[DantesPeak]

$this->bbcode_second_pass_quote('mattduke', '')$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 ?

[copious.abundance]

Absolutely positively the place to B B B B B B B.



LINK
$this->bbcode_second_pass_quote('', 'J')ul 8, 2009, 4:27 p.m. EST
10-year Treasurys gain most since May after strong auction
By Deborah Levine, MarketWatch

NEW YORK (MarketWatch) -- Treasury prices jumped Wednesday, pushing 10-year yields to the lowest in about seven weeks, after the U.S. government garnered record demand for $19 billion in the benchmark securities, the third of four major auctions this week.

The auction "was one of the best 10-year auctions in history," said James Caron, head of U.S. interest-rate strategy at Morgan Stanley, one of the 17 primary government security dealers required to bid at the Treasury's sales.

Yields on 10-year-notes /quotes/comstock/31*!ust10y (UST10Y 3.30, -0.15, -4.35%) fell 15 basis points to 3.30%. A basis point is 0.01%. It's the biggest decline in yield since May 29.

The yield earlier touched 3.28%, the lowest on a closing basis since May 20.

Yields on 2-year notes /quotes/comstock/31*!ust2yr (UST2YR 0.91, -0.06, -6.11%) declined 6 basis points to 0.90%, after earlier declining to the lowest in more than a month.

The Treasury Department sold the 10-year notes at a yield of 3.365%, well below where it was expected to come, traders said. The amount offered matches the amount sold last month.

[...]

Analysts have paid more attention to the government's debt sales in the past few months in search of signals of whether investors, particularly foreign central banks, remain willing to buy U.S. debt.

"One of the persistent questions from investors is who is going to buy all these Treasurys the government is issuing to finance the yawning budget deficit," said Marc Chandler, a strategist at Brown Brothers Harriman.

So far this year, Germany, China and the U.K. have held auctions that failed to garner bids for the whole amount they attempted to sell, he said.

"The U.S. has not had that problem," Chandler said.

[...]

[copious.abundance]

Related.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]China’s $2 Trillion Reserves Keep U.S. Stimulus Program Afloat
By Bloomberg News

July 16 (Bloomberg) -- China’s foreign-exchange reserves are surging again, helping the Obama administration sell unprecedented amounts of debt as it seeks to drag the world’s biggest economy out of a recession.

Stockpiles of currency rose by a record $178 billion in the second quarter to top $2 trillion for the first time, the People’s Bank of China said yesterday. The amount is close to two-thirds the size of China’s economy and the equivalent of Italy’s gross domestic product in 2006.

The cash holdings are growing as the central bank sells its currency, the yuan, to prevent an appreciation that would make the country’s exports more expensive. The yuan sales mean for all the calls by China and other emerging markets for an alternative to the dollar as the world’s reserve currency, it has little choice but to keep buying U.S. government assets.

“People are talking about whether the Chinese may actually one day dump the dollar and Treasuries because of the problem in the U.S., but they are missing the point,” said Stephen Jen, head of macroeconomics and currencies in London at BlueGold Capital LLP, which manages $1.1 billion. “The reserves are so big because China needs to keep the exchange rate stable for its exports. Therefore, they have to keep buying dollar assets.”

[...]

[sparky]

.

Yeah , Here they are buying everything related to resources and paying cash ........in U.S.$

we are being bought out because of the financial incompetence of the U.S.


.

[copious.abundance]

Another big week coming up in the Treasury market.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Real Yields Highest Since ‘94 Aid Treasury $115 Billion Auction
By Daniel Kruger and Susanne Walker

July 27 (Bloomberg) -- The highest inflation-adjusted yields in 15 years are helping provide the Treasury with record demand at auctions as the U.S. prepares to sell $115 billion of notes this week.

Treasuries are the cheapest relative to inflation since 1994 after consumer prices fell 1.4 percent in June from a year earlier. The real yield, or the difference between rates on government securities and inflation, for 10-year notes was 5.06 percent on July 24, compared with an average of 2.74 percent over the past 20 years.

The gap helps explain why investors are buying bonds after losing 4.8 percent this year, the steepest decline on record, according to Merrill Lynch & Co. indexes that date back to 1978. While Treasury will probably sell an unprecedented $2 trillion of debt this year, Federal Reserve Chairman Ben S. Bernanke said last week that limited inflation pressures will allow policy makers to keep interest rates near zero.

“Concerns surrounding rising Treasury supply to fund the various U.S. stimulus programs are overblown,” strategists led by Brad Henis in New York at Citigroup Inc., one of the Fed’s 17 primary dealers required to bid at the auctions, wrote in a July 23 research report.

