Last Treasury Auction Before US Breaches 100% Debt To GDP Prices Quietly And Without Surprises

Tyler Durden's picture

There is little if anything one can say about today's 5 Year auction. It priced at 1.055%, just above the record low 1.015% in September, and well inside the WI 5 Year trading at 1.08%, at a solid 2.90 Bid To Cover, compared to the 2.82 six auction average. The internals were boring, with Indirects taking down 49.3% of the auction, compared to the 40.5% LTM average, Directs declined modestly to 10.4% (in line with the 11.2% average), and Dealer take down unchanged from September at 40.3%. However, one massively notable thing about this auction is that it is the last one, probably ever, in which the US debt/GDP ratio is still under 100% following the auction. Adding today's $35 billion to yesterday's $35 billion in Two year bonds, brings total US debt to $15.010 trillion, with GDP still at $15.013 trillion (granted this number may be revised tomorrow), resulting in a debt to GDP ratio of 99.99%. Tomorrow's historical $29 billion in 7 Year bonds will take America into that uncharted territory of triple digit debt to GDP. But yes, the formal settlement of all bonds will not occur until Halloween, so we can celebrate on several days America's historic transition one step closer to insolvency.

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redpill's picture

Tonight we're gonna party like it's 99.99%!

GeneMarchbanks's picture

My maples are of the same purity 99.99

redpill's picture

This is Heli Ben's 9999 plan.

Ahmeexnal's picture

Solars falling off a cliff, not only in China:


The pride of Norway's industrial green energy effort, Renewable Energy Corp., has decided to shut down three Norwegian factories, or nearly half its local production, as a world glut in solar cell production forces the company's hand.

About 700 people will be laid off, a message to shareholders on Tuesday said. Third-quarter revenues of 3 billion kroner ($543 million) were not enough to stave off closures, and management used the occasion of its quarterly earnings release to deliver the bad news.


paging Leo...paging Leo...

dlmaniac's picture

New FASB rules will mark debt as future wealth. Nothing to look here.

Jumbotron's picture

The pride of Norway's industrial green energy effort, Renewable Energy Corp., has decided to shut down three Norwegian factories, or nearly half its local production, as a world glut in solar cell production forces the company's hand.

About 700 people will be laid off, a message to shareholders on Tuesday said. Third-quarter revenues of 3 billion kroner ($543 million) were not enough to stave off closures, and management used the occasion of its quarterly earnings release to deliver the bad news.


Eric Jantzen of called this bubble in back in Feb. 2008 in Harper's

Here's a snippet:

There are a number of plausible candidates for the next bubble, but only a few meet all the criteria. Health care must expand to meet the needs of the aging baby boomers, but there is as yet no enabling government legislation to make way for a health-care bubble; the same holds true of the pharmaceutical industry, which could hyperinflate only if the Food and Drug Administration was gutted of its power. A second technology boom—under the rubric “Web 2.0”—is based on improvements to existing technology rather than any new discovery. The capital-intensive biotechnology industry will not inflate, as it requires too much specialized intelligence.

There is one industry that fits the bill: alternative energy, the development of more energy-efficient products, along with viable alternatives to oil, including wind, solar, and geothermal power, along with the use of nuclear energy to produce sustainable oil substitutes, such as liquefied hydrogen from water.

epwpixieq-1's picture

Why use solar when one can have concentrated solar, build in his own yard.

Agreed, it is less efficient because of the thermal conversion  but you can make it from scrap parts.

Technology is not a panacea but a mean to provide something people need.

If this need can be satisfied with other renewable, more efficient and cheaper tech, we see the law of natural selection in action.

s2man's picture

@ Gene.  And four 9's is the goal in computer uptime.  Maybe they think four 9's is a universal goal.

Raging Debate's picture

Hmmm. Too much to explain commentary now. Time for me to write articles. Short: 3333 4444.

Think of man at the tipping point from using 3d paradigm and a 4d paradigm. Pyramids are a tool that geometrically is numbered 666. It is a human number representing our evolution itself. As we evolve so does our tools we build. Quantum physics is the study of the 4th dimension. Spirituality reflects our evolution too. The attempt at building the 'mega' super pyramid of 9999 is still a pyramid but the underlying intent I believe (as I don't know and now speculating) would be an attempt to crash through the wall. You need a Quantum Computer to enter 4d and for the information needed to enter the Promised Land. A scientist will tell you why and so could a deeply spiritual person.

jdelano's picture

Dow just went parabolic.  not wtf is going on?  

s2man's picture

saw that too.  perhaps hopium over the EU summit?  Tyler, got any clue?

SheepDog-One's picture

Highly bullish Im sure as it opens the door wider to more insane destructive money printing out of thin air.

bugs_'s picture

schedule ANOTHER debt ceiling vote???????

