Thursday, 30 July 2009

US "fails" to sell its debt

No, not really, but yesterday the US Treasury auctioned off $39bn worth of 5-year debt, just to cover a couple of days of government spending, and there were fewer than 2 bidders for each bond. Unless you have two bidders it's not an auction, it's a giveaway! For fact fans the coverage was 1.923.

Thanks to the American primary dealer system they at least managed to sell the lot - primary dealers are contractually required to buy. (In the UK of course we can have genuine no-bid failures.)

Tomorrow the US Treasury is going to try to sell some 7-year debt.

Good luck with that!

Link: Market Ticker

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