What a Difference a Day Makes

October 9th, 2008 12:13 pm | by John Jansen |

The taxpayers recouped some of the gargantuan losses they suffered yesterday with the hasty auction of reopened 10 year paper which now resides in the 6 year part of the curve.

The Treasury sold $10 billion February 2015s and that issue stopped 4.2 basis points through screen levels.

Mr Paulson also sold $10 billion February 2018s  and that stopped 2.5 basis points rich to prevailing market levels.

I will offer an answer later regarding the question of how or why an auction would trade rich to market levels

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  1. 3 Responses to “What a Difference a Day Makes”

  2. By Milton Arbogast on Oct 9, 2008 | Reply

    Could you explain this post? I honestly do not understand the vocabulary and, more importantly, would like to.

    Citizens need to know these things.

  3. By SS on Oct 9, 2008 | Reply

    Milton,

    You have to look at one of the previous posts on yesterday’s auction to get the background. This was actually good news for the taxpayer as the bonds the US Treasury sold drew more demand than yesterdays — no notice — auction. This means they were sold at a higher price and the Government has to pay less interest on the money it borrowed.

    Hope that helps.

  4. By serious_student on Oct 9, 2008 | Reply

    just like to second milton’s plea. i’ve been reading your blog everyday for the last few weeks, and will often google your vocabulary or refer to one of my trading texts to follow your entries–but sometimes i can’t figure out the reference or it takes more time than i have.

    so if it doesn’t slow you down too much or crab your style, a brief paranthetical reference might mean you educate even more of us hoi polloi.

    in general, tho, i like your blog because it seems like a practical way to learn about bonds.

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