Can someone explain todays treasury auctions?

[lxlxlxl]

Who bids on these treasuries, and how often does this happen?

[Phred42]

1. The Fed bought because China refused to

[upi402]

2. this is a bad thing

me thinks...
vewyvewy bad

and the positive indicators on tv must need some flushing out, like turds. housing for example, new house sales up but on a 12 year low.

[lxlxlxl]

4. i dont follow...

if you want to clarify fine, but...dont think thats what happened.

[notesdev]

5. He's correct

The Fed can 'buy' the treasuries, and appears to have been forced to do so in this last bond auction due to a lack of bidders.

Once taken for granted, the world is now questioning our credit rating, and we are being found wanting.

A bond market dislocation will have profound effects.

[lxlxlxl]

6. thanks...

i wanted to get an answer about the actual auction process, plus any indicators about how odd or normal this weeks auction was. sorry if i wasnt clear enough...cheers.

[notesdev]

7. Here's more

Enjoy

http://market-ticker.org/archives/899-Bond-Market-To-Bernanke-and-Obama-Fk-You.html

[A HERETIC I AM]

8. If you read this article, you may get the answers you seek...

http://www.bloomberg.com/apps/news?pid=20601087&sid=aocDL4ObTIt8&refer=home

[JohnWxy]

3. Most of the securities are bought by primary dealers which are large securities dealers; a small

amount is purchased by individual investors.

Certified checks, or bank checks are required to purchase Treasury bills; personal and endorsed Treasury checks are accepted in payment for long term securities such as notes.

The amount of securities that may be sold to a single non- competitive bidder is limited to $1 million per auction for bills and $5 million for coupon issues.

OF course, the ultimate buyers of U.S. Treasuries include Governments, banks, hedge funds, mutual funds, individual investors.__JW


http://www.reuters.com/article/bondsNews/idUSN2649299120090326
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NEW YORK, March 26 (Reuters) - An auction of seven-year Treasury notes on Thursday was met with near average demand, soothing some investor worries of a repeat of the scant demand in U.S. and UK debt auctions on Wednesday.

Both U.S. Treasury debt prices and stocks extended gains immediately after the auction of $24 billion of notes. (a gain in Treasury note prices mean investors were willing to take a lesser rate of return than the Treasury is offering on the face of the note.__JW)

~~
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The seven-year note sale on Thursday had a bid-to-cover ratio, which is a measure of demand, of 2.52, compared with a bid-to-cover ratio of 2.11 in an auction of $22 billion of notes last month.

Analysts said there was no "tail" in the auction, meaning the government was not forced to offer a higher yield to attract buyers
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THe reason the Federal Reserve is buying $300 billion of Treasuries over the next six months is to free up lending and lower longer-term interest rates such as mortgage rates.
.

..on edit. Note that the Government in buying back Treasuries now will be lowering it's financing costs since the debt it is buying back it is paying a higher interest rate than any debt it is issuing now.__JW



Auction schedule: http://www.treas.gov/offices/domestic-finance/debt-management/auctions/auctions.pdf#zoom=150,150,0



More about Treasury auctions done by the Federal REserve: http://www.newyorkfed.org/aboutthefed/fedpoint/fed41.html


Non-competitive tenders are generally submitted by small investors and individuals. All non-competitive bidders are guaranteed to receive securities; they need only complete an application form and make payment by mail anytime before the normal 12:00 p.m. Eastern Time auction deadline. Noncompetitive bids submitted by mail must be postmarked by the auction and received by the date of the security.

Certified checks, or bank checks are required to purchase Treasury bills; personal and endorsed Treasury checks are accepted in payment for long term securities such as notes. The amount of securities that may be sold to a single non- competitive bidder is limited to $1 million per auction for bills and $5 million for coupon issues.