The government is selling $6 billion of 20-year Treasury Inflation Protected Securities, $42 billion of 2-year notes, $39 billion due in 5 years, and $28 billion of 7-year notes through July 30. It’s only the second time that three so-called coupon issues and TIPS will be sold in a single week since the regular sales began in 1976. The previous record was $104 billion in 2-, 5-, and 7-year debt the week of June 22.

[...]

[copious.abundance]

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

US to Default by summer 2009

[copious.abundance]

Haven't updated this in a while.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]China Buys Treasuries, Proving Dollar Demise Overdone
By Daniel Kruger and Anchalee Worrachate

Aug. 17 (Bloomberg) -- For the first time since the start of the global financial crisis, the U.S. government is breaking its reliance on short-term debt as foreign buyers pile into longer-term securities.

When the U.S. raised $75 billion last week, a group that includes international investors purchased a record amount of 3- year notes, the biggest share of 10-year notes since 2005 and almost half of the 30-year bonds sold, according to Treasury data. That helped extend the average maturity of U.S. debt from a 25-year low in the second quarter and showed diminishing concerns over the record U.S. budget deficit and inflation.

“Long-dated Treasuries are fantastic assets to have,” said Stuart Thomson, a fixed-income fund manager at Ignis Asset Management, which oversees the equivalent of $100 billion from Glasgow. “I have every reason to believe long bonds will rally. Inflation is subdued, and the Fed made it very clear they expect it to remain low.”

[...]

[Gerben]

$this->bbcode_second_pass_quote('OilFinder2', 'W')hen the U.S. raised $75 billion last week, a group that includes international investors purchased a record amount of 3- year notes, the biggest share of 10-year notes since 2005 and almost half of the 30-year bonds sold, according to Treasury data.

[copious.abundance]

AFAIK the Fed has mostly been buying longer-dated maturities - 10 years or more, not 3-years. So maybe some of the 10 and 30-year notes but probably not the 3-year.

[copious.abundance]

And BTW - I'm not certain but I don't think the indirect bidders includes the Fed. But I'm not sure on that.

[copious.abundance]

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Foreigners Snap Up Treasurys Even As US Debt Keeps Rising
Published: Thursday, 27 Aug 2009
By: Jeff Cox CNBC.com

Despite a seemingly endless flow of US government debt into the markets, foreign investors continue to gobble up Treasurys and keep yields relatively low.

That's important on several fronts, not the least of which is the government's multi-trillion-dollar borrowing program to finance its plethora of bailout and stimulus programs.

Foreign buying has been staying consistently above 50 percent and exceeded 60 percent in Thursday's auction. Treasury auctioned off $29 billion of seven-year notes and attracted solid demand, as have other auctions this week.

"There seems to have been some concern in recent months that China would start to diversify out of Treasurys," said Kim Rupert, fixed income analyst at Action Economics in San Francisco. "Their claims of that haven't been borne out by the data."

[...]

[DantesPeak]

I mentioned this before - the Treasury changed its bid submission guidelines a few months ago, and apparently, some 'news' writers [above] are still mistakenly assuming all non-direct bids are from foreigners. This is a false assumption. Indirect bids can be from large domestic buyers.

But that's not surprising since this 'news' was from CNBC.

[copious.abundance]

$this->bbcode_second_pass_quote('DantesPeak', 'I') mentioned this before - the Treasury changed its bid submission guidelines a few months ago, and apparently, some 'news' writers [above] are still mistakenly assuming all non-direct bids are from foreigners.

[DantesPeak]

$this->bbcode_second_pass_quote('Gerben', '')$this->bbcode_second_pass_quote('OilFinder2', 'W')hen the U.S. raised $75 billion last week, a group that includes international investors purchased a record amount of 3- year notes, the biggest share of 10-year notes since 2005 and almost half of the 30-year bonds sold, according to Treasury data.

[sparky]

.

What do you think of the spread between government paper
and normal commercial joe

.

[copious.abundance]

Still awaiting that oft-predicted massive sell-off of Treasuries.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]TREASURIES-Bonds rally on robust 30-year debt auction
Thu Sep 10, 2009 1:57pm EDT

* Heavy bidding at $12 bln 30-year bond reopening

* 2nd highest bid-to-cover since 30Y brought back in 2006

* U.S. jobless claims fell in latest week (Updates market action, adds fresh quote, changes byline)

By Richard Leong

NEW YORK, Sept 10 (Reuters) - U.S. Treasury debt prices jumped on Thursday, with the 30-year bond gaining two points in price after robust demand at a $12 billion reopening of a prior 30-year bond issue.

