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Treasury To Sell 10 Year Bonds At Record Low Yield Two Hours After Fed Buys... 10 Year Bonds

Tyler Durden's picture




 

A month after the US Treasury sold $24 billion in 10 Year bonds at what was then a record low yield of 1.86%, the US government once again approaches that mysterious primary dealer-repo nexus with the latest offer US banks can't refuse: a $21 billion reopening. What is notable about today's auction is that in about 40 minutes, the auction will price at a record low yield of just about 1.63%, or 23 bps lower to the last record yield.

So far so good: after all the global economy is once again collapsing (but don't look at US stocks for validation: they only indicate whatever Brian Sack wants them to indicate). Where things get patently surreal, however, is when one takes a look at today's POMO operation conducted by the Fed (remember those). Because as can be seen on the table below from the NY Fed, at 11 am today, so precisely 2 hours before when the Treasury will complete its own sale, bought $4.8 billion of... wait for it... 10 Year bonds.

To summarize:

  • At 11:00 am Fed buys $4.8 billion in 10 Year bonds
  • At 1:00pm the Treasury sells $25 billion in 10 Year bonds

Only in non-monetizing America, ladies and gents.

h/t Bill Gross

 

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Wed, 06/13/2012 - 12:23 | 2522115 Turin Turambar
Turin Turambar's picture

tick, tick, tick ...

Wed, 06/13/2012 - 12:36 | 2522164 Matt
Matt's picture

POMO = Permanent Open Market Operations, right? As in, never-ending? As in, no QE3 needed since the monetization of UST is a perpetual initiative. 

Wed, 06/13/2012 - 13:34 | 2522379 idea_hamster
idea_hamster's picture

If someone ran the headline

GEITHNER STERILIZES BERNENKE

I would have been sad to find out it was just a bunch of bond transactions.

Wed, 06/13/2012 - 14:33 | 2522680 malikai
malikai's picture

So they're only monetizing less than 1/5 of the issuance? Sounds like there's been more suckers born recently..

Wed, 06/13/2012 - 13:35 | 2522382 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Forget QE 3, it's QE Infinity.

Wed, 06/13/2012 - 14:16 | 2522568 piceridu
piceridu's picture

h/t Bill Gross??? Did PIMCO just join the the ZH Mod Squad?

Wed, 06/13/2012 - 12:24 | 2522119 Lost Wages
Lost Wages's picture

I can't tell. Did the Fed get a good interest rate on those? ;)

Wed, 06/13/2012 - 12:41 | 2522179 hedgeless_horseman
hedgeless_horseman's picture

 

 

Ben always pays top dollar to his primary dealer friends.  Bank on it...they do.

Wed, 06/13/2012 - 12:25 | 2522121 monopoly
monopoly's picture

I wish this would end already. But, not yet.

Wed, 06/13/2012 - 12:37 | 2522167 Turin Turambar
Turin Turambar's picture

Same here.  I've been reading and studying Austrian Economics for the past 2 years, and I'll be taking an online class on the Fed here in a few weeks.  Here's the good and bad of it:  The good is that my eyes are opened, and I can see exactly what is going on and what is going to happen.  The bad news is that I realize that there isn't anything I can do to impact the bigger picture, and all I can do is watch the bankers and politicians lie and defraud hardworking regular people on a daily basis, and I think they are going to get away with it for the most part - Corzine anyone?  I can't tell you how furious this makes me.

A rope and a tree are too good for these people.

Wed, 06/13/2012 - 12:49 | 2522208 CommunityStandard
CommunityStandard's picture

The answer of what to do about it is to educate asante as you can. Friends and family are a good place to start.

Wed, 06/13/2012 - 13:18 | 2522308 Screwball
Screwball's picture

I agree, but, people should understand it won't be easy.

I have been trying since before the whole shithouse blew up.  Very few if any have seen the light.  Too many just don't give a good fuck, or their too captured by their red team/blue team bullshit.  They still listen to the MSM and believe what they are told.

Fucking robots all.

