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Perfectly Forgettable $35 Billion 5 Year Auction Closes Despite Another Record Low Yield

Tyler Durden's picture




 

The only memorable outcome of today's $35 billion 5 Year bond auction was that the yield plunged to a new all time low, nearly 30% below the July auction, printing at 1.029% compared to 1.58% before. With the When Issued trading at 1.03%, this was an "on the screws" type of auction with absolutely no surprise at all embedded. The Bid To Cover was modestly week compared to LTM, at 2.71, below the 12 auction average of 2.81. Take down was again skewed toward Direct Bidders, as Indirects accounted for 42.1%, Dealers for 44%, and Directs taking home 13.9% of the total. As yesterday's 2 Year, this was yet another snoozer, allowing the government to fund $35 billion in deficits at a record low cost. And as long as the rates remain here, the Treasury will issue as much debt as it can to prefund trillions of future deficits at the lowest possible price, regardless of what the CBO says.

 

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Wed, 08/24/2011 - 13:17 | 1595756 Cognitive Dissonance
Cognitive Dissonance's picture

When does Timmy run down that $400 Billion line of credit he was given a few weeks ago? Should be real soon by my reckoning. Irene might help it along as well.

Wed, 08/24/2011 - 13:21 | 1595779 sabra1
sabra1's picture

so, did they replace the pillfered pension plans? thought so!

Wed, 08/24/2011 - 13:35 | 1595838 LawsofPhysics
LawsofPhysics's picture

operation twist would appear to be working just fine.  No need to announce any more QE when you can do it this way.  We appear to have hit equilibrium, for now.  

Wed, 08/24/2011 - 13:43 | 1595873 swissaustrian
swissaustrian's picture

-2.5 % REAL return annually (according to CPI). Yeah, I would buy that asset.

Wed, 08/24/2011 - 13:49 | 1595895 NotApplicable
NotApplicable's picture

ZIRP4EVA

Wed, 08/24/2011 - 13:56 | 1595914 buzzsaw99
buzzsaw99's picture

That's 13 bps above recent prices so the maggots will do well on the flip. Lately the auctions have been such a screw job on the treasury to the benefit of the PDs. The last 30y auction came in 30 bps above the price of the day and those effers turned right around and sold them for ~ 3.5% a few days later. God I h8 those mutha humpas!

Wed, 08/24/2011 - 13:59 | 1595931 firstdivision
firstdivision's picture

Holy crap! Who strapped the booster rocket on the 10Y yield?

Wed, 08/24/2011 - 14:03 | 1595952 dogboy12
dogboy12's picture

Debt doesn't fund the deficit.  Debt is strictly a monetary tool of the Fed. 

Wed, 08/24/2011 - 14:08 | 1595975 sudzee
sudzee's picture

The bernank must be royally pissed. Triying his best to get the dollar down and everyone else is beating theirs down too. Minus 2-5% real interest rates just ain't cutting it. Gotta try for -25%. Looks like we are all gonna be rich when the banks offer 10 or 20 % just to take loans.
I'm going to register my dog and cat so they can some of that free fiat too.

Wed, 08/24/2011 - 14:23 | 1596008 MoneyWise
MoneyWise's picture

Gold trade wagon get off the rails bu-ha-hahaha: *LOL*

http://img402.imageshack.us/img402/3118/trainwx.jpg

:)))

Wed, 08/24/2011 - 14:17 | 1596009 spartan117
spartan117's picture

I wonder if Jim Rogers is still short bonds.

Wed, 08/24/2011 - 14:20 | 1596012 Contra_Man
Contra_Man's picture

Introducing the Insured Bankster Savings Account - Open yours today!:

http://contramanfund.wordpress.com/2011/08/24/the-insured-bankster-savin...

Wed, 08/24/2011 - 16:35 | 1596483 SwingForce
SwingForce's picture

PRE-REFUND!  BRILLIANT TYLER, ABSOLUTELY BRILLIANT!

 

NEVER PAY IT BACK: http://www.xtranormal.com/watch/12373724/q-a-w-larry

Wed, 08/24/2011 - 16:42 | 1596521 SwingForce
SwingForce's picture

TREASURYS ARE NON-CALLABLE but the duration/interest rate risk can be mitigated by your PRE-REFUNDING BRAINSTORM! Get S&P back on the line, who's that new guy? CitiBankster-What's-In-Charge? Obie Debt Brother loving it!

Thu, 08/25/2011 - 00:42 | 1598156 Die Weiße Rose
Die Weiße Rose's picture

36 billion 5 year note auctioned at below 1%....

Primary dealers tendered 63 billion from their own accounts.....for what ?

63 billion is 400% above the  14b and 17b tenders submitted by Direct and Indirect bidders

Primary dealers are far outbidding anyone else at the lousy 0.979% Interest yield - is this a joke ?

why would anyone give away their money for any time-span at below 1% Interest ?

looks like the FED is borrrowing and lending to himself in an ever increasing circle !

while the USD is in a tail-spin....

The World is supposed to bear it with a grin while being fucked over in this never - ending

orgy of bugger thy Neighbour played by the criminal FED with what is called

the world's "Reserve - Currency" ( what a lousy joke )

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