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Uncle Sam Borrows $29 Billion Due In 2019, At Another All-Time Record Low Yield

Tyler Durden's picture





 

Yesterday it was a record low 5 Year yield, today it is the 7 Year. Tim Geithner just issued a fresh $29 billion in 7 Year bonds at a new all time low yield of 1.203%, on top of the When Issued 1.200%,and paying a cash interest of 1.125%. Those concerned that the belly of the curve may not enjoy the benefits of Twist can put those fears at rest. The internals were non-eventful, with a 2.80 B/C, just shy of the 12 TTM average of 2.81, Directs taking down 15.70%, Indirects 42.73% and Dealers left with 41.57% of the auction, an improvement from yesterday when they were stuck with over 50% of the takedown. And so, with this final weekly auction, total US debt rises to $15.75 trillion.

 


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Thu, 05/24/2012 - 13:15 | Link to Comment fuu
fuu's picture

Do we ramp to green again now that the daily US funding crisis is over?

Thu, 05/24/2012 - 13:17 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Forgive me, sir, but you're speaking like an algo.

Thu, 05/24/2012 - 13:18 | Link to Comment Ahmeexnal
Ahmeexnal's picture

yields will turn negative when eurothanasia starts and everyone and his three eyed dog rushes into the safety of the reserve currency for the "last fix".

Thu, 05/24/2012 - 13:20 | Link to Comment Mountainview
Mountainview's picture

And who buys again most of this crap? At the end of the line Big Ben with his helicopter money!

Thu, 05/24/2012 - 13:23 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Big Ben doesn't "buy" anything.  He stores obligations for your grandkids.  Now go on and send him a gushy father's day card like a good sheep.

Thu, 05/24/2012 - 13:30 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Correct, he doesn't.

Actually, twist is selling that part of the curve and buying longer, so this low yield is an even more powerful indicator of the crushing effect of rampant deflation than without twist.

Deflation reigns supreme.  It has to.  The fuel for the engine of civilization is getting scarce and it has to run slower.  How can deflation be avoided in the face of that?

Thu, 05/24/2012 - 13:36 | Link to Comment Quinvarius
Quinvarius's picture

Scarcity causes price increases.  Problem solved with the application of basic economics.

Thu, 05/24/2012 - 13:43 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Economics, basic or otherwise, is a discredited discipline on ZH.

You may not use it in defense of anything.

Thu, 05/24/2012 - 13:45 | Link to Comment mayhem_korner
mayhem_korner's picture

Scarcity causes price increases.

 

Prices increase when the relative amount of currency pursuing the demanded item increases.  That can happen because of a scarcity of the demanded item OR an increase in the supply of the currency.  The latter is the primary culprit of late.

Thu, 05/24/2012 - 14:06 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"Problem solved with the application of basic economics"

So we can print oil now, fucking awesome.

Thu, 05/24/2012 - 13:43 | Link to Comment BalanceOrBust
BalanceOrBust's picture

If deflation is so ubiquitous, then why do my groceries and gas cost so much more than a year ago?

Oh, maybe I should buy a new 70" television.  Those have come down in price tremendously since last year.  However, they don't fit in my gas tank and they taste like plastic.

Thu, 05/24/2012 - 13:47 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

"Those have come down in price tremendously since last year."

So has the price of your house.

Thu, 05/24/2012 - 16:40 | Link to Comment post turtle saver
post turtle saver's picture

Deflation for luxuries, Inflation for necessities.

Thu, 05/24/2012 - 13:47 | Link to Comment NotApplicable
NotApplicable's picture

ZIRP 'til the day the dollar dies.

Thu, 05/24/2012 - 13:21 | Link to Comment NotApplicable
NotApplicable's picture

"Gonna ZIRP that debt service right out of thin air."

Thu, 05/24/2012 - 13:23 | Link to Comment ITrustMyGut
ITrustMyGut's picture

blow blow blow.. the bubbles.. we'll have a bubble good time!

 

then.. POP goes the bubble! ( with the new PRC direct connect, its assured now!)

I for one, welcome our new Asian overlords~

(not)

Thu, 05/24/2012 - 13:20 | Link to Comment zaphod
zaphod's picture

At some point, doesn't it just make sense for large institutions to take large amounts of cash, instead of a 7, 10 or 30 commitment with interest rate exposure risk?

