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Record Low Yield At 7 Year Auction, Second Highest Bid To Cover Ever Sends Total US Debt Over $15.1 Trillion

Tyler Durden's picture


As the panic from the busted German 10 Year auction earlier has settled, the money has gone to the last "safe" place for fiat (until the world wakes up to the fact that the "US is not Germany" and comprehends that it actually is) and flooded today's final of the week $29 billion 7 Year auction. The auction was a massive success: it priced at 1.415%, the lowest yield ever, and well inside of the WI which was trading at 1.44%. Not only that but the Bid To Cover soared from 2.59 to 3.20, the second highest ever except for May's 3.24. The internals were a little shaky, with Directs taking down a record 18.85%, and Indirects responsible for 39.88% (the balance going immediately to repoing Dealers). Still there is no denying it: when the panic is palpable, the last safe place for the time being are US bonds. And with that auction, total US debt, which was at $15.042 trillion, has now been pushed above $15.1 trillion a few days after we passed $15 trillion for the first time ever, once the $60 billion in new debt issued this week settles. As a reminder, the debt ceiling currently is at $15.194 trillion, which means there is about two auctions worth of issuance left before the US has to deal with the whole temporary debt ceiling hike all over again - luckily it will be merely a Senate vote (democrat controlled), so there will be no full blown scandal. The scandal will come soon enough.


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Wed, 11/23/2011 - 14:19 | 1907493 Gubbmint Cheese
Gubbmint Cheese's picture

Yes we can!

Wed, 11/23/2011 - 14:24 | 1907522 He_Who Carried ...
He_Who Carried The Sun's picture

Sadly the US situation is worse than Germany's since the Germans won't have to translate their tax forms to Mandarin...

Wed, 11/23/2011 - 14:26 | 1907536 trav7777
trav7777's picture

when this shit blows, look out

Wed, 11/23/2011 - 14:35 | 1907580 Long-John-Silver
Long-John-Silver's picture

It's going to Suck and Blow at the same time.

Wed, 11/23/2011 - 15:47 | 1907947 CORNGUY
CORNGUY's picture


Wed, 11/23/2011 - 14:27 | 1907540 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

No need.  Everyone already speaks english.

Wed, 11/23/2011 - 14:54 | 1907673 Tramp Stamper
Tramp Stamper's picture

There are more people in China that speak english, than there are people in the US.

Wed, 11/23/2011 - 15:01 | 1907709 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Everyone speaks english, even the French, though they won't admit it.

Wed, 11/23/2011 - 15:03 | 1907723 chubbar
chubbar's picture

And several million in the US don't speak english either. Keep the southern border wide open a few more years and english will be a second language for most people born in the U.S. Press 2 if you want to hear this in Spanish.

Wed, 11/23/2011 - 17:11 | 1908353 Big Slick
Big Slick's picture

"Living in a van down by the river!"

Wed, 11/23/2011 - 21:11 | 1909046 Buck Johnson
Buck Johnson's picture

This is becoming a black comedy, it truly is.  Everyone is insolvent, but which one won't bust in a few weeks that is the question.

Wed, 11/23/2011 - 23:46 | 1909373 covert
covert's picture

yes, we can go broke and get conquored!


Wed, 11/23/2011 - 14:20 | 1907494 transaccountin
transaccountin's picture

why only a senate vote? whens the next one where the bs happens

any1 putting fiat into treasuries is whatever cant wait for bubble to pop

Wed, 11/23/2011 - 14:19 | 1907495 kengland
kengland's picture

And they have no problem whatsoever. When the world uses your paper, you have the world by the balls

Wed, 11/23/2011 - 14:21 | 1907510 Greater Fool
Greater Fool's picture

And if they stop using your paper and that seems like it's important, you bomb the crap out of them. So you pretty much have 'em by the balls either way!

And some people are mystified that Presidents of both parties refuse to cut military spending.

Wed, 11/23/2011 - 14:27 | 1907542 trav7777
trav7777's picture

oil trumps paper and bombing.

the collapse of the reserve currency leads to the hyperinflationary scenario

Wed, 11/23/2011 - 14:30 | 1907558 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Stop being so simple.  To get credit just say things like, "Times ten" and "Math".

Wed, 11/23/2011 - 14:43 | 1907611 kengland
kengland's picture

That's right. Just not yet. Trav, I need a list of books from you please. Books that you would recommend. I really apprecaite your point of view. Keep up the good work.

Wed, 11/23/2011 - 14:22 | 1907513 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yup, because paper trumps all.  Go ask Robo.

Wed, 11/23/2011 - 14:20 | 1907502 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Debt debacle 2.0, bitchez.

