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davidcameron

5 Year Gilt Auction - Total Success

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The UK DMO today raised £5,000m by auctioning 5 year gilts. The auction was a complete success with a bid to cover ratio of 2.6x, and a tail of 0.9bp. Afterwards, everyone carried on with their lives as normal.

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The UK DMO today raised £5,000m by auctioning 5 year gilts. The auction was a complete success with a bid to cover ratio of 2.6x, and a tail of 0.9bp. Afterwards, everyone carried on with their lives as normal.

Seems to me that some people then ran around making alot of noise.

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The UK DMO today raised £5,000m by auctioning 5 year gilts. The auction was a complete success with a bid to cover ratio of 2.6x, and a tail of 0.9bp. Afterwards, everyone carried on with their lives as normal.

what you mean they print the money, lend it to themselves & buy their own debt.

& this plan worked you say.

edited - the FED also do this. I can't see a downside.....can you ?

on this basis, I have decided to adopt their cunning plan. I have decided to work for myself, producing nothing and selling it to myself at a profit.

Edited by grumpy-old-man-returns

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what you mean they print the money, lend it to themselves & buy their own debt.

& this plan worked you say.

edited - the FED also do this. I can't see a downside.....can you ?

on this basis, I have decided to adopt their cunning plan. I have decided to work for myself, producing nothing and selling it to myself at a profit.

It clearly worked in terms of "raising" £5 billion quid! Consequences can be worried about another day!!

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The UK DMO today raised £5,000m by auctioning 5 year gilts. The auction was a complete success with a bid to cover ratio of 2.6x, and a tail of 0.9bp. Afterwards, everyone carried on with their lives as normal.

Good. I don't want to be 3rd World, I just want somewhere to live at a sensible price. Oh and a democratic, fair and measured government system so I can get on with living my life.

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Can someone tell me why these things are always called a success? Not just say... the Guilt auction happened.

Also, dont you expect it to be a success? Wouldnt it just be news if it failed?

Or is it readily expected to fail, so success is suprising and therefore newsworthy?

Also, by saying success, implys that we won. Surely we have lost in that we needed to sell Gilts in the first place?

Is this like saying that I was successfully offer a loan by the bank?

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Good. I don't want to be 3rd World, I just want somewhere to live at a sensible price. Oh and a democratic, fair and measured government system so I can get on with living my life.

so when are you moving from the UK ?

& where are you going ?

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Others questioned whether the auction would be a success. They have every right to ask this question. They then had no idea how to read the results of the auction and made themselves look silly. I was merely pointing this out. Highlight bad news and criticize government policy if you wish (I do too) but don't try to spin a fact into something it obviously isn't .

So far, the DMO is raising the funds needed to support the budget deficit. That is a statement of fact. Whether they can continue to do so in the future at a reasonable price, that is a matter of opinion.

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Others questioned whether the auction would be a success. They have every right to ask this question. They then had no idea how to read the results of the auction and made themselves look silly. I was merely pointing this out. Highlight bad news and criticize government policy if you wish (I do too) but don't try to spin a fact into something it obviously isn't .

So far, the DMO is raising the funds needed to support the budget deficit. That is a statement of fact. Whether they can continue to do so in the future at a reasonable price, that is a matter of opinion.

price is decided through sentiment

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Can someone tell me why these things are always called a success? Not just say... the Guilt auction happened.

Also, dont you expect it to be a success? Wouldnt it just be news if it failed?

Or is it readily expected to fail, so success is suprising and therefore newsworthy?

Also, by saying success, implys that we won. Surely we have lost in that we needed to sell Gilts in the first place?

Is this like saying that I was successfully offer a loan by the bank?

Are you serious or just teasing?

The government spend money and they fund that by taxation. In a recession they receive less taxes and have less ability to tax because it depresses economic activity. So they borrow from the future if they have to until they can claw back the money they spend today.

So the government has more or less succeeded in raising 5b which funds it and keeps government spending moving into the economy rather than causing government taxation to remove money from the economy only.

Because it is a recession a massive amount of money is moving from the economy via loan repayments back to the banks which is not balanced by the banks lending that amount back out into the economy. Somehow the government has to balance that removal of necessary money to prevent implosion of spending in the economy by raising their own spending.

