A bobl auction essentially just failed
Discussion
But in plain english... German government tried to sell some bonds (maturing in 5 years), and they didn't get bids on all of them - and some of what they did get were taking the piss bids that they ignored (b/c was 1.1 after withholding some); they had to withold some from sale.
In effect this is the market saying the yields are too low on the debt.
In effect this is the market saying the yields are too low on the debt.
Edited by Somewhatfoolish on Wednesday 26th May 10:15
anonymous said:
[redacted]
So this is something different from the following?"Jan. 7 (Bloomberg) -- Germany’s sale of 10-year bunds lured the least demand in six months as investors shied away from a flood of government securities, raising the prospect of increased borrowing costs for Europe’s biggest economy.
Investors bid for 5.2 billion euros ($7.1 billion) of the bonds offered today, a level of demand that prompted the Bundesbank to retain 32 percent of the securities, according to the central bank’s Web site. European governments want to raise money to finance more than $96 billion in bank bailouts and stave off the worst of the global recession. France may sell 7 billion euros of bonds tomorrow and Ireland began marketing five-year debt today. Spain is also planning a sale.
“I would call this a failed auction,” said David Keeble, head of fixed-income strategy in London at Calyon, the investment-banking unit of France’s Credit Agricole SA. “This was a very poor start of auction season.”"
Somewhatfoolish said:
that was 18 months ago!
The point I was getting at was the German bond auction failures won't be as earth shattering as say the failure of a US treasuries sale. For example another more recent article for April this year
"WHAT IF THEY GAVE a bond auction and nobody came?
That is the ultimate doomsday scenario with the unprecedented fiscal deficits around the world -- that governments' credit lines could run out and they couldn't raise the cash they needed in the bond markets. At that point, after bailing out banks that had faced the same dilemma, who's there to bail out the governments?
That hasn't happened in Greece, ground zero in the European debt crisis. Earlier this week, Greece found ready and willing buyers for its short-term bills, albeit at yields twice what the government had to pay just a few months ago.
It was Germany that didn't receive sufficient bids to sell all the bonds it offered. In other words, the auction failed.
This just doesn't happen in major government bond markets. In the U.S. Treasury market, if the total of bids isn't double the total of securities being offered, it's considered horrific auction.
But, Wednesday, the auction of €3 billion (just over $4 billion) of 30-year German government bonds, or bunds, attracted only €2.752 billion in bids and wound up selling €2.458 billion at a yield of 3.83%."
source
Edited by Fittster on Wednesday 26th May 10:45
Somewhatfoolish said:
fido said:
anonymous said:
[redacted]
Exactly, i can't see why you would buy Bobl over US treasuries with such a small premia .. heck you might as well take a gamble on Gilts, or perhaps not.My concern is that all this new learning is pushing out some old stuff.
hondafanatic said:
Somewhatfoolish said:
fido said:
anonymous said:
[redacted]
Exactly, i can't see why you would buy Bobl over US treasuries with such a small premia .. heck you might as well take a gamble on Gilts, or perhaps not.My concern is that all this new learning is pushing out some old stuff.
Somewhatfoolish said:
hondafanatic said:
Somewhatfoolish said:
fido said:
anonymous said:
[redacted]
Exactly, i can't see why you would buy Bobl over US treasuries with such a small premia .. heck you might as well take a gamble on Gilts, or perhaps not.My concern is that all this new learning is pushing out some old stuff.
Right, so in English he is saying that Germany cannot raise cash via the bond markets at this point - which means they are a bit f***ed in terms of paying a few more billion into the money pit of the Euro to bail out Greece et al.
Which also means that in theory the Germans may have to pull out of the Euro (if I am being optimistic) and the entire thing will go to rats**t?
Or have I got it wrong?
Which also means that in theory the Germans may have to pull out of the Euro (if I am being optimistic) and the entire thing will go to rats**t?
Or have I got it wrong?
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