Thu, 05/24/2012 - 13:24 | Link to Comment NotApplicable
NotApplicable's picture

Where are they going to safely preserve this cash? Certainly not in a bank! Hence, the "safe haven" fallacy of Treasurys.

Think of it as another form of paying protection money.

Thu, 05/24/2012 - 13:34 | Link to Comment catacl1sm
catacl1sm's picture

Build their own vault. HA! Take that banks!

Thu, 05/24/2012 - 13:48 | Link to Comment NotApplicable
NotApplicable's picture

Why do you hate freedom and America?

Thu, 05/24/2012 - 13:23 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Dat U Timmay?

Thu, 05/24/2012 - 14:05 | Link to Comment PivotalTrades
PivotalTrades's picture

They all believe that they will get out of that roach motel first!

Thu, 05/24/2012 - 13:24 | Link to Comment fuu
fuu's picture

01110111 01110100 01100110 00100000 01100101 01110110 01100101 01110010 00100000 01100011 01100001 01110010 01100010 01101111 01101110 00100000 01110101 01101110 01101001 01110100 00101110

Thu, 05/24/2012 - 13:28 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

+1 Very nice. 

Thu, 05/24/2012 - 13:49 | Link to Comment Kilgore Trout
Kilgore Trout's picture

My employer would not be happy that I just took the time to decode that.

Thu, 05/24/2012 - 14:06 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

01010011011001010110110001100101011000110111010000100000010101000110010101111000011101000000110100001010000011010000101001000011011101000111001001101100001011010100001100001101000010100000110100001010011010000111010001110100011100000011101000101111001011110111011101110111011101110010111001110010011011110111010101100010011000010110100101111000011010010110111001110100011001010111001001100001011000110111010001101001011101100110010100101110011000110110111101101101001011110101000001101100011000010111100101000111011100100110111101110101011011100110010000101111010000100110100101101110011000010111001001111001010111110100001101101111011011100111011001100101011100100111001101101001011011110110111000101111010000100110100101101110011000010111001001111001010111110101010001101111010111110101010001100101011110000111010000101110011000010111001101110000000011010000101000001101000010100100001101110100011100100110110000101101010101100000110100001010000011010000101001001100011001010111001101110011001000000111010001101000011000010110111000100000001101010010000001110011011001010110001101101111011011100110010001110011001011100010000000100000010101000110010101101100011011000010000001111001011011110111010100100000011001010110110101110000011011000110111101111001011001010111001000100000011101000110111100100000011011000110100101100111011010000111010001100101011011100010000001110101011100000010111000100000001000000100100101100110001000000110100101110100001000000111010001101111011011110110101100100000011110010110111101110101001000000110110001101111011011100110011101100101011100100010110000100000011101000110100001100101011011100010000001101101011000010111100101100010011001010010000001111001011011110111010100100000011100110110100001101111011101010110110001100100001000000110001001100101001000000110011001101001011100100110010101100100001011100000110100001010

Thu, 05/24/2012 - 14:42 | Link to Comment Kilgore Trout
Kilgore Trout's picture

01010111011001010110110001101100001000000110111001101111011101110010000001111001011011110111010100100000011101000110010101101100011011000010000001101101011001010010111000100000010010010010011101101101001000000110001001101111011110000110100101101110011001110010000001110101011100000010000001101101011110010010000001110100011010000110100101101110011001110111001100101110

Thu, 05/24/2012 - 13:54 | Link to Comment NotApplicable
NotApplicable's picture

01001110 01100101 01101111 00101100 00100000 01101001 01110011 00100000 01110100 01101000 01100001 01110100 00100000 01111001 01101111 01110101 00111111

Thu, 05/24/2012 - 14:17 | Link to Comment fuu
fuu's picture

There is no spoon.

Thu, 05/24/2012 - 13:16 | Link to Comment urbanelf
urbanelf's picture

This is shocking news.

Thu, 05/24/2012 - 13:17 | Link to Comment drink or die
drink or die's picture

What's the latest ETA on hitting the debt ceiling?

Thu, 05/24/2012 - 13:21 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

The "currently-authorized" debt ceiling...

Thu, 05/24/2012 - 13:26 | Link to Comment NotApplicable
NotApplicable's picture

Hit? You're making implications with that word that simply aren't true.

