WGR Werk, Geldzaken, Recht en de Beurs
Hier kun je alles kwijt over sollicitaties, werksituaties, belastingen, (handelen op) de beurs, hypotheken, beleggingen en salarissen, arbeidscontracten of geschillen met je (huis)baas. Alles over werk, geldzaken en recht dus.
HOLY !@#!! Treasury Auction Schedule
Oh My......
Let's see if I can count this up....
70 day CMBs, $30 billion (tomorrow)
13 week Bills, $32 billion (July 27th)
26 week Bills, $31 billion (July 27th)
52 week Bills, $27 billion (July 28th)
2 year Notes, $42 billion (July 28th)
5 year Notes, $39 billion (July 29th)
7 year Notes, $28 billion (July 30th)
19 year, 6 month TIPS (reopened), $6 billion (July 27th)
That's two hundred thirty-five billion dollars over the next week!
Almost one quarter of a trillion....... geejus.
I guess you should get while the getting is good, but this is going totally parabolic. That money has to come out of somewhere, by the way, in order for the sale to succeed, which is going to get rather interesting at some point - but exactly where it matters is impossible to know.
I expected that when we crossed the $100 billion threshold in a week the market would throw up all over it, but it didn't. Now we've got the government trying to sell a quarter of a trillion dollars in debt over the next week, the announcement is out there, and while the bond market is selling off to a material degree equities could care less!
This is flat-out insane. At this run rate we would be trying to sell twelve trillion dollars over one year's time, an obviously ridiculous and impossible-to-peddle amount of debt at any price.
When does the rest of the world wake up (not to mention the primary dealers) and say "NO!"? Never? Is there a truly insatiable demand for our government's debt, despite the fact that President Obama got up on the national stage last night and promised to spend another trillion dollars we don't have?
How do equities power higher into this sort of debt issuance? Is it simply that the market has deduced that the government will hand all of this zero-interest money out - indefinitely?
Guess what - that which is impossible won't happen, and the stock market is now telling you that the impossible will become reality. There has been and will not be any amount of fiscal sanity on the part of our government until the market imposes it, and when it does it is going to happen in exactly the same way it happened to Bear Stearns, Lehman, Fannie and Freddie. May I remind readers that it was said that Fannie and Freddie "couldn't" get in trouble due to their implicit government guarantee? Well guess what - they both effectively failed, but when the US Government finds itself in the same situation it has nobody who can take it into conservatorship and as such we're just going to have to deal with the consequences of failed debt auctions - that is, dramatically increased funding costs across the board in the economy, including the government, which will choke off any hope of economic anything.
Folks, this is how you get detonation of a nation's monetary and political system. Timing the "event" it is not easy, but the certainty of outcome given this sort of outrageously irresponsible activity is not in doubt.
I'm increasing my stock of things that "will never go to zero" and keeping my ear to the ground. The "short the phone book but make sure you get out fast before you get trampled" moment approaches - mark my words.
==================================================================
Toch de moeite waard om dit even te volgen... Want dit is toch wel letterlijk begging om cash.Where cash = king.
Oh My......
Let's see if I can count this up....
70 day CMBs, $30 billion (tomorrow)
13 week Bills, $32 billion (July 27th)
26 week Bills, $31 billion (July 27th)
52 week Bills, $27 billion (July 28th)
2 year Notes, $42 billion (July 28th)
5 year Notes, $39 billion (July 29th)
7 year Notes, $28 billion (July 30th)
19 year, 6 month TIPS (reopened), $6 billion (July 27th)
That's two hundred thirty-five billion dollars over the next week!
Almost one quarter of a trillion....... geejus.
I guess you should get while the getting is good, but this is going totally parabolic. That money has to come out of somewhere, by the way, in order for the sale to succeed, which is going to get rather interesting at some point - but exactly where it matters is impossible to know.
I expected that when we crossed the $100 billion threshold in a week the market would throw up all over it, but it didn't. Now we've got the government trying to sell a quarter of a trillion dollars in debt over the next week, the announcement is out there, and while the bond market is selling off to a material degree equities could care less!
This is flat-out insane. At this run rate we would be trying to sell twelve trillion dollars over one year's time, an obviously ridiculous and impossible-to-peddle amount of debt at any price.
When does the rest of the world wake up (not to mention the primary dealers) and say "NO!"? Never? Is there a truly insatiable demand for our government's debt, despite the fact that President Obama got up on the national stage last night and promised to spend another trillion dollars we don't have?
How do equities power higher into this sort of debt issuance? Is it simply that the market has deduced that the government will hand all of this zero-interest money out - indefinitely?