The only way the masses will see the light is when the fucking light goes off.

Wed, 06/13/2012 - 14:37 | 2522706 Turin Turambar
Turin Turambar's picture

I agree.  I've been doing that for more than a year now.  The struggle for Liberty has been going on for thousands of years, and it'll still be going on long after I'm gone.  It's just that the OCD in me wants to fix the problems NOW!  LOL, and (remniscent of Peter Schiff's recent congressional testimony) I know the answers to the problems.

Wed, 06/13/2012 - 12:54 | 2522220 epwpixieq-1
epwpixieq-1's picture

Of course you can! Exit the corrupt unsustainable system in any way possible, with your money ( not with your live ), be self sustaining as much as possible and you will see the light (virtually and figuratively). Not to say that you will feel a lot better as a human being not bound by the dependency chains that bind the entire dummy society around you.

Wed, 06/13/2012 - 13:21 | 2522315 rockraider3
rockraider3's picture

Yes, one should exit the sytem and find ways to become as self sustainable as possible.  Self survival should be a basic human instinct, even though they've tried to breed it out of us.

But that's not "doing anything".  It's the equivalent of burying one's head in the sand.  And it is okay to avoid damage and collateral damage.  But if one is outraged at what has become of us, as a Nation and Globe, burying your head isn't part of a solution. 

Wed, 06/13/2012 - 22:04 | 2524219 Bringin It
Bringin It's picture

If everyone who says they're outraged at what's going on, took their chips off the table, the Ponzi nightmare would come crashing down sooner rather than later.

and then there's this too; Not to say that you will feel a lot better as a human being not bound by the dependency chains that bind the entire dummy society around you. - epwpixieq-1

Refuse to participate.

Freedom is good for you.

Wed, 06/13/2012 - 13:18 | 2522309 Kaiser Sousa
Kaiser Sousa's picture

Nothing will change until those being raped violently resist the rapists...
bankers r sociopaths....u cannot reason with sociopaths....
death to all bankers....
Fuck u especially Berstanke u fucking bitch.....

Wed, 06/13/2012 - 12:26 | 2522126 valley chick
valley chick's picture

and its gone!  that was easy!   /sarc

Wed, 06/13/2012 - 12:26 | 2522128 Dapper Dan
Dapper Dan's picture

I bought my wife's car today,  we made $1400.00 profit!

Wed, 06/13/2012 - 12:34 | 2522157 Beam Me Up Scotty
Beam Me Up Scotty's picture

Don't forget to claim that gain on your taxes next spring!! :0

Wed, 06/13/2012 - 12:37 | 2522173 junkyardjack
junkyardjack's picture

That's too bad, Uncle Sam wants his cut

Wed, 06/13/2012 - 12:27 | 2522130 Seize Mars
Seize Mars's picture

shit bags

Wed, 06/13/2012 - 12:28 | 2522132 carbonmutant
carbonmutant's picture

Watching water circling a drain can be very mesmerizing...

Wed, 06/13/2012 - 12:29 | 2522135 disabledvet
disabledvet's picture

Wait till they price a 50 year. What was that about the "End of the Debt Supercycle"? It appears "we've gone plaid" instead.

Wed, 06/13/2012 - 13:05 | 2522265 Amish Hacker
Amish Hacker's picture

50-years bonds are for pikers. I'm waiting for the Perpetuals.

Wed, 06/13/2012 - 12:31 | 2522139 101 years and c...
101 years and counting's picture

this week's treasury auctions are to be settled on friday.  typically done the following monday/tuesday.  why the need to hurry and settle these prior to the weekend for the first time ever???

Wed, 06/13/2012 - 12:58 | 2522238 web bot
web bot's picture

Repeat after me... the Hellenic Republic... also now known as "The Grecian Formula"

Wed, 06/13/2012 - 13:02 | 2522250 ITrustMyGut
ITrustMyGut's picture

in the rumor world.. allegedly... something BIG is coming due 15th ( or this weekend ) collpase? ww3 starting in syria, leading to iran.. or currency resets? not sure.. but this friday settle is interesting...

