Rick Santelli gave the 30-year Treasury auction an “F-” because the bid jumped so much, and the yield to cover was pretty unimpressive.
But here’s the thing: It’s a BAD sign when everyone is lining up at the trough to lock their money up for 30 years at a ridiculously low (by historical standards) yield. That means people think we’re becoming Japan, and don’t see any other investment opportunities.
When yields were all plummeting, everyone waved their hands and yelled: WE’RE JAPAN! DEFLATION!
Now everyone’s yelling: INFLATION! BOND VIGILANTES!
Update: Hilariously, the yield is already back to where it was pre-auction. So the hyperventilating really was pointless.
Here’s a look at the yield curve:
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