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US Breaches Debt Ceiling Even More; Issues 10 Year Debt At Record Low Yield, Directs Surge
America may have breached its debt ceiling, but that is certainly not preventing it from issuing debt, placing another $21 billion in 10 Year bonds in a reopening, which priced 1.5 bps through the WI tail of 1.915% or at 1.90%. This is merely the latest record low yield in the history of the auction. The Bid To Cover came at 3.29: not a record, but certainly one of the top 5 highest. Oddly enough, while the Directs disappeared from yesterday's 3 Year auction, today they surged, coming at double last month's 8.4% at 17.4%, the highest since the August post-downgrade auction. Primary Dealers accounted for 44.3% with Indirects coming in at a very weak 38.3%. Still, the take home is that in the past two days, the US has raised over $50 billion in debt with no capacity, and instead is plundering from government retirement accounts, just like it did back in July 2011 at the first, but not last, debt ceiling theater. SSDD.At least we know what it takes to get new record low yields: just keep breaching the debt ceiling - guaranteed way to raise 30 Year debt at 0.00% in a few months.
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there aught to be a LAW, BiCheZ!!!
Who could've known that the debt ceiling was made from prop set glass?
Walking on shards of broken glass, bitchez.
More like they used chinese drywall for it...
If you don't break it, you'll get cancer... And when they do breake it, the chinese will supply new once!
http://www.youtube.com/watch?v=s2rMnov4Ae8&sns=em
It'll rot your copper & silver wiring, too. Very stimulative according to Krugman.
not from foxconn though. they're tempoarily understaffed...
China buying again, must keep the plastic crap coming?
Hans Gruber - Shoot the Glass
http://www.youtube.com/watch?v=8KiZz-W8Quo
went to change that to "ought" and saw that my effort was 4n-aught!
interesting wierd bastards that may be serious or just messing with me
please ignore the fishing for views thing and take a look
http://madbuilder.wordpress.com/2012/01/11/the-contact/
I think in many ways that you might be going mad.
Any way of knowing where the buyer money is coming from..??
Is the Fed still buying it with IOU's..??
Not directly, they tend to wait a few weeks then buy from the dealers. The Fed held $1.66 trillion treasurers last time I checked.
T +1
Yes.
http://www.newyorkfed.org/markets/soma/sysopen_accholdings.html
I seriously misjudged this. Last Friday when I saw the amount of treasuries to be sold this week I figured it would take some serious artificially induced angst to get enough people to buy them, but despite a rise in the stock market we get record lows. ??? LTRO money? Some hidden channel to the PDs? Has Europe already caused enough cash to be 'sitting around' that more angst isn't needed? Maybe the PDs are front running QE3? Clearly they didn't ask for my input on how things should go.
Here's how I view it: you're sitting with a big pile of USDs, and I mean millions of these FRNs (there's no shortage of them on this planet). Where do you store them that is "safe"? Do you invest them in Euroland or China? Do you throw it into the casino Wall Street runs, because you know they will piss it away. You can't put that much in a bank, right? So what to do - you throw them into a highly liquid safety containment vessel called the 10YR. Your Primary dealer has a bunch of them on the shelf, priced to market, and ready to hold your FRNs safely while you . . . . wait. The interest rate is beside the point. It's the vessel you seek.
Treasuries are not investments - they are devices to preserve capital. You use them to store FRNs. Now, if you are really worried, you buy gold. Not GLD, especially not post MFGlobal, now that you've learned that the assets you think you own are in fact owned by or hypothecated to someone else.
Lots of happy talk today on Bloomberg. Everything is looking up. Except for that sub 2% blinking light on the dashboard, and even more telling, a sub .25% 2 YR.
"SERVICE VEHICLE SOON"
Well, some how they have to. The yield is too low, and it does not reflect the credit risk.
Now what exactly is the difference between "breaking the debt ceiling" and "breaking the debt ceiling even more"?
The difference between diarrhea & anal leakage?
