Wednesday, June 10, 2009

10-Year Auction Results

Quick Update!

Sale complete at a high yield of 3.99%!

Bid to cover was 2.62 which is nothing to write home about.

Market has been steadily selling off since the auction. DOW is now down about 70.

TNX(10 year) is soaring today. Now trading at 3.98%.

Rates are rising. Housing is in deep trouble.

More later.


flipdippy said...

holy chit TNX just broke over 4%

Jeff said...

I know!!

The bond market realizes there is so much more paper that needs to be sold this year.


Housing is beyond screwed.

Steve said...

Is 4% still pretty low? Looking at the history, 5% or higher seems to be more of a norm:^TNX&t=my&l=on&z=m&q=l&c=

flipdippy said...


Yeah, rates are still pretty low. But we rely on artificially low rates to buy crap. Everyone from the individual US household to corporations to the US government needs the easy credit.

Toss in higher energy and commodity prices and you got yourself a stew!

Pick your market to see the the f is GM or Toyota or BMW going to sell more cars with higher auto loan rates when they're presently struggling to sell them with 0% loans with record incentives?

Same for housing, credit cards, commercial real estate, corporate bonds, and on and on and on.

Jeff said...




Obama's national refi program also blows up in the process.


You make a good point in terms of rates but people can't afford the house they paid for at these historically low rates.

75% of the loan modifications got foreclosed on a second time.

People simply can't afford these debt payments. As rates rise it just exacerbates the problem.

The whole economy will blow up if housing blows up and it will if lending rates rise to 6-7%

CT-Hilltopper said...

Hi Jeff!

It isn't just housing.

Do you realize how many businesses have variable rate debt, just like an adjustable rate mortgage, to take advantage of those ultra low interest rates?

Ford comes to mind. Citigroup. GM. GE. Wells Fargo. I'm sure there are many, many, others.

That's how all of the auto industries were able to offer all of those teaser loans and zero percent financing. Think of other businesses that do that and I think you can pretty much come up with a list of corporations and businesses that are screwed if the interest rates go through the roof.

Housing isn't the only thing to be concerned about here.

Jeff said...


Great points.

The whole economy leveraged up with debt.

Lets not forget the states that did the same thing and gave firemen 200k salaries.

California is 50 days from a financial meltdown according to the press.


I just want to put my head in the sand!