Yesterday’s record 2-year Treasury Note auction went off fairly well. Today’s 5-year auction? Not so much. The Treasury tried to sell a record $39 billion of notes. Pre-auction talk was for the notes to sell at a yield of 2.635%. Instead, they went off at 2.689%, more than 5 basis points higher. The bid-to-cover ratio fell to 1.92 from 2.58 at the last auction. In fact, that was the worst since September 2008. Indirect bidders took down just 36.7% of the notes sold, down from 62.8% and the lowest since April. Bond futures dropped sharply on the news from pre-auction trade around 116 24/32 to as low as 115 16/32.
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What will happen to banks if interest rates rise and judges are given power to setset terms of mortgages? Frank is warning banks to redo more loans are they will give judges power to rewrite mortgages in bankruptcy.
Mr. Ben Bernanke is a great man.
He can print money and also he can vacuum his printed money.
Bravo!