More like "shoving."

Outta my way!

Thu, 05/24/2012 - 13:44 | Link to Comment XitSam
XitSam's picture

Do you mean when is the roof going to be jacked up again?  With much emoting and gesticulating by Congress first, of course.

Thu, 05/24/2012 - 13:17 | Link to Comment eclectic syncretist
eclectic syncretist's picture

Get em' while they're hot.  Someday we'll look back on all this and say "those were the good old days"!

Thu, 05/24/2012 - 13:18 | Link to Comment mayhem_korner
mayhem_korner's picture

Someday we'll look back on all this and say "those were the good old days"!

 

Yes - when $29 billion was a US Treasury auction rather than the price of a tankful of gas...

Thu, 05/24/2012 - 13:19 | Link to Comment Ahmeexnal
Ahmeexnal's picture

wha? ox pulled carts do not need gas.

Thu, 05/24/2012 - 13:29 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Yes, try to convince us your ox is for pulling carts.  We know better.

Thu, 05/24/2012 - 13:33 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Tidbit.

Oxen are not special breeds.  They are normal cattle that have been trained from a very young age to pull.  

The bad news is cattle have been bred for over a century to be larger and have more meat on them.  This makes them eat more.  

So oxen we'll need in the near to intermediate future will require more harvest be hay (to get them through the winter) than was true 100 years ago.  It used to be about a 2:1 ratio of human food to animal food in acreage grown.  

It will be closer to 1:1.  This will force an even lower human population.

Thu, 05/24/2012 - 13:40 | Link to Comment JimBowie1958
JimBowie1958's picture

Would you  please stop being so damned cheerful?

/s

Thu, 05/24/2012 - 13:45 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Optimism is two things:

1) Pleasant to be around.

2) A very dangerous attitude in that it encourages risk taking.

Thu, 05/24/2012 - 13:58 | Link to Comment Ahmeexnal
Ahmeexnal's picture

You are right....ox pulled carts will be damn expensive.

Cheapest transport will be human pulled rickshaw. 

All you need is: carrot, string, stick, whip.

FORWARD! You're getting closer to your reward!

Thu, 05/24/2012 - 14:07 | Link to Comment shovelhead
shovelhead's picture

Forward!

That's very catchy...

Someone should use that as a slogan.

Thu, 05/24/2012 - 15:12 | Link to Comment roadhazard
roadhazard's picture

ox farts = global warming.

Thu, 05/24/2012 - 16:28 | Link to Comment earleflorida
earleflorida's picture

de`Oxfam... 

Thu, 05/24/2012 - 13:18 | Link to Comment midgetrannyporn
midgetrannyporn's picture

Timmah pushed teh QuEasy button.

Thu, 05/24/2012 - 13:22 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Saving money has been officially outlawed.

Everyone in the risk pool.  You too, granny.

Watch out for the algogators.

Thu, 05/24/2012 - 13:20 | Link to Comment LawsofPhysics
LawsofPhysics's picture

CNBC covering this as "a record high yield".

Thu, 05/24/2012 - 13:32 | Link to Comment NotApplicable
NotApplicable's picture

Original headline.

Record High Price, Record Low Yield

Editor at work. 

Record High Price, Record Low Yield

Result

Record High Yield


Thu, 05/24/2012 - 13:48 | Link to Comment XitSam
XitSam's picture

OH at CNBC: You mean there's a difference?

Thu, 05/24/2012 - 13:35 | Link to Comment Bam_Man
Bam_Man's picture

And I'm sure that most of the muppets watching believed it.

Thu, 05/24/2012 - 13:48 | Link to Comment BeetleBailey
BeetleBailey's picture

No.

They:

a) Didn't understand it

b) Couldn't grasp it

c) Can not fathom it

ergo

d) They changed the channel/went back to sleep/were mesmerized by the eye-bleeding data whizzing across the screen/stayed in their trances.

..for if they did, they'd be;

a) Out, organizing a march on Washington

b) Buying gold, guns, ammo  and non-perishables

c) Getting off  the grid, a al Bourne

....and which section of choices do you think the muppets did?

Thu, 05/24/2012 - 14:00 | Link to Comment LawsofPhysics
LawsofPhysics's picture

what's that?  dancing with the stars had me distracted.

