Posted on 02/12/2010 7:01:32 AM PST by Cheap_Hessian
There's no other way to describe this:
Bad. Actually, let's go worse than bad and call it what it is - by any definition this is just one step off from "Failed."
Yield was way over where it was trading at the time, as you can see here:
The more-worrying factor here is that we've got this "mystery" direct buyers out here again taking nearly 25% of the offered amount (who is bidding for that undisclosed?) and another 11% taken down by The Fed for the SOMA account.
(Excerpt) Read more at market-ticker.denninger.net ...
New York City in 1975 (default) was a terrifying dress rehersal for what is now beginning to the nation.
Can someone dumb this down for me?
I think it means nobody wants our debt.
Yet even with this Treasury had to pay up to get it to go and the bid-to-cover was anemic at best.
Given the Primary Dealer system we have in this country, any BTC under 2.0 is an effective fail. To get an auction that behaves in this sort of fashion, complete with mystery direct bidders and heavy SOMA (Fed) participation, yet Treasury has to pay up in the form of a significantly higher coupon is not a good sign at all.
LOL...that’s exactly what I was thinking. Please someone dumb this down for us.
You beat me to the question. I'm hoping that someone can give us a little supporting analysis here. I think this is an important issue. I'm naturally suspicious of the Fed & Treasury monetizing our debt but need a little help interpreting the data.
There was less demand for Treasuries during the last auction meaning they sold at higher yields.
If this becomes a trend, we’ll be in heap big trouble.
It means the price of long term government bonds was in a steap decline until the Fed and a mystery buyer showed up to the counter. As the price of a bond declines, the yield (interest rate paid to the purchaser) goes up. Thus, there was little interest in the US Government’s bonds unless it paid a higher interest.
This has adverse affects for the economy for any number of reasons. Home loan interest rates go up relative to 30 year bond yields. Commercial loans, both for real estate and general bonding go up.
It introduces uncertainty into an already uncertain market.
Gold and lead my friend. Gold and lead.
Please give me a little more info. They sold for higher. If it keeps up, why will we be in more trouble?
Mystery buyer, Soros?
Give me more info on why to buy lead??? Lead??
Straw purchasers on behalf of the Fed or Treasury, I’d guess. A way of printing money from nothing.
From December 17, 2009: China central banker says harder to buy U.S. Treasuries
It looks like the BTC here was 2.36.
What am I not getting?
I’ll dumb this down for you:
Remember the movie “Titanic” the one with Leonardo DiCaprio?? Remember the part where they are making love in the back of the Rolls Royce in the cargo hold? Remember hos the ship shook a little bit, just enough for people to look up and wonder “What was that?”
That, my friends, was today’s auction.
Have a great weekend (while you can).
J
Lead my lady in it’s most usable form. (That would be bullets or pellets)
:-)
The higher the interest rate, or yield, the more the federal government has to pay on its debt.
The more interest it pays, the more pressure is placed on the budget.
(”mystery” direct buyers out here again taking nearly 25%) That mystery buyer could be the government buy back their own debt, i.e. printing money.
Putting Today's Record 30 Year Direct Take Down In Perspective
Yet Another Opinion On The Mystery Direct Bidder, Barclays Edition
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