Guess what - that which is impossible won't happen, and the stock market is now telling you that the impossible will become reality. There has been and will not be any amount of fiscal sanity on the part of our government until the market imposes it, and when it does it is going to happen in exactly the same way it happened to Bear Stearns, Lehman, Fannie and Freddie. May I remind readers that it was said that Fannie and Freddie "couldn't" get in trouble due to their implicit government guarantee? Well guess what - they both effectively failed, but when the US Government finds itself in the same situation it has nobody who can take it into conservatorship and as such we're just going to have to deal with the consequences of failed debt auctions - that is, dramatically increased funding costs across the board in the economy, including the government, which will choke off any hope of economic anything.
Folks, this is how you get detonation of a nation's monetary and political system. Timing the "event" it is not easy, but the certainty of outcome given this sort of outrageously irresponsible activity is not in doubt.
I'm increasing my stock of things that "will never go to zero" and keeping my ear to the ground. The "short the phone book but make sure you get out fast before you get trampled" moment approaches - mark my words.
==================================================================
Toch de moeite waard om dit even te volgen... Want dit is toch wel letterlijk begging om cash.Where cash = king.
Ik begrijp uberhaupt niet waarom deze junk nog wordt gekocht, de FED zal wel de grootste speler zijn om het yield nog enigsinds laag te houden
National Suicide: How Washington is Destroying the American Dream
Dat is niet veel hoor gezien dat de amerikaanse overheid en consumenten triljoenen dollars aan schulden/verplichtingen hebben.
Druk nog maar wat bij, goed voor de koers als ik binnenkort in de VS zit. Misschien dat ik het hele land dan gewoon kan kopen 
It is impossible to enjoy idling thoroughly unless one has plenty of work to do.
A man is rich in proportion to the number of things he can afford to let alone.
A man is rich in proportion to the number of things he can afford to let alone.
Men zal wel denken laten we maar veel verschillende leningen in de martk zetten en als we 10 - tot 25% verkopen kunnen we tevreden zijn.
Wel.... ik neem al een voorschot op de dollarkoers die is weer in beweging (going down dus).
Deja vu godverdomme....
Been here before.. been here forever
[ Bericht 44% gewijzigd door Drugshond op 24-07-2009 13:37:22 ]
Deja vu godverdomme....
Been here before.. been here forever
[ Bericht 44% gewijzigd door Drugshond op 24-07-2009 13:37:22 ]
250 miljard is een behoorlijke tektonische plaat die in beweging is (in 1 week tijd).quote:Op vrijdag 24 juli 2009 09:05 schreef Bijsmaak het volgende:
Dat is niet veel hoor gezien dat de amerikaanse overheid en consumenten triljoenen dollars aan schulden/verplichtingen hebben.
In dat opzicht ben ik ook nieuwsgierig naar China... die zijn voorbij de landmark van 2000 dollar aan valuta reserves. Waarvan ongeveer 700 miljard in US staatsobligaties.... en dan is 250 milj een banger.
Kan iemand me aub even het volgende uitleggen:
Als ik het goed begrijp koopt de FED een groot deel van de staatsobligaties op van de Amerikaanse overheid. Tevens is de FED in staat om ongelimiteerd geld te creëren.
Waarom doet de FED überhaupt al die moeite nog om obligaties op te kopen, als ze het geld ook gewoon direct kunnen creëren en bij de Amerikaanse overheid op de rekening kunnen storten? Waarom de staatsschuld en rentelasten van de Amerikaanse overheid vergroten, als dat eigenlijk helemaal niet hoeft? Wat zou er eigenlijk kunnen gebeuren als de FED dit geld gewoon gratis direct aan de overheid en/of de banken zou schenken?
Je zou als argument kunnen aanvoeren dat de dollar dan waardeloos zou worden, maar dat hoeft helemaal niet. Zolang het buitenland niet besluit om massaal dollars te dumpen, zal de dollarkoers in stand blijven. En het buitenland heeft daar helemaal geen belang bij, dus dat zal het ook niet doen.
Natuurlijk klinkt het bizar, gratis geld voor instellingen om lekker uit te geven, maar volgens mij moet dit kunnen. In beperkte mate uiteraard, om de verliezen door de crisis te compenseren, want mensen moeten wel de incentive houden om productief te blijven, om aan de slag te gaan en inkomen te genereren.
Maar hoogstwaarschijnlijk mis ik iets, want zo simpel kan het toch gewoon niet zijn? Wie helpt mij op weg naar de catch.
Als ik het goed begrijp koopt de FED een groot deel van de staatsobligaties op van de Amerikaanse overheid. Tevens is de FED in staat om ongelimiteerd geld te creëren.
Waarom doet de FED überhaupt al die moeite nog om obligaties op te kopen, als ze het geld ook gewoon direct kunnen creëren en bij de Amerikaanse overheid op de rekening kunnen storten? Waarom de staatsschuld en rentelasten van de Amerikaanse overheid vergroten, als dat eigenlijk helemaal niet hoeft? Wat zou er eigenlijk kunnen gebeuren als de FED dit geld gewoon gratis direct aan de overheid en/of de banken zou schenken?
