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Uneventful 30 Year Auction Breaks 3 Month Trend Of Rising Yields

Tyler Durden's picture


The week's final bond auction has closed in a manner comparable to the prior two: uneventful. Minutes ago the Treasury sold $13 billion in 30 year bonds at a yield of 3.230%, down from the 3.381% in March (the highest since the August US downgrade) precisely where the When Issued had been trading, and with a Bid To Cover of 2.76 just modestly better than the prior March auction's 2.70 and the 12 TTM average of 2.67. The internals were also quite boring with Direct taking down 13.4%, Indirects as usual stuck with just under a third, or 30.7%, compared to a 32.9% average, and Dealers taking down 55.9% of the total, an amount which will be promptly rehypothecated in various repo channels, thereby allowing the banks to convert cash into cash, but in the process fund more than half of yet another "successful" auction - just like always. This week's final auction brings total US debt to $16.66 trillion give or take.

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Thu, 04/12/2012 - 13:16 | 2338545 monopoly
monopoly's picture

Wake me up after 17 T passed. Beyond words.

Happy market today, just one little kink I noticed so far. No big deal, small cap stock.....AAPL!!

Thu, 04/12/2012 - 13:19 | 2338547 spiral_eyes
spiral_eyes's picture

LOL muppets selling their treasuries and buying equities.

muppets should get smart and buy gold and silver and lead.

Thu, 04/12/2012 - 13:29 | 2338596 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture



Dr. Berkrankyee, proctocologist at large: fist up muppet ass.......Bitchez !

Thu, 04/12/2012 - 16:42 | 2339318 BarberKen19
BarberKen19's picture

my neighbor's mom makes $82 hourly on the computer. She has been out of a job for ten months but last month her pay check was $14998 just working on the computer for a few hours. Read more on this web site and click Home .....  WWW.LAZYCASH.COM

Thu, 04/12/2012 - 21:19 | 2340156 xtop23
xtop23's picture

 Does she do this on top of her computer with her ass cranked up into the air just so and a large wooly mammal of uncertain origin rails away at her with a pronged schwinkie?

Thu, 04/12/2012 - 13:19 | 2338549 THECOMINGDEPRESSION

The insanity and LIES continue! LISTEN TO THE BERNANKE LIE


Thu, 04/12/2012 - 13:26 | 2338584 Paul Atreides
Paul Atreides's picture

Bernankes stinky fiat breath gonna melt gold and silver gains from earlier today...

Thu, 04/12/2012 - 15:49 | 2339123 Paul Atreides
Paul Atreides's picture

Sweet, gains untouched.

Thu, 04/12/2012 - 13:30 | 2338603 THECOMINGDEPRESSION

Where did the chairman come from? The street? He sounds like a drunk.

Thu, 04/12/2012 - 13:24 | 2338568 monopoly
monopoly's picture

Right, but they are forgetting to buy the best value stock on the board. I wonder, IF, IF, AAPL starts down how long can the rest of the market, outside of gold, silver, stay up big??? Just thinking out loud. The other momo stocks, eh, at least, not yet. 

Thu, 04/12/2012 - 13:24 | 2338570 LongSoupLine
LongSoupLine's picture



yay, fresh funny money to leverage 14-400x into AAPL.


what a crock of shit.

Thu, 04/12/2012 - 13:26 | 2338580 youngman
youngman's picture

I can see the PD´s buying ..they have too..by law I think...but who are the other idiots buying a 30 year bond at 3.23%..with todays numbers they have already lost money on the purchase

Thu, 04/12/2012 - 13:58 | 2338694 aztec two step
aztec two step's picture

There is no law that they have to bid. Call it a moral obligation. Regarding Profit and Loss today the bond is quite profitable as you bought them at 3.23 and they currently trade closer to 3.20. Each basis point is worth about $1900 on a 30 year so if you bought 100 million of those at the cheapest price of the day you are happy camper. They have also performed well on spread as the auction yield of 3.23 was 117 bps to the 10 year and that spread is currently 116 basis points.

Thu, 04/12/2012 - 13:34 | 2338613 Dick Darlington
Dick Darlington's picture

Beard Monkey has new "policy tool"???


