View Full Version : It's official: US debt is getting harder to sell

09-10-2010, 03:33 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">This week's government debt sale ended on a sour note, with investors unfriendly toward a sale of long bonds.

The $13 billion sale of 30-year bonds fetched a high yield of 3.82 percent, 0.042 percentage points above the "when issued" expectations. Bidders put up 2.73 times the amount bid, a measure known as the bid-to-cover ratio.

Foreign demand also was soft, with indirect bidders making up just 36 percent of total buyers.

The auction brought to an end sales of $67 billion in coupon-bearing supply.

Treasurys added to losses following the auction, with the 30-year falling a point and a half in price to yield 3.82 percent, above the Wednesday yield of 3.73 percent. The benchmark 10-year note was off 20/32 for a 2.73 percent yield, against Wednesday's 2.66 percent. </div></div>

A national security threat worsens. (http://www.cnbc.com/id/39075951)


09-10-2010, 05:58 AM
It's not just us. Nobody wants any government bonds right now. People freaked out this week because they it came out that in the Euro bank stress test banks did not fully disclose how much government debt they were holding on their books. It used to be that default risk on government bonds was not even considered in an evaluation. That is not the case any more even for US bonds especially with Obama in office. The world has already witnessed him tell bond holders "screw you, you ain't getting your money back" before. People don't forget about something like that.

Or maybe they do. They seem to have forgotten that ACORN was defunded.

09-11-2010, 03:34 AM
Yes ... the way people were treated in the GM debacle, just so the unions which backed Obama could be bailed out, was a low water mark in US justice.


09-11-2010, 04:07 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> The world has already witnessed him tell bond holders "screw you, you ain't getting your money back" before. </div></div>

I must have missed that. Any links?


09-11-2010, 04:16 AM
You missed this in your post. It gives an explanation.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">U.S. government debt prices slipped earlier after data showed trade activity and labor conditions<u> were not as dismal as some traders had feared, </u><span style='font-size: 17pt'>reducing the safehaven demand for bonds. </span></div></div>

The drop in demand was a result of the economy doing better, not worse as you seem to be claiming!


09-11-2010, 04:17 AM
Not that you will read it, but HERE (http://online.wsj.com/article/SB124105303238271343.html) it is. Again.