Wed, 11/23/2011 - 14:47 | 1907625 SHEEPFUKKER

U.S. paper good as tungsten gold, or maybe just a bit less. 

Wed, 11/23/2011 - 14:54 | 1907672 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Tungsten is good until we audit the forts.  Paper is good until we audit the Fed.  I wonder which happens first.

Wed, 11/23/2011 - 14:20 | 1907503 spanky bernanke
spanky bernanke's picture

No real need for a budget. Nothing to see here, move along.

Wed, 11/23/2011 - 14:25 | 1907534 TeamDepends
TeamDepends's picture

Hope and budget don't get along too well.

Wed, 11/23/2011 - 15:00 | 1907704 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Obama has never used a budget, why would he now.

Wed, 11/23/2011 - 14:23 | 1907517 Ned Zeppelin
Ned Zeppelin's picture

Santa will be dropping an Xmas eve vote to increase the debt ceiling down the chimney with care! 

Wed, 11/23/2011 - 14:23 | 1907521 dereksatkinson
dereksatkinson's picture

When we have record directs, isn't that a contrarian indicator?  The public is buying?

Wed, 11/23/2011 - 14:29 | 1907553 sitenine
sitenine's picture

Not a contrarian indicator; but an indicator of fear.

Where the hell else are soon to be retiring (good luck with that) folks going to put their life savings now that every other asset class has turned to shit?

Wed, 11/23/2011 - 14:38 | 1907584 dereksatkinson
dereksatkinson's picture

If the public is buying record amounts of treasuries out of "fear" without any regard to the value of the asset they are buying, that is not a bullish thing for treasuries.  At least not beyond today.


Wed, 11/23/2011 - 14:25 | 1907525 sitenine
sitenine's picture

Dept to GDP over 100%, BITCHEZ!

Wed, 11/23/2011 - 14:54 | 1907671 SHEEPFUKKER

Even a broken debt clock is right twice a day. 

Wed, 11/23/2011 - 14:24 | 1907526 Cognitive Dissonance
Cognitive Dissonance's picture

Hell, what's the difference between $15.1 Trillion and $30 Trillion when all you need do is print all your problems away?

Wed, 11/23/2011 - 14:28 | 1907544 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Oliver Sarkozy couldn't have put it better.

Wed, 11/23/2011 - 14:25 | 1907529 hedgeless_horseman
hedgeless_horseman's picture



"Excellent. Everything is going as planned."

-Darth Timious

Wed, 11/23/2011 - 14:38 | 1907585 john39
john39's picture

that about nails it.

Wed, 11/23/2011 - 14:25 | 1907531 LawsofPhysics
LawsofPhysics's picture

With no where left to run, the masses clamor into the last "safe haven" to be slaughtered.  Is everybody in?  The ceremony is about to begin...

wish I knew some links to Wile E. Coyote clips wearing a sheep costume.

Wed, 11/23/2011 - 14:26 | 1907535 rambler6421
rambler6421's picture

Just wait when our treasury market becomes like Italy.

Wed, 11/23/2011 - 14:27 | 1907538 Deadpool
Deadpool's picture

whom - without penalty of death by bunga bunga - would lend at 1.415% for 7? oh that's right, we "owe it to ourselves". God help the working man, in 2018 when that shit has to roll.

Wed, 11/23/2011 - 14:54 | 1907667 object_orient
object_orient's picture

Where's the problem? Soon yields will be negative so .gov makes a tidy income by issuing more debt, More .gov income means less need for taxation, freeing up money for consumer spending and boosting the economy. Formerly burdensome credit card debt will become like a money market account. The perpetual motion machine has been invented.

Wed, 11/23/2011 - 14:29 | 1907549 FlimFlam
FlimFlam's picture

Safe for now.  Next month, perhaps very different.

Wed, 11/23/2011 - 14:29 | 1907550 FlimFlam
FlimFlam's picture

Safe for now.  Next month, perhaps very different.

Wed, 11/23/2011 - 14:29 | 1907551 Eally Ucked
Eally Ucked's picture

And who's bidding? Do we have any info about it? 

Wed, 11/23/2011 - 14:31 | 1907559 Hmm...
Hmm...'s picture

Interesting that USD is still used as safe haven over PMs. Seems counter intuitive to me... Unless investors and speculators don't think the PM market is big enough to handle the excess liquidity? Or just manipulation?

I continue to be a little nervous that PMs are correlating so much with equities lately.

Junk as you wish, but I have a lot of skin in the game and my assets are somewhat PM heavy, at least for me.