04-12 13:12: US coast guard says investigating report of a rainbow machine in the...


Wonder what the pot at the end of the rainbow contains. Certainly not "tradition"...

Thu, 04/12/2012 - 13:35 | 2338618 gun4A
gun4A's picture

$1 666 0 000 000 000

The mark of the beast, amerika - satanic masonic doomsland ...

Thu, 04/12/2012 - 13:40 | 2338638 sansnobel
sansnobel's picture

Hey Guys, I got into an argument with somebody about the Primary Dealers (GS, DBZ, MS, Mizzuho etc.) I read somewhere once upon a time that they get the exclusive privilege of flipping their junk (US Treasuries) that they launder for the US treasury back to the FED. So in effect, when they buy these securities they never really hold any interest rate risk when it comes to the Treasury Bonds and bills that they buy. Is this really true or is somebody smoking something? I thought the NY Fed could only buy these Bonds at an auction, which implies that there is a secondary auction held between the PD's and the NY Fed being the only bidder for these securities? Anybody got an answer? Much appreciated!!

Thu, 04/12/2012 - 13:45 | 2338655 aztec two step
aztec two step's picture

That is a ludicrous theory which this blog regularly propagated in 2008 and 2009. It is preposterous and any one who understands how the business operates would know that you would need several hundred compliant and forever silent conspirators. It was a very ugly example of dangerous blogging by the uninformed.

Thu, 04/12/2012 - 14:50 | 2338878 NotApplicable
NotApplicable's picture

not... sure... if... serious...

Poe's Law strikes again!

Thu, 04/12/2012 - 14:28 | 2338806 buzzsaw99
buzzsaw99's picture

Search this site for "Sack and Frost".

Thu, 04/12/2012 - 14:33 | 2338832 Hohum
Hohum's picture

If I am wrong, someone will correct me.

The Fed doesn't buy anything at a Treasury auction.  The Fed also isn't driving a hard bargain with the PDs, which is good for them so they can unload the Treasuries at a profit.  Why would the PDs sell bonds elsewhere with no profit? 

Thu, 04/12/2012 - 14:28 | 2338810 slewie the pi-rat
slewie the pi-rat's picture

nobody coulda seen this coming, nobody!

Thu, 04/12/2012 - 15:34 | 2339062 aztec two step
aztec two step's picture

THe Federal Reserve will roll over maturing bonds at auction time but is legally constrained from adding to a position at the auction. So if they have a billion maturing they can bid for that at nothing more.


Regarding dealers: they are short term traders. The next bond buyback is tomorrow at 1100AM. That is an eternity for a market maker and no market maker will sit with a position for that long. Separately, a large chunk of what dealers bid for is to cover shorts. Those bonds have a home and are not intended to head to 33 Liberty Street.

Thu, 04/12/2012 - 18:53 | 2339760 sansnobel
sansnobel's picture

So to understand you correctly, Aztec two step, they only flip back to the NY FED what the FED says they can buy with their book of maturing Treasury debt.  So in effect, doesn't that give the debt a market buyer it may not have if the dealers tried to sell it to open market players?  IOW the price of the bond after it was already taken down today at original auction has little chance of changing since much of it is going to be flipped back to the NY Fed tomorrow??  My head hurts here!!! I'm trying to figure out what the NY FED pays the PD's when they (Re-auction) it to the the NY FED.  Do they pay what the PD's paid for the debt?  Or not?  If they NY Fed is paying them (the PD's) less than what they paid for it, then isn't that a loss for the PD's book at the time of sale of that bundle of securities?  Very confusing here!!  Thanks for your response though.  I feel like I'm taking crazy pills here

Thu, 04/12/2012 - 17:43 | 2339547 SAT 800
SAT 800's picture

This must be the right place to post that my Short Position on the US Treasury Bond contract, basis June, on the CME; put on two days ago at 141-15; and noted at the time here; is ahead $1000/contract; and I put on the stop loss now at 142. I think you can still short it; but it would have been better if you'd done it when I gave you the trade in the first place; it should have a couple of basis points to run yet.

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