[copious.abundance]

Well, the last result of this week's bond auctions are in. And the results are . . .

Today's 30-year auction went well. Yields were actually down a bit, bidders offered 2.68 times the amount of debt being sold, the highest in a year, and indirect bidders, a class of investors that includes foreign central banks, bought 49% of the sale, the most since February 2006.
>> Article <<

The yield on yesterday's 10-year auction went up by a hefty 11 basis points. Bidders offered 2.62 times the amount of debt being sold, compared to a so-called bid-to-cover ratio of 2.39 at the last five reopenings. Indirect bidders, a class of investors that includes foreign central banks, bought 34.3% of the sale. The average in the last five sales was 23.2%.
>> Article <<

Finally, Tuesday's 3-year auction went well. The ratio of bids to notes sold was 2.82 — much higher than it has been in recent debt sales, and the yield went down just a bit.
>> Article <<

So, I guess you could call it mixed results, but overall fairly decent.

[JJ]

denninger has a lot to say today about this...
http://market-ticker.denninger.net/arch ... eware.html

[Jotapay]

The big thing is 50% indirect bids on the 30-yr. FCBs are back into the treasury bond game and betting on deflation if this is a trend and not a head fake. This is a complete reversal from the past few weeks where we were headed to Mad Max. Very interesting times.

[patience]

Mike Whitney thinks he has Bernanke's shenanegans figured out:

http://www.smirkingchimp.com/thread/22252

Quote: "In the next year, China will buy roughly $200 billion T-Bills while the oil producing states and the rest of the world will add about $300 billion to their stash. That leaves more than $2 trillion for the domestic market where cash-strapped investors are likely to avoid government debt like the plague. So, who's going buy that mountain of low-yield government paper?

The banks.

The Fed has been helping the banks raise reserves for the last year. In fact, excess bank reserves have skyrocketed from $96.5 billion in August 2008 to $949.6 billion by April 2009. Nearly a trillion bucks in less than a year. But, why?"

Whitney thinks this was all done to get the banks to finance the govt's impossible 2009 deficit, and goes on to explain that. He credits Karl Denninger with sniffing this out.

This all gets curiouser and curiouser. Who knew how deep this rabbit hole goes?

[shortonoil]

patience said:

$this->bbcode_second_pass_quote('', 'M')ike Whitney thinks he has Bernanke's shenanegans figured out:

[DantesPeak]

$this->bbcode_second_pass_quote('patience', '
')
The Fed has been helping the banks raise reserves for the last year. In fact, excess bank reserves have skyrocketed from $96.5 billion in August 2008 to $949.6 billion by April 2009. Nearly a trillion bucks in less than a year. But, why?"

[patience]

Quote:

"the banks just re-deposting their excess funds at the Fed. But they have no requirement to do so, and could invest that money elsewhere - which would suddenly balloon the money supply and lead to high rates of inflation."

Some people are predicting a run in commodities this year. If so, that excess bank money could go there and balloon commodity prices, quickly starting inflation, huh? Somewhere I saw that the Fed has more than doubled the money base this year, so are we looking at a 50%+ drop in the dollar? Bear with me, please, I'm new at this.

I'm looking for a "tell" to decide when it is starting. If this goes as I suggest here, then I can watch oil/gold/grain/food/copper/old rubber boots/orange juice prices start jumping and better dump the dollars, is my thought.

[DantesPeak]

$this->bbcode_second_pass_quote('patience', 'Q')uote:

"the banks just re-deposting their excess funds at the Fed. But they have no requirement to do so, and could invest that money elsewhere - which would suddenly balloon the money supply and lead to high rates of inflation."

Some people are predicting a run in commodities this year. If so, that excess bank money could go there and balloon commodity prices, quickly starting inflation, huh? Somewhere I saw that the Fed has more than doubled the money base this year, so are we looking at a 50%+ drop in the dollar? Bear with me, please, I'm new at this.

I'm looking for a "tell" to decide when it is starting. If this goes as I suggest here, then I can watch oil/gold/grain/food/copper/old rubber boots/orange juice prices start jumping and better dump the dollars, is my thought.

[copious.abundance]

Almost forgot to update this.

The Treasury had a 7-year bond auction Thursday of $27 billion. It went quite well.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Bonds rise after strong auction of 7-year notes
2 days ago

NEW YORK (AP) — Another strong Treasury auction is driving investors back into government debt.

Bond prices rose Thursday, sending yields lower, after the Treasury Department sold $27 billion in seven-year notes to solid demand. It was the last auction of the week, and a big relief to investors nervous about foreign buyers shying away from Treasurys due to the weakening dollar and inflation worries.

Treasury yields aren't just important to bond investors — they also affect interest rates on mortgages and other consumer loans. Mortgage rates spiked to seven-month highs in early June as inflation fears overtook the market.

