A few days ago, Bloomberg released an article in which it described the lamentations emanating from the Primary Dealers whose role in bond purchases is being increasingly undercut by Direct bidders who get to buy US paper directly from the Treasury and without Dealer intermediation. Well, no such worries in today's just concluded $32 billion auction of 3 Year paper, which closed moments ago at a high yield of 0.342%, the lowest "high yield" in 2013 and a Bid To Cover of 3.238, the lowest since September 2011. But what was most notable is that the combined take down of Directs and Indirects was a tiny 35.1%: the lowest non Dealer interest since January 2009. Naturally, the Dealer take down was the inverse or 64.9%, which also was the largest since January 2009. Obviously all this paper will be promptly sold back to the Fed, but any artificial (and inaccurate) concerns that Dealers are not getting their due allocation of paper can now be put to rest.
The question of why this cash-equivalent paper was not in big demand with the non-dealer community is applicable, but at this point no actual logical and fundamental questions matter. All one should know is to buy stocks because every central bank is now solely focused on sending the DJIA to 36,000 or bust.