Wed, 11/23/2011 - 14:35 | 1907579 Deadpool
Deadpool's picture

don't give up faith. options expiry was this week...MF Global messed that up. Dec is big delivery month (stand and deliver or fail). China, Russia and India are buying. 11th year in a row of positive gains for gold. debt and dollars are toast. gold is eternal.

Wed, 11/23/2011 - 14:47 | 1907630 Hmm...
Hmm...'s picture

Oh I agree that PMs are likely great in longer term horizon,(next few years) I'm just a little wary of short term. Unfortunately in this game the winner is the person who loses least...

Wed, 11/23/2011 - 14:50 | 1907643 Deadpool
Deadpool's picture

well God help you if you just joined the PM party this year. 11th year is a charm? take heart that in those 11 years gold has had ZERO with a 8% correction and only 5 8% quarterly corrections. buy the dips!

Wed, 11/23/2011 - 15:16 | 1907793 Hmm...
Hmm...'s picture

I've said this before, but I have PM exposure from a few years ago, and then I increased it this year.

Most recently I bought around Labor Day, so I'm pretty upside down on that position.

the last few years I focused my energies elsewhere, by paying off ALL debt. 

My assets: home (paid), whatever is in my home, 2 cars (paid), 7 bicycles (paid), small plot of arable land with a water source (paid), More USD than I care to admit (spread around 3 credit unions earning 0.5 to 0.85%).  some physical PM.  A fair amount of CEF (my entire IRA is in CEF) and Treasuries in my 401k. and a little physical.  (less than most here would recommend, enough for me so I can still sleep at night).

I don't own guns personally, because I don't want them in my house.  But my family has many many guns, and I help my brothers buy guns.  (if the STHF they will be my muscle).

I am not a "true believer" in the precious metals.  I think they have a strong  story and good rationale for owning them.  However, I believe there are pitfalls. 

My dilemna: I have too many USDs.  I cannot decide if I should buy more PMs or if I should buy more arable land with water source.  There are pros/cons to both.  Everybody here knows the pros to PMs.  Cons include: Govt can take my PMs.  PMs are manipulated now, they may be manipulated going forward, PM's have made a startling run the last 10 years after falling for 20 years.  There are many pros to owning arable land with water.  However, Land can be taken through taxation (my local property tax bill on primary home went up 17% last year and 5% this year), and Land values are dependent on commodity prices, and prices for good pieces of land are high, thus could fall significantly.  also: I"m not a farmer!  (although I might be forced to be one depending on outcome).

anyway, I'm nervous with Gold's action the last 3 months.  I'm always a nervous nellie.  and I'm ok with that, it's kept me out of harms way thus far.  But I wish Gold weren't so correlated with equities lately.  and I it definitely is interesting (in a bad way) that "safe haven" still means "USD" to the masses.

Wed, 11/23/2011 - 17:09 | 1908343 Big Slick
Big Slick's picture

What CEFs are you in??

Wed, 11/23/2011 - 20:45 | 1908969 smiler03
smiler03's picture

I admire your honesty and your position. If I were you I'd think about buying a farm instead of having a house and plots of land.

Best Wishes :O)

Wed, 11/23/2011 - 19:16 | 1908819 FlyPaper
FlyPaper's picture

TO Hmm...   I think the answre to your question is Liquidity.   You can go out and buy bonds and dollars with no problem. If you buy gold you have to store it.  Besides this, the next piece of news is how the US is saving Europe, overtly or clandestinely via the FED and IMF.  



Wed, 11/23/2011 - 14:32 | 1907564 Fix It Again Timmy
Fix It Again Timmy's picture

Running into a shaking building during an earthquake is not the best survival tactic......

Wed, 11/23/2011 - 14:32 | 1907565 Deadpool
Deadpool's picture

CDS roundup

JPM +6bps to 177

C +15bps to 314

GS +23bps to 421 (lawsuits? German contasion??)

MS +23bps to 524 (France downgrade?)

BAC +34bps to 471 (survive the weekend?)

Wed, 11/23/2011 - 14:52 | 1907655 JustObserving
JustObserving's picture

This is beyond insane.  People are rushing to lend money at 1.415% for 7 years knowing fully well that real inflation is much higher than that and debts and unfunded liabilities are out of control in the USA.  US politicians cannot agree to a $1.2 trillion cut over 10 years while debt will grow by $8.64 trillion over the next 4 years and unfunded liabilities will grow by $26.2 trillion in just 4 years (

Good luck getting your principal back in anything resembling the current value of the dollar.

Markets are unusually insane these days.


Wed, 11/23/2011 - 15:01 | 1907710 monopoly
monopoly's picture

Agree, beyond words. But when it all blows up, and it will, I think we here are in a good spot.