Je zou als argument kunnen aanvoeren dat de dollar dan waardeloos zou worden, maar dat hoeft helemaal niet. Zolang het buitenland niet besluit om massaal dollars te dumpen, zal de dollarkoers in stand blijven. En het buitenland heeft daar helemaal geen belang bij, dus dat zal het ook niet doen.
Natuurlijk klinkt het bizar, gratis geld voor instellingen om lekker uit te geven, maar volgens mij moet dit kunnen. In beperkte mate uiteraard, om de verliezen door de crisis te compenseren, want mensen moeten wel de incentive houden om productief te blijven, om aan de slag te gaan en inkomen te genereren.
Maar hoogstwaarschijnlijk mis ik iets, want zo simpel kan het toch gewoon niet zijn? Wie helpt mij op weg naar de catch.
Omdat de FED er anders niks voor terug krijgt. Nu krijgt men er rente-betalende Treasuries voor.quote:Op vrijdag 24 juli 2009 14:16 schreef jkdjjsop het volgende:
Kan iemand me aub even het volgende uitleggen:
Als ik het goed begrijp koopt de FED een groot deel van de staatsobligaties op van de Amerikaanse overheid. Tevens is de FED in staat om ongelimiteerd geld te creëren.
Waarom doet de FED überhaupt al die moeite nog om obligaties op te kopen, als ze het geld ook gewoon direct kunnen creëren en bij de Amerikaanse overheid op de rekening kunnen storten? Waarom de staatsschuld en rentelasten van de Amerikaanse overheid vergroten, als dat eigenlijk helemaal niet hoeft? Wat zou er eigenlijk kunnen gebeuren als de FED dit geld gewoon gratis direct aan de overheid en/of de banken zou schenken?
Je zou als argument kunnen aanvoeren dat de dollar dan waardeloos zou worden, maar dat hoeft helemaal niet. Zolang het buitenland niet besluit om massaal dollars te dumpen, zal de dollarkoers in stand blijven. En het buitenland heeft daar helemaal geen belang bij, dus dat zal het ook niet doen.
Natuurlijk klinkt het bizar, gratis geld voor instellingen om lekker uit te geven, maar volgens mij moet dit kunnen. In beperkte mate uiteraard, om de verliezen door de crisis te compenseren, want mensen moeten wel de incentive houden om productief te blijven, om aan de slag te gaan en inkomen te genereren.
Maar hoogstwaarschijnlijk mis ik iets, want zo simpel kan het toch gewoon niet zijn? Wie helpt mij op weg naar de catch.
Lees Crash Course Chapter 8: The Fed - Money Creation voor wat meer info..
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
Slouches towards Bethlehem to be born?
Waarom zou de FED er iets voor terug moeten krijgen? Wat heeft de FED aan renteinkomsten als het nota bene zelf zoveel geld kan maken als het wil? Voor de FED zelf is geld compleet waardeloos.quote:Op vrijdag 24 juli 2009 15:19 schreef Perrin het volgende:
[..]
Omdat de FED er anders niks voor terug krijgt. Nu krijgt men er rente-betalende Treasuries voor.
Gelezen. Maar er staat niet in waarom de FED per se rente zou moeten hebben voor het geld dat het uit het niets creëert en uitleent.quote:Lees Crash Course Chapter 8: The Fed - Money Creation voor wat meer info..
Overigens best een interessant stukje verder, maar imho staan er ook een aantal onbewezen cliché's en feitelijke onjuistheden in.
Je moet het zo zien, de FED leent het geld aan de treasury ( zeg maar wouter bos) Vervolgens schrijft de Treasury een lening / obligatie uit tbv staatsschuld en daar kan zeg maar op geboden worden, De FED biedt hierin mee om een zo laag mogelijk yield>rente percentage te krijgen om zo de lange termijnsrente te drukken. Vele financiele leningen e.d. zijn van dit percentage afhankelijk, hoge rente is niet investeren dus economie op zijn gat. Het yield/rente wordt steeds hoger omdat staatsobligatie houders het niet meer vertrouwen dat VS uberhaupt de leningen terug betaald. Als de FED alles opkoopt dan komt er een enorme hoeveelheid geld de markt in en dit zal uit eindelijk lijden tot hyperinflatie en de val van de dollar.quote:Op vrijdag 24 juli 2009 16:58 schreef jkdjjsop het volgende:
[..]
Waarom zou de FED er iets voor terug moeten krijgen? Wat heeft de FED aan renteinkomsten als het nota bene zelf zoveel geld kan maken als het wil? Voor de FED zelf is geld compleet waardeloos.
[..]
Gelezen. Maar er staat niet in waarom de FED per se rente zou moeten hebben voor het geld dat het uit het niets creëert en uitleent.
Overigens best een interessant stukje verder, maar imho staan er ook een aantal onbewezen cliché's en feitelijke onjuistheden in.