+ 1
Nailed it!
A little pregnant vs a lot pregnant is my guess.
The welfare world rolls on, until it doesn't.
YaBaDABaDoooooooooOOOoO!!!!
:)
I simply can't believe that people will lend their money out for ten years with negative real interest rates. Who the hell does that, besides people scared shitless?
Dr., my thoughts as well.
Who is buying this stuff which is virtually guaranteed to lose to inflation..??
Has to be government money, or their IOU's.
Like buying any airline's stock. Makes no sense.
Pump and dump that is how desperate it is.
It's a wash
Aren't they trading with the price ramping here and the yield being unimportant?
Locking up money for long term, 30 yr morgages aside, would be a losing proposition.
I find it hard to believe that they are trading looking for a price ramp at these levels, unless you think the yield is going under one,and if that happens I hate to see where the stock market ends up. I would say sub 6000.
Well, there are a few people who seem to be pretty knowledgeable about such things, although certainly not infallible, and they claim that the Nikkei shines the light on the road to Bernank's Perdition.
I believe that the Nikkei was trading at about 38,000 when it topped out. You see where they are now. I see that the perpetual bull Robo junked me.
It doesn't have to be the US market that goes to 6000. This may be all about Europe. If the euro dies like all true ZHers think it will that enormous amount of money will need to go somewhere. Treasuries are the least dirty shirt right now. Still I agree that if you want to go for a price ramp why not stay with the shorter durations.
They may be scared shitless but they're still as dumb as ever. I mean really... How can anyone with an IQ above room temperature not see the endgame at this point?
What about those who make decisions about their respective bond portfolios in the sauna? So now you're hating on Scandinavians... shameful.
Seriously though, what is the endgame because I really do not know? I mean, you're at the top of the Ponzi.
This is a good point. Think about the average investor now a days. Been through the crash of '87, dot com, housing bubble, Fall of '08....these people are scared shitless. They spent the last 30 years trying to make money and put it aside, and they have a negative return. That is why these people are happy to be in Munis/USTs/cash. It's "safe".
I beg to differ. Especially because people have gone through all those events which is why I don't think so. I would have NEVER considered PM 10 years ago or even 5. Some may be in bonds because they feel trapped in their 401K. I see so many more people investing in stuff that nobody considered before like land abroad, PM, Oil, etc. Usually, investments meant stocks and/or bonds, but I don't think anybody thinks so 2 dimensional anymore.
More than likely the FED is monetizing debt somehow. Gold price in the coming days should tell us if that is so.
Turn on any local talking head from Edward Jones & Co. They scare the retirees or soon to be retirees with all sorts of crap. A lot of old people are looking for any kind of return.
It is sick how they prey on the weak and feeble minded. They are the scum of the earth.
Yes that's right, they expect to lose 20% on the investment over 10 years.
However to have left it in private equities or sovereigns would have been to risk losing 90% through rolling defaults. Or even 100%.
So on the net, during these deflationary times (there I said it) they come out ahead.
There are some very smart people running these models. You should be very worried about what all this telegraphs to us from the dark corners of money.
I thought there were very smart people running the MBS and CDS models. We see how that turned out.
If it is as You say, We are screwed even worst.
1.9% for 10 years. It's fucking magic.
The Bernank steps onto the stage dressed in top hat, cape & white gloves, takes a bunny handed to him from his beautiful assistant, tells the audience to "watch it disappear," waves his wand three times, and proceeds to rip its fur off.
Crowd applaudes thunderously.
<no banksters were harmed>
"Nervos belli, pecuniam infinitam" (The sinews of war, unlimited money)
Raid those pension funds MOAR, FED! The people do NOT care! Theyre oblivious! May as well go for the Big Enchilada and just seize them all outright! America would probably cheer if Obama announced it!
Curiouser and curiouser. But, Tom Fitzpatrick (Citibank) was quoted by Barron's columnist as predicting the 10-year bond going to 1.25%. ??WTF?? Weird world we now live in.