T-party and Anon/ows can you guys get together on this one?

RobotTrader's picture

No worries.

A 5% correction in ES after a fast 18% run off the lows will simply send everyone fleeing back into Treasuries again.

Once again re-invigorating "Animal Spirits" and setting up a monster run in stocks.  At the same time, Uncle Gorilla continues financing his deficits at practically zero cost.

Wash, Rinse, Repeat.

kengland's picture

Is that 100% based on current liabilities? Like cash accounting? What's more scandales, the breach or reporting that it's only 100%?

Tyler Durden's picture

The simplest, non-contested definition. Obviously by any other metric, the US is bankrupt 8 times over.

NotApplicable's picture

But, but we owe it to... wait for it... ourselves!

"We" are the 99%, after all. (Well, assuming "we" includes the Chinese.)

Aren't socialized collectives fun?

kengland's picture

"The simplest, non-contested definition."

Huh? Is this ZH or Mish's blog?

LongSoupLine's picture

Hmmmm, yep, sounds "AAA+" to me...

SixFeetFromTheHedge's picture

By that do you mean the fact that even if USA uses 100% of its tax revenues to pay off the debt (including accumulated interest) it will take exactly 9 years to pay it all off?

SheepDog-One's picture

100% assumes a $15 trillion GDP? Another total fantasy.

Snidley Whipsnae's picture

Gold is partying!

$1727.20 up 1.58% or $26.80 on option epiry day...

Long-John-Silver's picture

Is the next CME margin hike going to take it to 100%?

Long-John-Silver's picture

So they've run out of bullets..... I should go buy some Popcorn futures.

machineh's picture

'resulting in a debt to GDP ratio of 99.9%'

9-9-9 plan -- CHECK!

All your Treasury are belong to us!

Sequitur's picture

CNBC anchors apoplectic, look like deer in fucking headlghts given the unfolding disasters, e.g. Euro Summit, Greek Bonds, Italian leaders, AMZN, MF Global, NFLX . . . 

Snidley Whipsnae's picture

Those CNBC and other MSM talking heads have been peddleing bs for a long time...

Trouble is, bs won't glue the ramshackle world economy back together any more than printing more debt will.

LongSoupLine's picture

Well...time for CONgress to call the contractor and add yet another dormer to the roof. The down side is, all that roof weight isn't working so well with the foundation made of sand and water.

eBuddha's picture

it was fun while it lasted.


mayhem_korner's picture



Alas, $14 Trillion, we hardly knew thee.

The signpost up ahead...$16T.  Coming to a FUBAR-nation near you.

Pathetic.  How in the hell can ya run up $15T in debt???????????

Long-John-Silver's picture

The same way a stay at home wife can max out an infinite number of credit cards.

JohnG's picture

Talk to my ex.  Ran her credit cards to the limit and beyond on stupid shit (like lots and lots of booze, horrid clothes, etc.)   ....sooooo glad I kept our finances separate.  She went to BK, I didn't.  Glad she's my ex too, I think I would have shot myself by now.  14 years was ENOUGH.

mayhem_korner's picture



(Gulp) Way too familiar...I think I married your ex.  :D

JohnG's picture

I am so sorry about that.  Really, I feel bad for you.  Antifreeze is poisonous. ;)

Dick Darlington's picture

I bet Timmah will host a party, at tax payers expense of course, to his closest criminal partners to celebrate the 100% milestone. He'll call it "the debt shower". Larry will be the ball juggling clown. Long live Pinocchio!

ArkansasAngie's picture

You know I don’t care what OWS stands for. At this moment … the enemy of my enemy is my friend.

I’ll worry about arguing with people about what needs to be done just as soon as the current evil-doers are thrown out.

Long-John-Silver's picture

I remember Washington D.C. supporting Al-Qaida when the Russians were occupying Afghanistan using that reasoning. That did not work out very well for US a few years later.

trav7777's picture

OWS is very dangerous in that they can identify a problem but their solution is what LED to the problem in the first place, except bigger!

Their plan is to raise more taxes so the government can get even bigger and make the elites even RICHER

TideFighter's picture

The sun is not that cheap...I know, I live on the beach in Florida.

YesWeKahn's picture

Is this why the market is rallying? The market is rallying on anything, even Obama pees.

JW n FL's picture

US cops tried to erase online evidence of brutality


Goldman Sachs v. Occupy Wall Street: A Greg Palast Investigation

Let them eat iPads's picture

Ok, who just levitated the markets?

Fess up, bitchez.

Long-John-Silver's picture

Timmy's giving out free Hopium hits.

SheepDog-One's picture

Probably got to pump it for the afternoon bad Eurozone news.

Besides, its ONLY the second trip up and down from +100 today anyway...all just the new normal total FUBAR.

RobotTrader's picture

Hard to be bearish when Goldman Sachs is up 4%