Wed, 11/23/2011 - 19:28 | 1908841 FlyPaper
FlyPaper's picture

Just Observing and Monopoly:   The primary US banks are heading directly into bailout territory.  

a)  You think Congress is going to do a TARP with its current political makeup?

b)  How much money does the FDIC have to pay depositors back?   If answer = nowhere near enough, then

c)  The US government will have to go issue bonds to "recap" the US banks...    but

d)  THey have so much risk at this point, that the losses may exceed the US or Taxpayer's willingness to bail, possibly leading to:

e)  Deposits being 'frozen' ala MF Global by a bankrupt US government, and a Run on the Banks.

f)   Those banks have to sell $52b in new debt in the next 6 weeks.   Can they?

g)   BOA will need to be recapitalized.

No on with any brains, especially after the WAMU debacle, should (1) ever loan money to a bank, and (2) hold equity in a bank that is in financial trouble.

All Said:   So how is this going to work out OK?  




Wed, 11/23/2011 - 15:08 | 1907751 lolmao500
lolmao500's picture

``Investors`` are really fucking stupid. They really love their stupid US paper based on fairy tales.

Wed, 11/23/2011 - 15:29 | 1907852 slewie the pi-rat
slewie the pi-rat's picture

ben & timmah just fuking love it when a plan comes together

timmah has asked me to tell the EU:

  1. eat shit,
  2. lay eggs,
  3. and die young
Wed, 11/23/2011 - 15:39 | 1907898 lolmao500
lolmao500's picture

At the rate they are spending, we might reach $2 trillion deficit for 2012... thank god there's automatic cuts of 120 billion a year starting in 2013! I mean, running $2 trillion deficit is a nightmare, but running below that is just fine, it will create jobs, ask uncle Krugman.


Wed, 11/23/2011 - 15:43 | 1907917 johnnymustardseed
johnnymustardseed's picture

What is the worry, Ronald Reagan proved that deficits don't matter.

Wed, 11/23/2011 - 15:50 | 1907963 lolmao500
lolmao500's picture

Which is an argument actual democrats and republicans use. LOL

Thing is, while Reagan was president, there was an ongoing war with the USSR. Not to mention, the ratio of debt was small.

Wed, 11/23/2011 - 17:07 | 1908334 johnnymustardseed
johnnymustardseed's picture

Ronald Reagan made a huge mistake supplying missles to the Afghan Mujahideen, he should have left the Russians alone and we would not have had 911 in my opinion. The Republicans love war more than the Democrats. Basic guns or butter economics, our debt now prevents us from having either.

Wed, 11/23/2011 - 17:12 | 1907918 johnnymustardseed
johnnymustardseed's picture

The debt Reagan did run up was paid for by robbing entitlements and became common for all those that followed. At the time his almost Two Trillion dollar deficit was a lot. Silver was $4.00 an ounce. I thank him for that.

Wed, 11/23/2011 - 16:14 | 1908075 epwpixieq-1
epwpixieq-1's picture

Clearly we are starting to test what limn->0(1+1/(1/n))1/n , the most important number in history of economics - relevant for the compound interest rate, is equal to.

I am assuming that basic math does not make sense for some people, or maybe for the most of them, but hey, was there a time when it actually did?

In nature everything makes sense due to the dependences on the natural laws and the efficient system they create, in the current waste promotion-based human invented market system, nothing.

Nature does not tolerate waste, and will perish everything wasteful.










Wed, 11/23/2011 - 18:08 | 1908608 pineyard
pineyard's picture

US TREASURIES 7 Year sale are said to be SUCCESFUL

GERMAN  BUND sales are said tio be FAILING

Numbers :

US TREASURIES for SALE 93.2 Nillion . Actually SOLD : 30.3 Billion , Coverage 31 %

German Bund offered for SALE : 6 Billion , Actually SOLD 3.664 Billion , Coverage 60.7 &

As I see it German BUND Sales were DOUBLE as SUCCEFULL as the Sales of US TREASURIES

But may be ... I am STUPID ?

Wed, 11/23/2011 - 19:01 | 1908767 TheJokingJollyRoger
TheJokingJollyRoger's picture

Drowning in a sea of debt without any life raft.

Wed, 11/23/2011 - 22:17 | 1909194 JuicedGamma
JuicedGamma's picture

If we replace Obummer with Ron Paul maybe we can still pull this out with a stick save. Any other outcome and we are Krugmanned.

Thu, 11/24/2011 - 03:58 | 1909966 Grand Supercycle
Grand Supercycle's picture

USD selling pressure continues and the prospect of an equity xmas rally and EURUSD bullish spike returns.

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