There is little if anything one can say about today's 5 Year auction. It priced at 1.055%, just above the record low 1.015% in September, and well inside the WI 5 Year trading at 1.08%, at a solid 2.90 Bid To Cover, compared to the 2.82 six auction average. The internals were boring, with Indirects taking down 49.3% of the auction, compared to the 40.5% LTM average, Directs declined modestly to 10.4% (in line with the 11.2% average), and Dealer take down unchanged from September at 40.3%. However, one massively notable thing about this auction is that it is the last one, probably ever, in which the US debt/GDP ratio is still under 100% following the auction. Adding today's $35 billion to yesterday's $35 billion in Two year bonds, brings total US debt to $15.010 trillion, with GDP still at $15.013 trillion (granted this number may be revised tomorrow), resulting in a debt to GDP ratio of 99.99%. Tomorrow's historical $29 billion in 7 Year bonds will take America into that uncharted territory of triple digit debt to GDP. But yes, the formal settlement of all bonds will not occur until Halloween, so we can celebrate on several days America's historic transition one step closer to insolvency.
Fresh from the European Council presses comes the complete 3 whopping page statement to bailout the Eurozone (not to be confused with Hank Paulson's 3 page TARP termsheet). There is nothing at all here, but for those who need a paperweight, feel free to print 200 copies and staple them together or something.
Submitted by Tyler Durden on 10/26/2011 - 15:12 China Fail Lehman Europe is playing havoc with this old trading strategy. By only having rumors and never having news they keep the markets in permanent buy the rumor mode. The china story is at best old news. Italy's austerity credibility is sorely lacking, but the best news is the Merkozy wants to meet the bankers. It feels like aliens landing on a planet and saying take me to your leaders. Seems like we are long past short covering and this is people getting long on rumors and plans. Everything I read tells me they are trying but that there are no solutions that are sure to work and some will ruin the entire system if they are tried and fail.
- EU-27 RELEASES STATEMENT AFTER BRUSSELS SUMMIT
- EU-27 SAYS COMMISSION MUST URGENTLY EXPLORE BANK GUARANTEES
- EU SAYS BANKS SHOULD FIRST FIND PRIVATE SOURCES TO RAISE FUNDS
- EU SAYS STATE AID RULES ON BANKS SHOULD BE PROPORTIONAL
- EU SAYS MID-TERM BANK FUNDING MUST HEAD OFF CREDIT CRUNCH RISK
To anyone who still has the energy to be lied to over and over by a bunch of corrupt, broke, pathologically lying bureucrats, feel free to tune in.
- EURO ZONE PLANS TO LEVERAGE EFSF BAILOUT FUND "SEVERAL FOLD", FINANCE MINISTERS TO DECIDE DETAILS IN NOVEMBER -- DRAFT EURO ZONE SUMMIT STATEMENT
- DRAFT EURO ZONE STATEMENT MAKES NO MENTION AT THIS STAGE OF ITALY'S REQUIRED BUDGET STEPS
- NO AMOUNTS SET FOR BANK RECAPITALIZATIONS
For those who don't expect something for nothing...
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