Otis still loves us!

Otis still loves us! The 7 yr note auction was very good as the yield was about 3-4 bps below the when issued and the bid to cover at 2.76 was above the average seen this year of 2.53 and is the 3rd highest of the 10 auctions now seen in ’09. Indirect bidders totaled 62.5% which is right in line with the recent auctions. To repeat what I said yesterday after the 5 yr, “Whether its due to year end buying and prettying up of balance sheets, or still economic concerns, or still apparent risk aversion, or bank buying taking advantage of free money from the Fed, or foreign central bank FX intervention of buying US$s to halt the rise in their respective currency or lack of belief in inflation or confidence that the Fed will remain easy for much longer, the US Treasury has been able to finance every growing deficits with continued relative ease.”

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