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5 Year Bond Contagion As German Bobl Auction An Unsubscribed Failure

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http://www.zerohedge.com/article/5-year-bond-contagion-german-bobl-auction-unsubscribed-failure

Following yesterday's very disappointing 5 Year $35 billion auction by the US Treasury, Germany followed up today with its own unsubscribed bond auction failure, after Germany sold just €4.825 billion in 5 year bonds at the 2011 low yield of 2.16%. The problem - the auction remained technically undersubscribed as the €6 billion offer only received €5.445 billion in bids. Even on a sugar coated basis, the BTC was just 1.1, a plunge from the 1.9s seen recently. But such is life without the backstop of Primary Dealers who buy up everything there is, until they themselves are no longer able to flip the shell game. From Dow Jones: "The Bundesbank said all bids at the lowest price were accepted and it satisfied all the non-competitive bids at the weighted average price. The amount retained for market-tending purposes was about EUR1.175 billion, bringing the total issue size to EUR6 billion, as previously announced." Bottom line, with the pristine economy of Germany unable to sell bonds, what does that mean for the US and the rest of the insolvent "developed" world?

Full details:

Issue five-year bobl

Coupon 2.75%

Maturity April 8, 2016

Amount on offer 6 bln

Bids received 5.445 bln

Bids accepted 4.825 bln

Bid-to-cover ratio 1.1 (1.9)

Average yield 2.16% (2.45%)

Average price 102.63 (101.35)

Minimum price 102.60 (101.34)

Settlement date July 1, 2011

The bond vigilantes getting restless. Perhaps if they offered more interest in an inflationary environment they'd have more takers?

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http://www.zerohedge.com/article/5-year-bond-contagion-german-bobl-auction-unsubscribed-failure

The bond vigilantes getting restless. Perhaps if they offered more interest in an inflationary environment they'd have more takers?

Exactly! They've managed to sell £5bn at only 2.75%aa?! Inflation alone will probably be around 2%! That is very very cheap indeed!!

Who is buying all this cr@p??? :blink:

( Edit: Before someone else says it, yes, I know, I know, complete and total lack of alternatives... I know... )

Edited by Tired of Waiting

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Germany are the least interesting to be honest. While I celebrate these bond sale failures, it is the yields on the PIIGS that are the big news. Just look at how Portugal and Ireland have followed Greece up and how Spain and Italy are diverging from the core.

COME ON!!! Let's blow the lid on this ponzi-fraud!!!

dw2n37.gif

Edited by General Congreve

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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