National Suicide: How Washington is Destroying the American Dream
Ook de FED moet zich aan een soort balans houden.quote:Op vrijdag 24 juli 2009 16:58 schreef jkdjjsop het volgende:
[..]
Waarom zou de FED er iets voor terug moeten krijgen? Wat heeft de FED aan renteinkomsten als het nota bene zelf zoveel geld kan maken als het wil? Voor de FED zelf is geld compleet waardeloos.
[..]
Federal Reserve balance sheet
quote:And how did your bank come to have those deposits with the Fed? These deposits are something the Fed has the power to create out of thin air. This indeed is its primary power-- the ability to create money. That's a power that could be easily abused, so our system is set up to prevent the Fed from creating deposits willy-nilly. Specifically, the traditional operation of the Federal Reserve was to purchase assets such as Treasury securities from a private dealer, paying for them by simply crediting the dealer's account with the Fed with new deposits. The Fed hasn't created any wealth with this transaction, it has simply introduced a new asset (ultimately, money) and retired an old (the Treasuries that were formerly held by a member of the public are now held by the Fed).
Although private sector wealth is unchanged as a result of this transaction, there is one important implication for the Treasury. Before the Fed made this open-market purchase, the Treasury was obligated to pay interest on those securities to someone in the private sector. Now as a result of the open-market purchase, the Treasury is making that payment to the Fed. The Fed in turn returns those payments back to the Treasury. You can see those payments from the Fed back to the Treasury each month in Table 4 of the Monthly Treasury Statement.
But wouldn't the Treasury want the Fed to simply buy up all of its outstanding debt, and relieve the taxpayers forever of that nasty burden? It might, but to do so would require so much new money creation that it would cause a horrific inflation. To avoid that, we have a careful separation of powers, asking the Fed to take responsibility for inflation and letting the Treasury worry about how to pay its bills.
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
Slouches towards Bethlehem to be born?
Tot zover volg ik je nog, grotendeels.quote:Op vrijdag 24 juli 2009 17:24 schreef edwinh het volgende:
[..]
Je moet het zo zien, de FED leent het geld aan de treasury ( zeg maar wouter bos) Vervolgens schrijft de Treasury een lening / obligatie uit tbv staatsschuld en daar kan zeg maar op geboden worden, De FED biedt hierin mee om een zo laag mogelijk yield>rente percentage te krijgen om zo de lange termijnsrente te drukken. Vele financiele leningen e.d. zijn van dit percentage afhankelijk, hoge rente is niet investeren dus economie op zijn gat. Het yield/rente wordt steeds hoger omdat staatsobligatie houders het niet meer vertrouwen dat VS uberhaupt de leningen terug betaald.
Dat hangt er maar net vanaf hoeveel de FED opkoopt.quote:Als de FED alles opkoopt dan komt er een enorme hoeveelheid geld de markt in
De FED moet natuurlijk niet alles opkopen. In elk geval niet meer dan het bedrag dat er de afgelopen jaren door de crisis is verdampt en alleen maar van bepaalde partijen. Zolang het zich daar aan houdt zie ik echt het probleem niet. Het geld was er eerst, toen verdween het, en nu is het weer terug. En kunnen we weer verder met waar we gebleven waren, weliswaar op een iets langzamere, voorzichtigere voet.
Mja, dat wordt steeds beweerd en het klinkt ook best wel logisch, maar ik heb daar dus m'n twijfels bij.quote:en dit zal uit eindelijk lijden tot hyperinflatie en de val van de dollar.
Nogmaals: een hoge inflatie ontstaat niet zomaar, dat kan alleen als de vraag steeds meer toeneemt doordat er teveel geld bij de consumenten terecht komt. Of doordat de resources op zijn en het aanbod van produkten in rap tempo afneemt.
Hyperinflatie is helemaal een verhaal apart. Dat ontstaat meestal door een combinatie van oorzaken, waaronder oorzaken van buitenaf.
Wat een interessant stukje! Met name de tweede alinea:quote:Op vrijdag 24 juli 2009 17:27 schreef Perrin het volgende:
[..]
Ook de FED moet zich aan een soort balans houden.
Federal Reserve balance sheet
[..]
Als ik het goed lees, dan vloeien dus alle renteinkomsten die de FED ontvangt van (o.a.?) de Treasury weer regelrecht terug naar diezelfde Treasury! Per saldo betaalt de Treasury dus helemaal geen rente aan de FED! M.a.w., in feite doet de FED eigenlijk al precies wat ik hierboven schrijf: het verstrekt (via een omweg) effectief renteloze leningen aan de Treasury (dus aan de overheid).quote:Although private sector wealth is unchanged as a result of this transaction, there is one important implication for the Treasury. Before the Fed made this open-market purchase, the Treasury was obligated to pay interest on those securities to someone in the private sector. Now as a result of the open-market purchase, the Treasury is making that payment to the Fed. The Fed in turn returns those payments back to the Treasury. You can see those payments from the Fed back to the Treasury each month in Table 4 of the Monthly Treasury Statement.