Weird??? Nah, makes perfect sense, in light of the facade we used to call the bond market. Cramer will likely explain it like this...
Fedgov hits the "ceiling" meaning that they shouldn't be allowed to issue any more. "Market" reacts, scooping up all they can find now that they're becoming "scarce" (as reflected by the price).
Kinda like a couple of bums fighting over the last bottle of Mad-Dog. It's not really worth all of the pain and effort, but it's the only drug left, and its the only way to make it through the day.
Santelli; Nero is fiddling, fiddling and fiddling.
You ain't kidding brother. And Timmy G is plundering, plundering, plundering.
The house of cards is falling all around us while traders sleep. Credit event or US downgrades to wake them up first?
Time will tell.
Credit events or US downgrades?
Sorry, those have been eliminated from legitimate business activities and are now considered tools of terrorists. Only those who hate America would ever dare to wield these weapons.
Since the NDAA have any S&P ratings analysts gone missing? Perhaps after the re-education camp experience there won't be any more talk of downgrades.
Obama will easily reach 20 trillion by the 1st quarter of next year. Maybe even sooner. The spending spree before Obama's election will boost hope. The debt just keeps ramping further.
Part 2 Bernanke and the Federal Reserve banksters will print like mad men as part of their 100th year Federal Reserve Act (1913) anniversary death wish and trigger hyperinflation.
As the Federal Reserve banksters print we should see oil just explode to the upside.
"Obama will easily reach 20 trillion by the 1st quarter of next year. Maybe even sooner. The spending spree before Obama's election will boost hope."
Boost hope? Don't you think people know Obama is and has been raising the National Debt to Historic levels? That can't be good for the Elections.
yet once again, despite weakness of EUR/USD all overnight weakness has been reversed via algo churn during US session. I have no doubt all stock indices will eventually take out their globex highs in short order.
Great because I have some corporate stock options I'm sitting on that I need to unload.
No seriously, let them ramp this bitch. I want out at a nice top.
Pump and dump within a range...its about at the top now watch and see.
Look. Everyone wants to buy our debt. Since that's the case we should sell it to them. It's like a public service, helping wealthy Europeans and Chinese technocrats to get their money out of their own failing systems. Then we can give the money to our own banks thus ensuring the survival of Democracy 4 all time.
/s
I don't think that's alltogther correct. we really don't know who is buying our debt. chances are it's the federal reserve again.
/s = sarcasm
Someone needs to publish a ZH cheat sheet.
Pawn-Zee...negative velocity of money meets infinite printing bersnatchs!
ori
/a-ha-ahahaha/
Debt Demolition Derby!
http://confoundedinterest.wordpress.com/2012/01/11/german-auction-double...
And Plosser says that Fed will have to raise rates later this year!
LOL, good luck on them raising rates! Thats a complete impossibility when its nothing but a house of cards built on ZIRP.
Oh, he knows it isn't going to happen (as do we, given the ascencion of the doves that Tyler reported).
No, he's just playing the role of controlled opposition, barking loudly, yet firmly muzzled.
the public employees should never get one penny in a pension........take it all , i know the MAJORITY of people could care less
Plosser is off his rocker plain and simple. Over the edge of reallity.
Primary dealers are coerced, forced, what ever you want to call it to participate in this game. The only stop of this nonsense will come with ratings downgrades and until then nothing will change. The fact is this will likely go on for alot longer than we can believe before it all fails. BTW. There will not be a notice given to anyone.
No notice? That will be very nasty.
Just out: French PM Sarkozy says France is exasperated by the rating agencies, and that France needs to take control of it's own destiny on budget
Doesn't sound very pleasant for Mr. Sarkos and friends at the moment.
All the French know how to do is complain.
Yields are headed much lower still.
Investors made 18% or so on US treasuries last year. I thought with such a low yield you don't make shit especially with inflation being higher than the yield. Can someone explain to me how this works
Price appreciation. To get to 1.9%, bonds had to go way up.