Thu, 05/24/2012 - 14:49 | Link to Comment Arnold Ziffel
Arnold Ziffel's picture

"Best time ever to buy an overvalued house."

Thu, 05/24/2012 - 13:24 | Link to Comment Bastiat009
Bastiat009's picture

UST find more buyers everyday ... but few, if any, people want gold.

I am not saying it's right but it's true.

Thu, 05/24/2012 - 13:36 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

It's a global deflationary environment.  How can it be anything else with oil scarcity slowing civilization?

It's deflation despite trillions of stimulus.  Stimulus doesn't create oil.

And the bad news is, this is forever.

Thu, 05/24/2012 - 13:41 | Link to Comment Bastiat009
Bastiat009's picture

Where have you seen a shortage of oil?

Thu, 05/24/2012 - 13:46 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Population grows.

The rate of oil extraction from the ground (there is no such thing as oil production, it is extraction) is flat at best since 2005.

That's scarcity.

Thu, 05/24/2012 - 14:02 | Link to Comment LawsofPhysics
LawsofPhysics's picture

No shortage, it's about flux and the energetic cost to extract.  Big fucking difference.  We will stop using oil with plenty in the ground.

Thu, 05/24/2012 - 13:43 | Link to Comment JimBowie1958
JimBowie1958's picture

Your observationws are valid only till another form of energy emerges that is cheaper than oil and easier to find, like nickel, thorium or just water itself.

This is how free markets work and the technology eventually found will save our bacon, bet on it.

Thu, 05/24/2012 - 13:57 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Speaking of saving our own bacon, here is some great technology that is applicable.  A smokehouse that uses no oil, just wood.  I am working on the plans for mine.

Was I taking you too literally?

Thu, 05/24/2012 - 13:50 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

"like nickel, thorium or just water itself.

This is how free markets work and the technology eventually found will save our bacon, bet on it."

Trucks that deliver food to shelves run on none of those items.  And never will.

As for betting on it . . . so you choose to bet 7 Billion lives on a miracle.  You might want to poll the 7 billion on that.

Thu, 05/24/2012 - 15:28 | Link to Comment maximin thrax
maximin thrax's picture

"Trucks that deliver food to shelves run on none of those items. And never will."

No, but it's the relative cheap cost of fuel coupled with our gotta-have-it-right-now mentality that makes trucking so damned prevalent. Long before petrollium, we built a nation on waterways and railroads using wood, coal and wind. You had to wait a month or two to get something ordered from a catalogue but it got there. How much of our energy expense is the premium paid for the speed of delivery of goods we have become accustomed to? I bet a fourth of our fuel consumption is waisted on time compression.

But, yes, if we revert back to a 19th Century energy diet we will only be able to support a 19th Century population level. And still there will be many wars to secure the resources necessary for even that population. Billions will perish. That's why we need to perfect nuclear energy, especially breeder technology that uses up most of the fuel (giving us thousands of years of supply), even if hunderds or thousands might perish along the way due to nuclear accidents.

Thu, 05/24/2012 - 14:11 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Right, now where is the energy and captial coming from to make that investment while keeping 7 billion plus alive at a decent standard of living?

To pretend there are no hard limits is beyond stupid.  By the way, where are these free markets you speak of?  Fascism only excellerates the mis-allocation and mal-investment of capital and resources that are required for your "new technology".

Welcome to the post-growth world.  Fuck the paper-pushers, time for everyone to find out the real "value" of their labor.

LMFAO!!

Thu, 05/24/2012 - 13:42 | Link to Comment fuu
fuu's picture

What would you suggest people do?

Thu, 05/24/2012 - 13:46 | Link to Comment Bastiat009
Bastiat009's picture

People do what they want. I am not arrogant enough to tell people what they should do. I am just witnessing what is happening. And I am not claiming that I understand why people do what they do. I just have to live in this world and trying to make the best of it.

What's funny about this site (like most sites actually) is that people don't believe facts they don't like.

Thu, 05/24/2012 - 13:52 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

"What's funny about this site (like most sites actually) is that people don't believe facts they don't like."

I don't know the attribution, but it goes something like this:

There is no more difficult idea to persuade to a man than the idea that would eliminate his paycheck.

Thu, 05/24/2012 - 13:52 | Link to Comment BeetleBailey
BeetleBailey's picture

Look up the "odd-lot theory", next time you have the chance.