Het is dus een kwestie van op tijd dit geld weer terugtrekken als de geldhoeveelheid te groot dreigt te worden, er te veel geld bij de bedrijven en consumenten terecht komt en de inflatie uit de hand dreigt te lopen. Maar dat hoeft toch niet zo moeilijk te zijn? Waarschijnlijk kan de FED dit wel op de één of andere manier afdwingen.
Yep.. weer bonds/Treasuries verkopen of de verplichte bankreserves omhoog bijstellen bijvoorbeeld.quote:Op vrijdag 24 juli 2009 18:42 schreef jkdjjsop het volgende:
Waarschijnlijk kan de FED dit wel op de één of andere manier afdwingen.
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
Slouches towards Bethlehem to be born?
Interessant! Op die manier kan de FED dus de overheid dwingen om te bezuinigen en schulden in te lossen! Immers, als het de betreffende treasuries weer verkoopt aan een derde partij, vloeien de rentelasten niet meer automatisch terug in de staatskas en zal de last van de staatsschuld zwaarder om de nek van de overheid komen te hangen. Die overheid zal dit weer moeten compenseren door te bezuinigen en/of meer belasting te heffen. Dit geeft de FED weer een indirecte manier om de geldhoeveelheid te verkleinen, naast het renteinstrument.quote:Op vrijdag 24 juli 2009 19:09 schreef Perrin het volgende:
[..]
Yep.. weer bonds/Treasuries verkopen of de verplichte bankreserves omhoog bijstellen bijvoorbeeld.
Maar goed, als ik dus alles even bij elkaar optel, zie ik dus geen enkel onoverkomelijk probleem bij het opkopen van staatsobligaties door de FED, mits men ze maar weer op tijd verkoopt. 'Op tijd' als in wanneer de financiële instellingen uit de shit zijn en de economie weer aantrekt, maar dat kan nog wel even duren. Het is dus maar zeer de vraag in hoeverre alle geschetste doemscenario's, met name de val van de dollar, realiteit zullen worden. Er zal dan toch nog iets extra's moeten gebeuren, bijvoorbeeld een oorlog met een buurland of een nucleaire aanslag, om maar even iets te noemen.
Overigens ben ik het met jullie eens dat e.e.a. werkelijk te bizar voor woorden is, en de bedragen bijna onvoorstelbaar, maar dat betekent nog niet dat het niet zou kunnen werken.
Blijft idd spannend wat de hogepriesters van 't geld uitspokenquote:Op vrijdag 24 juli 2009 20:17 schreef jkdjjsop het volgende:
Overigens ben ik het met jullie eens dat e.e.a. werkelijk te bizar voor woorden is, en de bedragen bijna onvoorstelbaar, maar dat betekent nog niet dat het niet zou kunnen werken.
Best taaie materie, maar naar mijn mening razend interessant.
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
Slouches towards Bethlehem to be born?
Inderdaad. En met de nadruk op zou kunnen heh, in mijn vorige post, want ook ik moet het allemaal nog zien. Maar ik probeer wel kritisch te blijven, zowel t.ov. degenen die de ellende hebben veroorzaakt, als tegenover de doemscenario's.quote:Op vrijdag 24 juli 2009 20:48 schreef Perrin het volgende:
[..]
Blijft idd spannend wat de hogepriesters van 't geld uitspoken
Om even terug te komen op mijn originele vraag:
Het antwoord hierop zou dus volgens het bovenstaande luiden: omdat de FED op deze manier de obligaties weer kan verkopen aan derde partijen, waarmee het een krachtig instrument in handen heeft om de geldhoeveelheid te sturen.quote:Op vrijdag 24 juli 2009 14:16 schreef jkdjjsop het volgende:
Waarom doet de FED überhaupt al die moeite nog om obligaties op te kopen, als ze het geld ook gewoon direct kunnen creëren en bij de Amerikaanse overheid op de rekening kunnen storten?
Samen komen we er wel uit.
Here it comes.
US 5yr Bond Auction Effectively FAILS
That's right, FAILS.
No, you didn't hear it reported this way and won't, but that's the math.
Here you have the results:
And here's the math:
1.923 BTC X 61.59% Primary Dealer bid = 1.18 BTC (PD), greater than 1.0. Or to put it a different way, but for the primary dealers the bid-to-cover was less than one, meaning that some of the issue would have been left on the table.
Thats a fail; but for the primary dealers the issue would not have subscribed.
Primary dealers are required to bid. That's the deal in exchange for their being named as "primary dealers." For this reason short of thermonuclear war you will never see an actual (BTC < 1.0) "fail" on a US Treasury Auction - Treasury has rigged the process so as to insure that cannot be reported.
Therefore, the question is this: Less the primary dealer "bid" (forced by agreement) was there sufficient interest to subscribe the issue, and the answer is NO.