This week's auctions, however, have all been robust. Thursday's auction of seven-year notes drew nearly three times as many bids as notes sold. Indirect bidding, which includes foreign buying, was high at 67 percent.

"All I can think of is that the central banks are back in the market in a fairly big way," said Tom di Galoma, head of U.S. rates trading at Guggenheim Capital Markets LLC.

[...]

[mattduke]

$this->bbcode_second_pass_quote('OilFinder2', 'A')lmost forgot to update this.

The Treasury had a 7-year bond auction Thursday of $27 billion. It went quite well.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Bonds rise after strong auction of 7-year notes
2 days ago

NEW YORK (AP) — Another strong Treasury auction is driving investors back into government debt.

Bond prices rose Thursday, sending yields lower, after the Treasury Department sold $27 billion in seven-year notes to solid demand. It was the last auction of the week, and a big relief to investors nervous about foreign buyers shying away from Treasurys due to the weakening dollar and inflation worries.

Treasury yields aren't just important to bond investors — they also affect interest rates on mortgages and other consumer loans. Mortgage rates spiked to seven-month highs in early June as inflation fears overtook the market.

This week's auctions, however, have all been robust. Thursday's auction of seven-year notes drew nearly three times as many bids as notes sold. Indirect bidding, which includes foreign buying, was high at 67 percent.

"All I can think of is that the central banks are back in the market in a fairly big way," said Tom di Galoma, head of U.S. rates trading at Guggenheim Capital Markets LLC.

[...]

[copious.abundance]

$this->bbcode_second_pass_quote('mattduke', '2')/3 of buying by foreign central banks. Free market participants are nowhere to be found.

[patience]

I read over at Tickerforum that a German Bank has resigned from being a Primary Dealer of US Treasuries, apparently because their new owner wants to reduce their risk exposure. One more bank with a belly full of T's.

[DantesPeak]

Bonds bought at a Treasury auction can be sold the next day. In fact if you follow the Fed weekly report on foreign holdings of Treasuries, you will quite frequently see less Treasuires held a week after the auction.

Granted if you were trader trying to guage interest rates over the next few days one auction result may help you understand the current market. But with the Treasury issing $2 trillion in net new debt this year, a $27 billion auction doesn't really predict where we are going in the next few months.

[sparky]

.

Oilfinder 2 is right , the auctions went very well considering ,
there is still a bit of a traffic jam for 2 years bonds but that pretty much normal
, everybody is playing scary cat .

the price of oil is VERY steady , the northern harvest is very good ( so far ) though soybeans are a worry

So there is going to be food on the table and petrol in the tank for this year at least ,
I don't know about jobs .

.

[copious.abundance]

I guess they're the place to be after all!

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Bond Dealers Say Worst Over as Demand Soars at Treasury Sales
By Daniel Kruger

June 29 (Bloomberg) -- Wall Street’s largest bond-trading firms say the worst may be over for investors in Treasuries after government securities posted their biggest first-half losses in at least three decades.

The 16 primary dealers, which trade directly with the Federal Reserve and are obligated to bid at Treasury auctions, forecast the benchmark 10-year note yield will finish the year little changed at 3.58 percent, after rising from 2.21 percent at the end of 2008, according to a survey by Bloomberg News.

The dealers, which include JPMorgan Chase & Co. and Goldman Sachs Group Inc., say the sell-off will slow after signs emerged this month that foreign buyers are scooping up record amounts of debt being sold by the Obama administration. Plus, yields at the highest since November are luring investors speculating that the economy’s recovery may be slow.

“We have seen an incredible amount of demand,” said Richard Tang, head of fixed-income sales at primary dealer RBS Securities Inc. in Stamford, Connecticut. “A lot of it is asset reallocation, out of risk assets and commodities. It’s been significant.”

[...]

$this->bbcode_second_pass_quote('mattduke', '2')/3 of buying by foreign central banks. Free market participants are nowhere to be found.

[sparky]

.

Still ....the interests rates and the value of the U.S. dollar is a worry.......... a real worry
there is plenty of bad news waiting , not least California (13%of the U.S. GDP) going in virtual bankrupcy
with plenty of other states and municipalities not far behind at a time of decreased income and increased demand for their help

this is not finance it's tight rope walking , as for the wisdom of investors the least said the better


.

$this->bbcode_second_pass_quote('patience', 'N')ot for long.

US to Default by summer 2009

[dinopello]

This may be off topic, but Arlington, VA will start selling their AAA/aaa bonds on the retail market starting in a week

Info on buying bonds.

I like living here. The place to be ?

[mattduke]

$this->bbcode_second_pass_quote('dinopello', 'T')his may be off topic, but Arlington, VA will start selling their AAA/aaa bonds on the retail market starting in a week

Info on buying bonds.

I like living here. The place to be ?