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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 | 2459333 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 | 2459343 mayhem_korner
mayhem_korner's picture



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

Thu, 05/24/2012 - 13:18 | 2459348 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 | 2459354 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 | 2459366 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 | 2459394 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 | 2459423 Quinvarius
Quinvarius's picture

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

Thu, 05/24/2012 - 13:43 | 2459448 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 | 2459462 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 | 2459554 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 | 2459452 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 | 2459469 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 | 2460152 post turtle saver
post turtle saver's picture

Deflation for luxuries, Inflation for necessities.

Thu, 05/24/2012 - 13:47 | 2459466 NotApplicable
NotApplicable's picture

ZIRP 'til the day the dollar dies.

Thu, 05/24/2012 - 13:21 | 2459360 NotApplicable
NotApplicable's picture

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

Thu, 05/24/2012 - 13:23 | 2459364 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~


Thu, 05/24/2012 - 13:20 | 2459356 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 | 2459367 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 | 2459416 catacl1sm
catacl1sm's picture

Build their own vault. HA! Take that banks!

Thu, 05/24/2012 - 13:48 | 2459470 NotApplicable
NotApplicable's picture

Why do you hate freedom and America?

Thu, 05/24/2012 - 13:23 | 2459368 mayhem_korner
mayhem_korner's picture



Dat U Timmay?

Thu, 05/24/2012 - 14:05 | 2459546 PivotalTrades
PivotalTrades's picture

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

Thu, 05/24/2012 - 13:24 | 2459370 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 | 2459386 mayhem_korner
mayhem_korner's picture



+1 Very nice. 

Thu, 05/24/2012 - 13:49 | 2459481 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 | 2459528 hedgeless_horseman
hedgeless_horseman's picture




Thu, 05/24/2012 - 14:42 | 2459707 Kilgore Trout
Kilgore Trout's picture


Thu, 05/24/2012 - 13:54 | 2459505 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 | 2459609 fuu
fuu's picture

There is no spoon.

Thu, 05/24/2012 - 13:16 | 2459334 urbanelf
urbanelf's picture

This is shocking news.

Thu, 05/24/2012 - 13:17 | 2459340 drink or die
drink or die's picture

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

Thu, 05/24/2012 - 13:21 | 2459358 mayhem_korner
mayhem_korner's picture



The "currently-authorized" debt ceiling...

Thu, 05/24/2012 - 13:26 | 2459377 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 | 2459461 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 | 2459342 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 | 2459345 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 | 2459351 Ahmeexnal
Ahmeexnal's picture

wha? ox pulled carts do not need gas.

Thu, 05/24/2012 - 13:29 | 2459392 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 | 2459413 CrashisOptimistic
CrashisOptimistic's picture


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 | 2459437 JimBowie1958
JimBowie1958's picture

Would you  please stop being so damned cheerful?


Thu, 05/24/2012 - 13:45 | 2459460 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 | 2459513 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 | 2459559 shovelhead
shovelhead's picture


That's very catchy...

Someone should use that as a slogan.

Thu, 05/24/2012 - 15:12 | 2459834 roadhazard
roadhazard's picture

ox farts = global warming.

Thu, 05/24/2012 - 16:28 | 2460108 earleflorida
earleflorida's picture


Thu, 05/24/2012 - 13:18 | 2459347 midgetrannyporn
midgetrannyporn's picture

Timmah pushed teh QuEasy button.

Thu, 05/24/2012 - 13:22 | 2459350 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 | 2459353 LawsofPhysics
LawsofPhysics's picture

CNBC covering this as "a record high yield".

Thu, 05/24/2012 - 13:32 | 2459405 NotApplicable
NotApplicable's picture

Original headline.

Record High Price, Record Low Yield

Editor at work. 

Record High Price, Record Low Yield


Record High Yield

Thu, 05/24/2012 - 13:48 | 2459472 XitSam
XitSam's picture

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

Thu, 05/24/2012 - 13:35 | 2459417 Bam_Man
Bam_Man's picture

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

Thu, 05/24/2012 - 13:48 | 2459475 BeetleBailey
BeetleBailey's picture



a) Didn't understand it

b) Couldn't grasp it

c) Can not fathom it


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 | 2459529 LawsofPhysics
LawsofPhysics's picture

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

Thu, 05/24/2012 - 14:49 | 2459726 Arnold Ziffel
Arnold Ziffel's picture

"Best time ever to buy an overvalued house."

Thu, 05/24/2012 - 13:24 | 2459372 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 | 2459422 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 | 2459441 Bastiat009
Bastiat009's picture

Where have you seen a shortage of oil?

Thu, 05/24/2012 - 13:46 | 2459464 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 | 2459534 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 | 2459453 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 | 2459484 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 | 2459486 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 | 2459902 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 | 2459569 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.


Thu, 05/24/2012 - 13:42 | 2459427 fuu
fuu's picture

What would you suggest people do?

Thu, 05/24/2012 - 13:46 | 2459447 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 | 2459498 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 | 2459495 BeetleBailey
BeetleBailey's picture

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

Oh damn...I have it;

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 | 2459845 Overfed
Overfed's picture

I want gold!

Thu, 05/24/2012 - 13:26 | 2459381 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 | 2459393 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 | 2459463 holdingontomypants
holdingontomypants's picture

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

Thu, 05/24/2012 - 13:55 | 2459511 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 | 2459473 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 | 2459474 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 | 2459525 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 | 2459620 unununium
unununium's picture

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


Thu, 05/24/2012 - 14:19 | 2459629 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)

Thu, 05/24/2012 - 14:51 | 2459737 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 | 2460957 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 | 2460025 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 | 2461029 covert
covert's picture

low quality junk, like russia.


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