There have been lingering concerns the burgeoning federal budget gap will hurt the United States' long-term creditworthiness and foreign appetite for Treasuries. New borrowing will approach $2 trillion this fiscal year.

But the final of this week's auctions signaled there is persistent demand for U.S. government debt.

"This seals in the can that there is a lot of demand for Treasuries no matter what the maturity is," said Rudy Narvas, senior strategist at 4Cast Ltd in New York.

[...]

[BigTex]

I have never thought much of the argument that treasuries yields are going to explode.

The Japan example provides all the proof one should ever need that a government can borrow MASSIVE amounts of money and get nothing for its trouble except deflation and falling interest rates.

Treasury yields might go up dramatically at some point, but it's hard for me to imagine the conditions under which that would occur in the next 10 years.

Deflation is so outside the experience of most people alive today, however, that it takes a while for the idea to even seem plausible. Plausible or not, if you look you will see deflation everywhere, and it is the logical consequence of the bursting of a credit and asset bubble.

The unfortunate reality is that we can't "print" our way out of this mess. Contrary to what many people have come to believe, there is no "money printing" going on at all. What is happening is money is being created through the issuance of new debt. This debt will have to be repaid in the future, and thus will create a drag on future corporate earnings and future consumer spending, which will perpetuate the deflationary cycle (which will already be strongly in place as a result of shifting demographics).

There will be price spikes in oil and other commodities from time to time, but deflation will be the trend for many years.

It's not necessary to decide who is right about the deflation question right now. Just ask yourself how prices could rise if wages are falling? Ask yourself how prices could rise if credit is contracting? Ask yourself how money could be devalued if everyone is broke?

The entire story has already happened and it is called Japan. We are where they were in 1991, except we don't have the same export economy that they did, so their story would be an absolute best case scenario for us (our experience could be a lot worse).

One of the secrets to a thriving capitalist economy is not only access to cheap natural resources, it's also a growing population of working age people (Japan's population of 45-54 year olds--the highest spending demographic group--peaked in 1990; The U.S. population of this group is peaking right now).

The Japanese 10 year bond is currently yielding 1.33%. The U.S. 10 year treasury is yielding 3.34%. There is nothing to make me think that the 10 year treasury couldn't hit 1.5% in coming years, though that may sound completely insane today.

All I am saying is that one should have at least as much respect for the deflation scenario as the inflation scenario.

[jeromie]

According to the latest Federal Reserve Bank Consolidated Balance Sheet, FRB net purchases for the week were all notes and bonds of $4.968 bn. All of these purchases were likely through primary dealers having a reserve demand deposit account. That number is well within the usual FRB representation .


The September 9th Balance Sheet just got posted.

[patience]

What I'm seeing is money supply deflation for now, some prices falling on stuff I don't need (houses and cars), other prices going up (daily needs). Deflation it is for now. As Deninnger commented today, Congress could, as a desperate act, kick out the Federal Reserve and print money as a last ditch effort., but Karl doesn't see that as likely at this point.

I think it will get to that point, and I think that since spending is all Congress knows how to do, that IS what they will do, come hell or high water.

For us old poor people, that means to stay in cash for now, debt free, and save all you can. If/when it is clear that the currency is going down the drain, then spend it on whatever won't go to zero along with the money.

[evilgenius]

Don't forget to hedge. If you believe in inflation don't put all of your money into gold. Put some in bonds if you have enough to spread it around. If you don't have enough for bonds get into cash. In a world where nobody has any more credit cash is king.

Personally, I am looking for the gold bugs to get hammered by the next downleg. I think gold will go up, teasing them to buy, and then it will fall hard.

Most semi-literate people out there think there is going to be huge inflation. If you ask any one of them how it is going to transpire on a mechanical level none of the semi-literate people can answer you. So, for instance, if you say to them how is the bail-out money going to create inflation when it is covering Joe Sixpack's failure to pay money back that he borrowed from an institution most semi-literate people sigh heavily and increase the volume and begin to talk about conspiracies and banksters. If you bring the subject back to whether there can be inflation you are likely to be met with a bunch of regurgitated internet/Alex Jones hack packets of nonsense. Every hack thinks he knows better than the acknowledged experts, and has a litany of cute names for Bernanke and Geitner to prove it. It isn't that those men are above reproach, it is just that they are at least above the reproach of people who have trouble with Econ 101.