Problems for the US & UK trying to sell treasuries today.

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Link

Treasuries fell for a fifth day after an auction of $34 billion in five-year notes drew a higher-than-forecast yield, spurring concern record sales of U.S. debt are overwhelming demand...he U.K. failed to attract enough bidders today at an auction of 1.75 billion pounds ($2.55 billion) of gilts for the first time in almost seven years.

Two possible reasons I can guess that are causing this: 1) people don't want treasuries much because the stock market is going up and their appetite for risk is up, 2) mounting debt in the US and UK is concerning investors, especially with the recent silly buggers both countries have done to try and suppress their yields.

Based on this article and another on cnn money and the fact the dow went from up almost 200 to now down a decent bit it seems option 2 is more likely. I wonder if this is an anomaly or serves as a warning for both governments that people don't want to hold bonds if the money is going to be turned to sh*t.

 

[miketheidiot]

i think the main problem is 1) actually.

 

[bamacre]

Money doesn't grow on trees. Too bad our monetary policy doesn't take that into consideration.

 

[The-Noid]

Technically A.) it is a fiscal issuance not a monetary issuance. B.) monetary money does grow on trees it is literally book entries in a computer

 

[Moonbeam]

I bet the end is near.

 

[bamacre]

Originally posted by: Moonbeam
I bet the end is near.

The end of what?

Our economic problems? Surely not. We can't get rid of our economic problems because we won't allow the problems to come up for air. We keep trying to sweep them under the rug rather than suffer the pain of actually cleaning them up. Is the end of that near? Perhaps so. And what a mess it will be.

 

[LTC8K6]

Fear of making a large profit...

 

[First]

Bond markets always weaken when equity gets more attractive. That's not necessarily a bad thing. Fed is going to increase the rate at which they're buying bonds from Americans anyway, they have to increase the money supply to prevent deflation somehow.

 

[The-Noid]

3 reasons for this.
1. Not enough clarification from central banks as to how purchases will work.
2. Japanese holiday today so many traders are out.
3. This is the most important: these aren't benchmark issues for either government. The 5 year is better done with futures and spots while the UK 40 year gild is thinly traded especially when the cb is buying other maturities.

 

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Originally posted by: miketheidiot
i think the main problem is 1) actually.

This lends to the idea it was the second.