Obama, Bernake and the Federal Reserve banksters have your back. It's OK to double the debt a couple of times while in office, Make the ceiling 30 trillion, then 60 trillion. Just get on the television daily and lie like Europe. It's worked for them.
When your really in trouble Bernanke and the Federal Reserve banksters can hyper-inflate. The Federal Reserve banksters, 100 years of banksters skimming American wealth (1913 to 2013).
QUESTION: IF THEY CAN BORROW AT NEGATIVE REAL INTEREST RATES WHY NOT DO IT. ISN'T TAKING ON DEBT LIKE THIS SMART? I MEAN... IF YOU COULD BORROW THIS CHEAPLY AND THEN THROW THAT MONEY OUT THERE AND TAX ALL ACTIVITY... THAT'S ACTUALLY GOING TO BRING DOWN DEBT TO GDP IN THE LONG RUN. EURO YIELDS ARE ANOTHER STORY. ANY THOUGHTS ON THIS?
Ministry of Truth just released the a new book of lies. All is well and the world wants our highly rated debt. Nothing to see here. Biz as usual. Print and spend.
But I notice the wording explicitly no longer mentions the Skittle-shitting unicorns. So I think that means something. But I couldn't hazard a guess as to what.
Oh, it's all in there. You just have to read it backwards.
Mind if I say something. The Bid to Cover number is a fraud. I used to bid on these auctions all the time...The thing they should show you is how far back the bids went...If they made the award at 1.95% I guarantee 50% of the bids were in back of 2.20%..Everyone scale bids and if everyone bid 1.95 the Treasury would sell them all they want...
Don't listen to alll that crap...The Directs even bid back...One big circle jerk
Tyler, you going to post new articles about plundering pensions soon? Those are the best! Hey America, you are being used, and not like Bill Withers!
"A tour of 3 million dollar foreclosures in Southern California – Calabasas, Bel-Air, and Brentwood. A $2.2 million dollar rental? Brentwood lists 1 home as a foreclosure on the MLS but has 90 homes in the shadow inventory."
http://www.doctorhousingbubble.com/
I just bought another monster box (500 ounces) of silver maples. It felt better than an orgasm.
The PONZI of the century, Banks buy US Debt then sell it back to the Federal Reserve at a higher price GENIUS! I bet you the FED has at least 9 TRILLION in US bonds on its balance sheet. Why do you think we cant audit the fed?
I keep thinking about a quote from A Few Good Men. "You want the truth!. You can't handle the truth!" Simple and plain reason is that no-one wants to know that there is no more PIG to put the lipstick on. They went with a fat dog and last I checked she looks beautiful and doesn't smell too bad. But only likes meat table scraps and has horrible breath.
Keep buying, keep borrowing. They should get Jerry Lewis to do the FED give the peoples money awayathons - I've got 9.563Trillion on the books anyone want a billion, come on we need to get to 10T.
Then bring out the hotties dressed up sexy, bending, stretching, bouncing and the phones start ringing.
"Where are we at now Jerry?"
Ding, ding, ding, we got a big order Goldman Saxs they just committed to taking a whole $1T so now we are at .. wait for it.... 10.123T.
Come on people we've got money!
Heck we are giving it away 'almost' FREE.
A thousand, a million, a billion or even a trillion - whatever you want, for whatever you can give. Heck Goldman gave us a nice silver plated pen collection as collateral. Isn't that 'special'. Got to be worth at least $2T now. Come on keep those phones ringing while we go to commercial on the
every minute of everyday FEDathon.
OldE
I've been calling the sub 2% 10YR the blinking red light on the dashboard, and after we're done giving all the very good reasons why the rate should be higher, let's ponder why it is not. Fear. That, and, the realization that there is no game left to play that will earn more, so why not get some safety with your minimal return. The Fed's "reflate the financial assets" game has failed. There is no one playing, unless you count the algos batting the ball back and forth.