Bill’s Commentary:
“Here is the math for holding (and issuing) 30 yr Treasuries. Got gold?”
Those Big, Beautiful Bonds
Deciphering the trader talk in the article, the Treasury took on an additional $13 billion in debt that is repayable in 20 years, paying an annual interest rate of 4.883% (approximately $635 million a year).
A 2.68 bid-to-cover ratio means that for every $1 of debt issued, there were $2.68 in bids, suggesting a healthy market appetite. Only so many entities can lend billions of dollars at a time; here are the three who took the auction:
- Direct bidders (institutional money like pension funds) took 22.9%;
- Indirect bidders (foreign central banks) took the brunt at 67.4%;
- Primary Dealers (JP Morgan, Goldman Sachs, etc.) held just 9.7%.
BillHolter.com 