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Is Something Wrong With This Six Sigma Picture?
The chart below represents the bid to cover on the US 4 Week Bill auction. Needless to say, the US just sold $30 billion at a yield of 0.000%. We will leave it up to readers to figure out why the announcement of the result at 11:30 am today led to a violent sell off in EURUSD.
And no, this is not seasonal:
Lastly, a Six Sigma way of showing today's result
chart: Bloomberg, John Lohman
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Then you coud get a 25% haircut! Nice fro man.
Right now the boggyman is Europe and everyone is head for treasuries. Wait until Bernanke and Washington becomes the new Greece. Rates should soar. You have to be nimble and move out of risky currencies.
Why would anyone want to park their money for free? Unless, of course, they are afraid that their banks are going to steal that money.
They know all too well that MF Global did not pursue practices outside of the mainstream. They just happened to get caught first.
Looks fine to me in this manipulated market. These weekly attempts at a short squeeze are getting rather funny.
Primary Dealers were the ones that massively bid on the issues. Holy crap do they want to guarantee their money back! http://www.treasurydirect.gov/instit/annceresult/press/preanre/2011/R_20111220_1.pdf
think why?
Just wondering...if someone big believes that short term US debt will be in high demand very soon, then it would make sense. I don't understand the EURUSD moved "based" on this news though. Just thinking aloud.
sorry, can't understand this, or your point. if someone would educate me a bit I'd appreciate it.
Why would anyone pay for a bond that doesn't pay interest?
to keep their money in the safest asset they can.
It is a bond that doesn't pay interest but it is backed by the full faith and fire power of the United States military.
Just say'n
there's a bank holiday coming people! doesn't matter if you're short or long, you won't be able to access the internet, hence your broker!!! take the hint!!!
Since when does a bank holiday shut down the Internet?
what's one without the other?
Now that just sounds silly. I spend 12 hours a day on the Internet and I don't think I have ever once visited a bank website.
(And before anyone says "jee-zuz dude go outside once in a while" know that I am a web application developer for a large Fortune 500 company, as well as having my own web-based start-up in the works for a Christmas launch. 12 hours for me is slacking.)
internet shuts down on grounds of "national interest" even if its rolling blackouts or they just shut the websites down of banks and brokerages until they can figure out what do to next.
Necessity is the mother of an internet shutdown invention:
http://www.zerohedge.com/news/bank-america-site-down-third-day-row
Do the smart ones get the take their monster boxes for a walk in the local park? BTW, doesn't a Bank Holiday include a currency devaluation and the beginning of the parabolic rise in the non-edible precious metals?
absolutely, yes!!!
It shows money is scared ,it also shows there is way too much liquidity with too little worthwhile investment opportunities. The powers have fucked everything up so badly that willingness to do anything is gone, or what is worthwhile has been perverted and degraded and ridiculed to the point of near extinction. I'm surprised farmers even plant food anymore. There is however the willingness to 'invest' in a 'sure thing' which appearently plenty of idiots are head over heels rushing to snap up, that which is based on nothing but fraud. I suppose I shouldnt be so amazed, but this is really really getting too ridiculous to even believe.
I have a theory that this is the beginning of a general bank run...
Let me explain. I have an account with Treasury Direct and before I discovered the 0% Cof I, I used to transfer my cash from my bank to TD using the shortest term instrument available, the 4-week bill, and roll them at maturity. After I discovered the C of I, i still fund it with the 4 week bill, but then let it mature to the C of I and just keep it there. The reason I can't go directly to Cof I is there is a daily limit to fund that instrument. There is no limit to pull it back out to the bank. Just a safe place to park your money and since interst is zero anyway you are not losing anything.
I think what your are seeing today is a large number of people wanting their money out of banks and into treasuries using the quickest means possible 9if, like me you want to own them directly and not through a brokerage account)
I think next week's auction will have me as a participant...
Forgive my ignorance, I've been dead lately.
What is the C of I?
Certificate of Indebtedness - it is truly an interest free loan to the government. It is not designed to be a vehicle to hold cash - it is meant to be a place from which you could fund t-bill purchases without having to keep rolling them through your bank, kind of like a throughput account. But with T-bill yields where they are, there is no penalty with just keeping your money there.
What violent selloff?
EURUSD rising steadily since 2 AM, up 75 pips.
Summing up the entire news item; So What?
Breaking the buck be coming. Those are insane figures. Libor is a hell of a drug.
Is sigma the same term as standard deviation? Trying to understand this event within my rudimentary math skills.
http://www.financial-risk-manager.com/risks/market/sixsigma.html