Treasury Auction Gets Nasty. Yield Curve Re-re-re-re-re-renormalizes.

As abnormal as that sounds, it's actually totally normal. Proof inside.

Not sure if 7th inversion of yield curve is normal, or if I am on drugs.

I'm in a weird mood. It's not a good one. Not despairing. Wrestling. My Rabbi's sister in law was murdered last week. He's been on the channel, one of the only libertarian-educated Rabbis in the country. His wife's brother was on the way to hospital with his wife to deliver their fourth baby (baby was saved thank God, but she died). The murder of the couple in Sodom [DC] this morning is making my mood a lot more warped. I compensate with black humor. Not despair, there is no such thing. Just a yearning for the End Game. I'm writing now to get my mind off it as much as I can.

6 Days to Gold Delivery

With Memorial Day on Monday (Catch 22 Barbecue), we have 5 days to delivery of the next active gold contract. 161,465 remain open. Open interest remains quite dead at just under 454K. You can see how calm open interest is below.

Price, however, is anything but calm. Something else is moving the gold market, and it's not the futures market anymore. It's an improvement.

Yields Soar on Blecchy 20Y Auction

Interest rates soared yesterday following a bad 20Y Treasury auction. The word that the hive mind is using is "tepid". The only detail that matters is that the yield settled at 1.1bps above the secondary market rate at the close of bidding. I think they call that a "tail". But whatever the term, the point is that investors on the primary market (like a bond IPO) were only willing to pay a discount, not a premium, on what they could have gotten on the secondary market for the same security. Secondary market rates immediately jumped on this, but this is not a "failed" auction. That would mean the Treasury could not sell all the securities it had on offer, which would have driven interest rates to infinity on those securities left unsold. We'll get there, and it will accompany the end game, but we're not there yet.

Yield Curve Re-re-re-re-renormalizes