"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Thursday, May 12, 2011

Long Bond Flops on Poor Auction results

Reports are that the $16 billion, 30 year bond auction, generated poor demand. That should not come as much of a surprise after the big rally has dropped yields down to levels that no one in their right mind would want to lock up capital at for 30 years.

Bonds dropped nearly a full point on the auction news but are once again finding buying at a critical technical juncture. No surprise there also in this heavily rigged market.


  1. Hi Dan
    So your probably going to smirk a bit here, but what do you think of the call folks like Turk or Russell are making about a "a huge rebound" or "silver to make new high in a matter of weeks"?
    I enjoy reading both of those guys, but if that was to happen the 200MA probably won't get tested.
    Guess it still boils down to confidence in currencies still?
    Always enjoy reading your posts too as well as KWN Wrap Up.

  2. Anotheropinion;

    (interesting handle by the way) I make it a point of not making predictions. As a trader I have found that extremely expensive over the years. What I try to do is to interpret what the market price action is saying and make trading decisions based off of that. It has served me well over the years.

    If silver goes on to do what some are saying and makes new highs within a matter of weeks, then that is fine with me. If it does not, that also is fine. Long term we all believe it is going to do just that. For trading purposes however I would want to see price action confirming a new leg higher. Right now, the market is still range bound so any predictions are just that, predictions. If they work out, the guys who made them will look like heroes; if they do not, they will look like zeroes. Personally I do not see the point. Traders do not have that luxury. Hell, I have been predicting the bond market to break lower for years and look at where that has gotten me for my troubles!

  3. Solid experience talking there.
    I'm fairly new to the world of markets, but seem to be quickly (sometimes slowly) learning that (at least in the short term) markets will go against fundamentals and one needs to be reminded of technical s.
    Thanks again.

  4. Uhoh, that's not good news. The buying after a while just goes back to the comments I have made before concerning how the herd thinks that dollars are safe. My latest blog entry just completely NUKES this argument to smouldering rubble.

    I don't think I would want to lock up capital in rates that are even DOUBLE of what they are offering for those newly issued bonds! Those buyers can keep their deprecating paper!!

  5. Hi Dan, thankyou for all you do! I have been having trouble getting your latest posts. For example your post from the 12th just showed up (Friday 13th) and your post for the 13th showed up over at jsmineset but not on your blog so far. Do I have a permission setting wrong or something? I read your site several times a day now along with Jim kitco and mises.org.

  6. I'm having the exact same problem as stallheim. No matter how many times I refresh I'm not getting your updated blog posts.

  7. Hey all, not Dan's fault and not your fault either. The whole blogger platform had a serious glitch Thursday-Friday. Nothing worked anywhere.


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