Wed, 06/13/2012 - 12:32 | 2522143 nomorebuyins
nomorebuyins's picture

I heard they traded these bonds on their government thingamijigs.

Wed, 06/13/2012 - 12:46 | 2522200 youngman
youngman's picture

Was Pimco buying.....???  so much news...so little booze....

Wed, 06/13/2012 - 12:52 | 2522216 CommunityStandard
CommunityStandard's picture

Don't forget the POMOlist! I want some monetized spiderman towels!

http://www.youtube.com/watch?v=qeo0ZeZalz4&feature=plcp

Wed, 06/13/2012 - 12:55 | 2522223 riley martini
riley martini's picture

 As Long as JP Morgan and the TBTF wealth transfer trade is dependent on low interest rates the Fed will provide low interest rates . We don't need to "end the fed" we need to change the ownership of the Fed new ownership should exclude the influnce of  the self serving corrupt political parties that make the transfer from the worker more perverted.

Wed, 06/13/2012 - 22:08 | 2524226 Bringin It
Bringin It's picture

Dude - your down arrow is not working.  We don't need a new cabal to replace the existing cabal.

Wed, 06/13/2012 - 12:57 | 2522237 Wakanda
Wakanda's picture

LOL!  It is one of the pleasures in my life to watch those bastards fail so pathetically, so ignobly, so completely.

I may not be around tomorrow, but I'm laughing my ass off today!

Wed, 06/13/2012 - 13:04 | 2522260 Chippewa Partners
Chippewa Partners's picture

When the SHTF may ZH live long and prosper.   What is Tyler doing to clone himself?

Life without ZH would be like Obama without a teleprompter.  Impossible. 

 

Wed, 06/13/2012 - 13:05 | 2522266 mendigo
mendigo's picture

TMI Tyler.
Encountered #ref error - saw blue momentarily.
One has to be very smart to comprehend this stuff.

Wed, 06/13/2012 - 13:06 | 2522268 Never One Roach
Never One Roach's picture

There are two methods, or means, and only two, whereby man’s needs and desires can be satisfied: one is the production and exchange of wealth; this is the economic means. The other is uncompensated appropriation of wealth produced by others; this is the political means...

- Alfred J. Nock

PS: (I lifted this quote from The Daily Reckoning)

Wed, 06/13/2012 - 13:12 | 2522285 Trying to Understand
Trying to Understand's picture

...so isn't this sort of like using one credit card to pay the other?

Wed, 06/13/2012 - 13:16 | 2522296 Bertie Bear
Bertie Bear's picture

FRONTRUNNING. Where is the SEC?

Wed, 06/13/2012 - 13:18 | 2522306 I am a Man I am...
I am a Man I am Forty's picture

anything new about this?

 

Wed, 06/13/2012 - 13:28 | 2522343 William113
William113's picture

Nothing to see here. Everybody go back to reality TV.

Wed, 06/13/2012 - 13:39 | 2522396 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bill Gross wrote this exclusively for Zero Hedge?

Wed, 06/13/2012 - 14:04 | 2522527 Sudden Debt
Sudden Debt's picture

Tyler: can the fed push the bonds into negative yields?

Wed, 06/13/2012 - 14:06 | 2522533 Grand Supercycle
Grand Supercycle's picture

Rally Warning Continues...

SPX bullish daily chart & USDX bearish daily chart strengthen.

Significant equity / EURUSD upside & USDX retracement ahead.

http://www.zerohedge.com/news/2012-12-24/market-analysis

Wed, 06/13/2012 - 14:17 | 2522581 Snakeeyes
Wed, 06/13/2012 - 14:42 | 2522739 MFL8240
MFL8240's picture

Did anyone say....PONZI!!

Thu, 06/14/2012 - 09:07 | 2525151 Doug_Canada
Doug_Canada's picture

If everyone thinks this is so wrong headed why don't you short them? Put your money where your sky is falling mouths are.

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