Those who think this is "no big deal" need to have their head examined. In general any BTC under 2.0 indicates a serious problem, and the perverse nature of the primary dealer system is the reason.
The United States' Credit Card (issued by China and Japan) is being slowly cut off. That the stock market "recovered" after this ridiculously bad auction (bow-wow is the best way to describe it) speaks to the vacuum between the ears of both the cheerleaders in the mainstream media and those in the equity markets.
There is only one other time in recent memory that we've had a bond market auction fail like this. You might want to go have a look at your charts - with dates - for what followed shortly thereafter.
They're going to try to sell 7yrs tomorrow, and then the real fun begins with the quarterly refunding.
That ought to be a real riot.
President Obama, you might want to have a chat with Bill Clinton about the Bond Market and Hillarycare, lest you wind up learning this lesson the hard way.
========================================================
Treasuries Decline Before $28 Billion Seven-Year Note Auction
By Gavin Finch and Theresa Barraclough
July 30 (Bloomberg) -- Treasuries fell, with the yield on the seven-year note approaching the highest level in more than a month before a $28 billion sale of the securities, as stock gains damped demand for the relative safety of government debt.
Ten- and 30-year debt led declines as the MSCI World Index rose for the first time in three days. Today’s auction is the last of four debt offerings this week, totaling $115 billion. Sales in the past two days drew higher yields than expected, signaling demand is waning for the record amount of debt the U.S. is selling this year.
“This week’s auctions have been pretty disappointing,” said Peter Mueller, a fixed-income strategist at Commerzbank AG in Frankfurt. “Bonds will take their direction from what is going on in the equity markets in the coming days. Risk sentiment is still all-important.”
The yield on the seven-year note rose 4 basis points to 3.33 percent as of 10 a.m. in London, according to BGCantor Market Data. The 3.25 percent security due June 2016 fell 7/32, or $2.19 per $1,000 face amount, to 99 15/32.
The two-year yield increased 2 basis points to 1.19 percent after rising to 1.22 percent yesterday, the highest since June 19. The price of the note has fallen for four days, the longest losing streak since the period ended May 27.
The MSCI World Index of shares gained 0.4 percent. U.S. stock index futures also advanced.
The Treasury sold $39 billion of five-year securities yesterday, $42 billion of two-year debt on July 28 and $6 billion of 20-year Treasury Inflation Protected Securities on July 27.
U.S. Binge
The result of the auctions this week “sparked fears that the U.S. binge was finally wearing out investors,” Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., part of the world’s largest interbank broker, wrote in a research note today.
Indirect bidders bought 36.7 percent of the five-year notes sold yesterday, down from 62.8 percent at the June sale, which was the highest since December 2004. The same class of investors purchased 33 percent of the two-year notes offered this week, compared with 68.7 percent in the previous auction in June.
“For the second successive session, the Treasury market was knocked violently out of its stride by a weak auction, with low indirect bids,” said John Wraith, head of sterling-rate product development at RBC Capital Markets in London.
The securities scheduled for sale today yielded 3.33 percent in pre-auction trading, the same as the rate at the previous sale of the maturity on June 25.
Record Sales
The U.S. raised $1.02 trillion this year selling Treasuries, government data show. In its next round of auctions, the U.S. will sell three-, 10- and 30-year securities on three consecutive days beginning Aug. 11.
Goldman Sachs Group Inc. predicts the U.S. will sell about $2.9 trillion of debt in the two years ending September 2010, cutting its estimate for Treasury auctions by 28 percent, as the economy improves.
Treasuries trimmed losses as the Federal Reserve prepared to buy notes maturing from May 2012 to November 2013 today.
Longer-maturity debt gained yesterday as the Fed purchased $2.999 billion of Treasuries maturing between February 2021 and February 2026 as part of its plan to cap borrowing costs. The central bank has bought $222.719 billion in Treasuries since its purchases began on March 25.
‘Extremely Attractive’
Treasury two-year notes may rise because policy makers are likely to leave interest rates unchanged for a prolonged period, according to Daiwa Securities SMBC Co., a unit of Japan’s second-largest brokerage.
“Two-year yields are extremely attractive as we cannot expect a rate hike,” said Yasutoshi Nagai, Tokyo-based chief economist at Daiwa Securities. “The yield is too high.”
Two-year yields are 92 basis points above the upper range of the Fed interest rate, the widest spread in more than a month, according to data compiled by Bloomberg. That spread may narrow to 65 basis points, Nagai said. His prediction is higher than forecasts in a Bloomberg survey of economists, who say the difference will narrow to 84 basis points by Sept. 30.
Federal-funds futures contracts on the Chicago Board of Trade show a 58 percent chance policy makers will leave borrowing costs unchanged by year-end. The odds were 53 percent a month earlier.
Investors should favor debt and stocks of “strong” companies because U.S. economic growth will be closer to 3 percent than the range of 5 percent to 7 percent for the past 15 years, said Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co.