The game now is to have sufficient inflation that it makes people feel things are under control and not out of control while preventing deflation.

Long term the government can only manage the economy and be creative in changing education or stimulating good buisiness practice and it cannot create wealth. But it can now make things easier until this crisis has eased as we move into the next phase which might be a long term austerity and stagnation as the banks rebuild their normal prudent capital base by accumulating money that flows from the economy to them. Meanwhile the government can do what it can to encourage the banks to reverse that move towards greater self preservation but there is only so much they can do.

I dont think you wanted an answer though.....but there you go!

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Others questioned whether the auction would be a success. They have every right to ask this question. They then had no idea how to read the results of the auction and made themselves look silly. I was merely pointing this out. Highlight bad news and criticize government policy if you wish (I do too) but don't try to spin a fact into something it obviously isn't .

So far, the DMO is raising the funds needed to support the budget deficit. That is a statement of fact. Whether they can continue to do so in the future at a reasonable price, that is a matter of opinion.

Look at the yields; if you call that a success you are focussing on a very narrow definition.

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Others questioned whether the auction would be a success. They have every right to ask this question. They then had no idea how to read the results of the auction and made themselves look silly. I was merely pointing this out. Highlight bad news and criticize government policy if you wish (I do too) but don't try to spin a fact into something it obviously isn't .

So far, the DMO is raising the funds needed to support the budget deficit. That is a statement of fact. Whether they can continue to do so in the future at a reasonable price, that is a matter of opinion.

If you could read you would see that i clearly said it would be a success. I then looked silly because it looked like a partial fail.

You are saying it is a total success for some reason.

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He'd better get going hadn't he... I think you predicted the dam would break by June. :ph34r: Or was it by May? :lol:

I can't be bothered searching for the post again to prove you wrong.

I will just rely on the fact that the majority on this board know that one of us is lying. :)

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I can't be bothered searching for the post again to prove you wrong.

I will just rely on the fact that the majority on this board know that one of us is lying. :)

No, you're right, it was Injin who made the June prediction. After your original bit of attempted doom predicting didn't come off, you were happy to fall into line behind him.

Not long until June now... The hyperinflationary collapse must be just around the corner. ;)

Edit: Anything to do with GOM needs a :ph34r: smiley.

Edited by redalert

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The UK DMO today raised £5,000m by auctioning 5 year gilts. The auction was a complete success with a bid to cover ratio of 2.6x, and a tail of 0.9bp. Afterwards, everyone carried on with their lives as normal.

The old sceptic in me suggests the following:

S&P given a bung by HM Government agency to issue temporary 'negative outlook' first thing this morning.

Consequently, a minor sell-off in equities.

The holders of cash from said equity sales looking for a reasonable low risk return.

Hey presto - new 5 year gilts available from today !

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The old sceptic in me suggests the following:

S&P given a bung by HM Government agency to issue temporary 'negative outlook' first thing this morning.

Consequently, a minor sell-off in equities.

The holders of cash from said equity sales looking for a reasonable low risk return.

Hey presto - new 5 year gilts available from today !

I like your line of thinking Fishman, I hadn't actually thought of that particular scenario. :D

edited for sounding like I can't speak properly. I am posting way too much today, having fun though. :rolleyes:

Edited by grumpy-old-man-returns

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The UK DMO today raised £5,000m by auctioning 5 year gilts. The auction was a complete success with a bid to cover ratio of 2.6x, and a tail of 0.9bp. Afterwards, everyone carried on with their lives as normal.

I don't expect any gilt auctions will fail.

but as a result, I expect to be paying >£100 for a loaf of bread a few months from now.

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If you could read you would see that i clearly said it would be a success. I then looked silly because it looked like a partial fail.

You are saying it is a total success for some reason.

If you genuinely misunderstood the way the result is presented and were asking an honest question (on the other thread), then I apologize for the flame over there. I enjoy debate and opinion, especially with a high level of uncertainty and volatility around but I'm just a bit bored with the lunatic fringe taking over this board.

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I don't expect any gilt auctions will fail.

but as a result, I expect to be paying >£100 for a loaf of bread a few months from now.

Ok we can have a market for forward contracts. I will happily supply as many loaves as you wish for £100 each in say, 6 months? How many shall I put you down for?

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