% Yield

Tyler Durden's picture

Any concerns that the first bond auction following the US downgrade may not price well can be put to rest. Not surprisingly, following the historic rout in the stock market over the past week which has seen nearly $8 trillion in global capital market losses recently, the Indirect take down in the just completed $32 billion 3 year auction surged from 34.5% in July to a whopping 47.9%, the highest since May 2010, when the market was imploding for the first time following the first Greek collapse and when it was unknown just what the response by the central planners would look like. The Indirect hit rate was a solid 75.8%, as virtually all submitted bids got allocated in the final take down. As expected the note was a smashing success, with the When Issued trading 0.515%, and the final price closing well inside, at 0.50%, a record low yield. The Bid To Cover was close to a record high coming at 3.289, up from 3.219 last month, and well above the 3.162 average over the past year. Completing the data set was the take down of Dealers which was 41% on 51.3 LTM average, and the Directs which came in line at 11.1% compared to 12.93% LTM. Overall a very strong auction driven primarily by equity capital market concerns.

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trav7777's picture

with yields like this, we SHOULD be AAAA

barliman's picture


Mr. Miyagi says, "Risk Off!"

slaughterer's picture

Simple solution: Less money for NFLX, more money for Treasuries.  

Doyle Hargraves's picture

Like fucking sheep to the slaughter Bitchez!

WineSorbet's picture

This seems to make ilene's article at the top of the page seem a bit wrong.

fuu's picture

Isn't that Jesse's article reposted by ilene?

kito's picture

of course the auction went well, bubbles always do well until............

Johnny Lawrence's picture

Not sure there can be a bubble if the sentiment towards bonds is overwhelmingly negative.

kito's picture

not the Underfunded States of America bonds

kevinearick's picture

"We have people buying Treasury securities because they're worried about the Treasury," he added. "We've got people selling banks stocks, taking the cash and putting into the banks for safety."

Raymond Reason's picture

Hahaha!  We truly live in Orwellian times. 

JPM Hater001's picture

When Bernanke gets to announcing the next step how can he honestly say we need more stimulus.


So what does everyone expect will happen?  Will it be bullish or bearish for the market?

slaughterer's picture

1;30pm   Somebody is entering the text of the announcement and somebody is calling somebody on Wall Street with the results of the meeting.  

S&P 500 is slowly descending to 1140.

What does that tell you?


JPM Hater001's picture

So, probably no action yet and market begins the gradual slide back into a rout?

Greater Fool's picture

I don't think he can. I think the best he can come up with today is a new acronym or two--programs that do something that 99% of the people in the US don't understand. I don't think he has the okay for QE3.

Conventional wisdom is to sell the news no matter what the news is. Only exception would be an announcement of full-blown QE3 in trillions, or something similarly dramatic. Looking forward to watching the indexes gyrate in just a few minutes now.

...looks like BAC may finally be drifting off its $7 peg...

fuu's picture

Things starting to drift down now.

slaughterer's picture

It does not look good for an end-of-day QE3 rally to 1160.  

Shock and Aweful's picture

Honestly...where in the fuck is the demand for this shit coming from?

Is there a way to find out who is buying these treasuries?

I am not well-veresed in how the whole thing works...but I would just about bet the farm that "dealers" were ORDERED to buy this make sure this auction was well bid. 

Again. . .I don't really understand how the whole auction thing works...or who is even allowed to buy these things...but it just seems very counter-intuitive that it would be so well bid...especially when we are waiting for what most people think will be an announcement of MORE QE from the Bernank....

Thoughts....insights?  Anyone?


in-Credible Banker's picture

God - who the fuck is buying this shit paper???????  I have been short UST's for months and am getting KILLED!!!  WTF???

mailll's picture

Ah, the power of the printing press.  With it, all things are possible.

Bond market manipulation, stock market manipulation, political manipulation, etc. etc.

Doyle Hargraves's picture

Hyperinflationary collapses...

Youri Carma's picture

Witness one of Bernankesan’s last ‘Happy Days’ ...

chinawholesaler's picture

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