‘Investment Potion’
“There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields,” Gross wrote in his August investment outlook on Pimco’s Web site.
U.S. corporate bonds rated A to AAA by Standard & Poor’s returned 7.3 percent this year, according to indexes compiled by Merrill Lynch & Co., as the economy improved and investors sought higher yields than those offered by government debt. Merrill’s U.S. Treasury Master Index posted a 4.9 percent loss.
Yields suggest the Fed’s efforts to keep borrowing costs low are meeting some success.
The London interbank offered rate, or Libor, that banks say they charge each other to borrow in dollars for three months, declined less than a basis point to 0.49 percent yesterday, staying below 0.50 percent for a third day, the British Bankers’ Association said.
US 5yr Bond Auction Effectively FAILS
That's right, FAILS.
No, you didn't hear it reported this way and won't, but that's the math.
Here you have the results:
And here's the math:
1.923 BTC X 61.59% Primary Dealer bid = 1.18 BTC (PD), greater than 1.0. Or to put it a different way, but for the primary dealers the bid-to-cover was less than one, meaning that some of the issue would have been left on the table.
Thats a fail; but for the primary dealers the issue would not have subscribed.
Primary dealers are required to bid. That's the deal in exchange for their being named as "primary dealers." For this reason short of thermonuclear war you will never see an actual (BTC < 1.0) "fail" on a US Treasury Auction - Treasury has rigged the process so as to insure that cannot be reported.
Therefore, the question is this: Less the primary dealer "bid" (forced by agreement) was there sufficient interest to subscribe the issue, and the answer is NO.
Those who think this is "no big deal" need to have their head examined. In general any BTC under 2.0 indicates a serious problem, and the perverse nature of the primary dealer system is the reason.
The United States' Credit Card (issued by China and Japan) is being slowly cut off. That the stock market "recovered" after this ridiculously bad auction (bow-wow is the best way to describe it) speaks to the vacuum between the ears of both the cheerleaders in the mainstream media and those in the equity markets.
There is only one other time in recent memory that we've had a bond market auction fail like this. You might want to go have a look at your charts - with dates - for what followed shortly thereafter.
They're going to try to sell 7yrs tomorrow, and then the real fun begins with the quarterly refunding.
That ought to be a real riot.
President Obama, you might want to have a chat with Bill Clinton about the Bond Market and Hillarycare, lest you wind up learning this lesson the hard way.
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Treasuries Decline Before $28 Billion Seven-Year Note Auction
By Gavin Finch and Theresa Barraclough
July 30 (Bloomberg) -- Treasuries fell, with the yield on the seven-year note approaching the highest level in more than a month before a $28 billion sale of the securities, as stock gains damped demand for the relative safety of government debt.
Ten- and 30-year debt led declines as the MSCI World Index rose for the first time in three days. Today’s auction is the last of four debt offerings this week, totaling $115 billion. Sales in the past two days drew higher yields than expected, signaling demand is waning for the record amount of debt the U.S. is selling this year.
“This week’s auctions have been pretty disappointing,” said Peter Mueller, a fixed-income strategist at Commerzbank AG in Frankfurt. “Bonds will take their direction from what is going on in the equity markets in the coming days. Risk sentiment is still all-important.”
The yield on the seven-year note rose 4 basis points to 3.33 percent as of 10 a.m. in London, according to BGCantor Market Data. The 3.25 percent security due June 2016 fell 7/32, or $2.19 per $1,000 face amount, to 99 15/32.
The two-year yield increased 2 basis points to 1.19 percent after rising to 1.22 percent yesterday, the highest since June 19. The price of the note has fallen for four days, the longest losing streak since the period ended May 27.
The MSCI World Index of shares gained 0.4 percent. U.S. stock index futures also advanced.
The Treasury sold $39 billion of five-year securities yesterday, $42 billion of two-year debt on July 28 and $6 billion of 20-year Treasury Inflation Protected Securities on July 27.
U.S. Binge
The result of the auctions this week “sparked fears that the U.S. binge was finally wearing out investors,” Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., part of the world’s largest interbank broker, wrote in a research note today.
Indirect bidders bought 36.7 percent of the five-year notes sold yesterday, down from 62.8 percent at the June sale, which was the highest since December 2004. The same class of investors purchased 33 percent of the two-year notes offered this week, compared with 68.7 percent in the previous auction in June.
“For the second successive session, the Treasury market was knocked violently out of its stride by a weak auction, with low indirect bids,” said John Wraith, head of sterling-rate product development at RBC Capital Markets in London.
The securities scheduled for sale today yielded 3.33 percent in pre-auction trading, the same as the rate at the previous sale of the maturity on June 25.
Record Sales
The U.S. raised $1.02 trillion this year selling Treasuries, government data show. In its next round of auctions, the U.S. will sell three-, 10- and 30-year securities on three consecutive days beginning Aug. 11.