Oh damn...I have it handy.....here;

A technical analysis theory/indicator based on the assumption that the small individual investor is always wrong. Therefore, if odd lot sales are up - that is small investors are selling stock - it is probably a good time to buy.

Thu, 05/24/2012 - 15:14 | Link to Comment Overfed
Overfed's picture

I want gold!

Thu, 05/24/2012 - 13:26 | Link to Comment Village Smithy
Village Smithy's picture

Borrowing railway cars full of money at record low rates is very addictive. Most addictive situations end very badly. Bernanke has put us in a situation where we can't actually have the economy improve because the rush of money out of treasuries will be devastating.

Thu, 05/24/2012 - 13:30 | Link to Comment ITrustMyGut
ITrustMyGut's picture

this bond bubble-isciousness... is right on track to be the very absolute largest wealth transfer ever...

 

talk about completely pulling in every last penny

( so you can wipe it away with a algo "fat finger" instantly.. )

 

ben-oid and his masters.. are so rolling in the ailses...

Thu, 05/24/2012 - 13:46 | Link to Comment holdingontomypants
holdingontomypants's picture

Surely those printing presses and plates have to be worn out by now.

Thu, 05/24/2012 - 13:55 | Link to Comment BeetleBailey
BeetleBailey's picture

Nope. Machinists, Factory Oilers. Union, to boot. Those bad boys can run for centuries.

Hell, I bet even Gutenburg's press can still crank out stuff.

Thu, 05/24/2012 - 14:43 | Link to Comment John Law Lives
John Law Lives's picture

Way to go, Chairsatan and Timmah.  Keep subsidizing reckless deficit spending by Congress until the whole system implodes.

100% FUBAR.

100% SUSFU.

100% TARFU.

Thu, 05/24/2012 - 13:48 | Link to Comment holdingontomypants
holdingontomypants's picture

I predict in 7 years the headlines will be this...

Uncle Sam Borrows $29 Zillion Due In 2026, At Another All-Time Record Low Yield
Thu, 05/24/2012 - 14:01 | Link to Comment shovelhead
shovelhead's picture

Imagine if they gave out Green Stamps with those T's?

I could get a new gas BBQ grill to cook some road kill.

Try out my recipe for Awesome Possum Kabobs.

(I call them Bernanke Bits because the young-uns can be a mite squeamish)

Thu, 05/24/2012 - 14:18 | Link to Comment unununium
unununium's picture

Don't forget, Ben is still buying bad morgages too!  6 billion a week.

http://www.newyorkfed.org/markets/ambs/

 

Thu, 05/24/2012 - 14:19 | Link to Comment Whalley World
Whalley World's picture

An excellent article by Jim Willie on JPM and their exposure to interest rate swaps (hint, their exposure is far more than 3 billion)

http://news.goldseek.com/GoldenJackass/1337803200.php

Thu, 05/24/2012 - 14:51 | Link to Comment RationalPrepper
RationalPrepper's picture

Honest question:  Why not buy land and a house, lock in a 30-yr fixed at all time low rate, and watch your debt become inflated away and your monthly payment dwindle in real terms.  Of course the obvious answers are: (1) you could loose your income in a collapse and (2) you could never sell/get out of your home in a collapse because there would be no buyers. It's a risk, but a person could really come out ahead by doing so if in fact there is a devaluation coming, whether it's intentional or market-driven.

Thu, 05/24/2012 - 21:09 | Link to Comment Blankenstein
Blankenstein's picture

Because where I am, houses are still out of line with income and the large property tax bills added to the mortgage payment make the monthly nut very expensive.  (Chicago area)

Thu, 05/24/2012 - 16:06 | Link to Comment web bot
web bot's picture

What's unbelievable is that CNBC is talking about gold (also implicating silver) has lost its safe haven status. The event has not yet come to test the "safe haven status" theory. Gold is down due to short covering and the backing away of momo players. This is hardly an abandonment of gold as a safe haven.

Everyone is piling into US dollars for now... that is until a systemic collapse begins to unfold... then watch out... and its coming. The US can't bail out the entire world. A collapse is coming.

Thu, 05/24/2012 - 21:44 | Link to Comment covert
covert's picture

low quality junk, like russia.

http://covert.ias3.com/expose/

 

Do NOT follow this link or you will be banned from the site!