Goldman Sachs Group Inc. predicts the U.S. will sell about $2.9 trillion of debt in the two years ending September 2010, cutting its estimate for Treasury auctions by 28 percent, as the economy improves.
Treasuries trimmed losses as the Federal Reserve prepared to buy notes maturing from May 2012 to November 2013 today.
Longer-maturity debt gained yesterday as the Fed purchased $2.999 billion of Treasuries maturing between February 2021 and February 2026 as part of its plan to cap borrowing costs. The central bank has bought $222.719 billion in Treasuries since its purchases began on March 25.
‘Extremely Attractive’
Treasury two-year notes may rise because policy makers are likely to leave interest rates unchanged for a prolonged period, according to Daiwa Securities SMBC Co., a unit of Japan’s second-largest brokerage.
“Two-year yields are extremely attractive as we cannot expect a rate hike,” said Yasutoshi Nagai, Tokyo-based chief economist at Daiwa Securities. “The yield is too high.”
Two-year yields are 92 basis points above the upper range of the Fed interest rate, the widest spread in more than a month, according to data compiled by Bloomberg. That spread may narrow to 65 basis points, Nagai said. His prediction is higher than forecasts in a Bloomberg survey of economists, who say the difference will narrow to 84 basis points by Sept. 30.
Federal-funds futures contracts on the Chicago Board of Trade show a 58 percent chance policy makers will leave borrowing costs unchanged by year-end. The odds were 53 percent a month earlier.
Investors should favor debt and stocks of “strong” companies because U.S. economic growth will be closer to 3 percent than the range of 5 percent to 7 percent for the past 15 years, said Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co.
‘Investment Potion’
“There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields,” Gross wrote in his August investment outlook on Pimco’s Web site.
U.S. corporate bonds rated A to AAA by Standard & Poor’s returned 7.3 percent this year, according to indexes compiled by Merrill Lynch & Co., as the economy improved and investors sought higher yields than those offered by government debt. Merrill’s U.S. Treasury Master Index posted a 4.9 percent loss.
Yields suggest the Fed’s efforts to keep borrowing costs low are meeting some success.
The London interbank offered rate, or Libor, that banks say they charge each other to borrow in dollars for three months, declined less than a basis point to 0.49 percent yesterday, staying below 0.50 percent for a third day, the British Bankers’ Association said.
An unprecedented bond auction in the United States may also weigh on the single currency. The US Treasury’s announced last week that it will sell a record $115 billion in bonds next week in a bid to help finance the rapidly growing public deficit, pushing 10-year notes to register the largest daily loss in nearly seven weeks and sending yields to the highest level in a month. We have argued for some time that the US Dollar will benefit as the government floods the market with new debt: Treasury prices will head sharply lower, putting tremendous upward pressure on the long-term interest rates. This will make USD-denominated assets attractive to yield-seeking investors, driving demand for the greenback. Because the Euro is the second-most traded currency after the greenback, it often serves as the de-facto anti-Dollar, with short term studies showing a hefty -85.8% correlation between average indexes of the two units’ values. This means that any meaningful turn in sentiment in favor of the US Dollar will weigh heavily on the Euro, not just in the pairing against the greenback but across the board.
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TOKYO, July 30 (Reuters) - U.S. Treasuries edged lower in Asia on Thursday as investors stayed cautious ahead of a seven-year debt sale, after a second poor auction this week heightened supply concerns.
* The weak bidding for a record $39 billion five-year note sale on Wednesday followed a meagre investor showing at Tuesday's $42 billion two-year debt sale. The disappointing results raised worries about the prospects for a record $28 billion seven-year note auction on Thursday.
* "Weak demand for U.S. government debt so far this week revived concerns over investor appetite, especially that of foreign investors," said a strategist for Japanese securities firm. But he also said the poor auction results did not drag down the overall market significantly since investors have priced in the possibility of waning appetite from outside the U.S. to some extent.
=========================================================================
TOKYO, July 30 (Reuters) - U.S. Treasuries edged lower in Asia on Thursday as investors stayed cautious ahead of a seven-year debt sale, after a second poor auction this week heightened supply concerns.
* The weak bidding for a record $39 billion five-year note sale on Wednesday followed a meagre investor showing at Tuesday's $42 billion two-year debt sale. The disappointing results raised worries about the prospects for a record $28 billion seven-year note auction on Thursday.
* "Weak demand for U.S. government debt so far this week revived concerns over investor appetite, especially that of foreign investors," said a strategist for Japanese securities firm. But he also said the poor auction results did not drag down the overall market significantly since investors have priced in the possibility of waning appetite from outside the U.S. to some extent.
Och, ik heb toch al wat goud gekocht. Jaren geleden al. Fysiek, zodat het niet kan "failen" of weet ik veel nog meer wat voor flauwekul ze verzinnen om je geld af te pakken.
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