Jul 6, 2009, 1:07 p.m. EST

Treasury sells $8 billion in TIPS at 1.920%

By Deborah Levine

NEW YORK (MarketWatch) - The Treasury Department sold $8 billion in 10-year Treasury Inflation Protected Securities on Monday at a rate of 1.920%. Bidders offered $2.51 for every dollar of debt offered, the highest so-called bid-to-cover in at least seven years. Indirect bidders, a class of investors that includes foreign central banks, bought 49.7% of the sale. In January, they took 47% of the sale. The proportion of sales going to indirect bidders appears to have jumped up significantly last month after a change in the way bids are tabulated. TIPS pay investors a coupon plus the rate of inflation, as measured by the consumer price index. Recently, the gap between the yield on TIPS and regular Treasurys was 1.67 percentage points. Falling equities and fears about the economic outlook kept short-term Treasurys higher. Two-year note yields /quotes/comstock/31*!ust2yr (UST2YR 0.94, -0.04, -3.99%) , which move inversely to prices, fell 4 basis points to 0.94%, the lowest in a month.

http://www.marketwatch.com/story/treasury-sells-8-billion-in-tips-at-1920?siteid=rss

10-YEAR		TIPS	07-15-2009	07-15-2019	1.875	1.920	99.592335	912828LA6
2-YEAR		NOTE	06-30-2009	06-30-2011	1.125	1.151	99.948740	912828LF5
5-YEAR		NOTE	06-30-2009	06-30-2014	2.625	2.700	99.651404	912828KY5
7-YEAR		NOTE	06-30-2009	06-30-2016	3.250	3.329	99.510316	912828KZ2
3-YEAR		NOTE	06-15-2009	06-15-2012	1.875	1.960	99.753523	912828KX7
9-YEAR	11-MONTH	NOTE	06-15-2009	05-15-2019	3.125	3.990	92.968581	912828KQ2
29-YEAR	11-MONTH	BOND	06-15-2009	05-15-2039	4.250	4.720	92.501690	912810QB7
2-YEAR		NOTE	06-01-2009	05-31-2011	0.875	0.940	99.871675	912828KU3
5-YEAR		NOTE	06-01-2009	05-31-2014	2.250	2.310	99.718283	912828KV1
7-YEAR		NOTE	06-01-2009	05-31-2016	3.250	3.300	99.689717	912828KW9
3-YEAR		NOTE	05-15-2009	05-15-2012	1.375	1.473	99.713432	912828KP4
10-YEAR		NOTE	05-15-2009	05-15-2019	3.125	3.190	99.447210	912828KQ2
30-YEAR		BOND	05-15-2009	05-15-2039	4.250	4.288	99.361980	912810QB7
2-YEAR		NOTE	04-30-2009	04-30-2011	0.875	0.949	99.853739	912828KL3
5-YEAR		TIPS	04-30-2009	04-15-2014	1.250	1.278	100.113235	912828KM1
5-YEAR		NOTE	04-30-2009	04-30-2014	1.875	1.940	99.691687	912828KN9
7-YEAR		NOTE	04-30-2009	04-30-2016	2.625	2.630	99.968223	912828KR0
3-YEAR		NOTE	04-15-2009	04-15-2012	1.375	1.385	99.970714	912828KK5
9-YEAR	9-MONTH	TIPS	04-15-2009	01-15-2019	2.125	1.589	103.325496	912828JX9
9-YEAR	10-MONTH	NOTE	04-15-2009	02-15-2019	2.750	2.950	98.298568	912828KD1
2-YEAR		NOTE	03-31-2009	03-31-2011	0.875	0.949	99.853739	912828KH2
5-YEAR		NOTE	03-31-2009	03-31-2014	1.750	1.849	99.529266	912828KJ8
7-YEAR		NOTE	03-31-2009	03-31-2016	2.375	2.384	99.942292	912828KT6
3-YEAR		NOTE	03-16-2009	03-15-2012	1.375	1.489	99.667005	912828KG4
9-YEAR	11-MONTH	NOTE	03-16-2009	02-15-2019	2.750	3.043	97.504473	912828KD1
29-YEAR	11-MONTH	BOND	03-16-2009	02-15-2039	3.500	3.640	97.456658	912810QA9
2-YEAR		NOTE	03-02-2009	02-28-2011	0.875	0.961	99.830481	912828KE9
5-YEAR		NOTE	03-02-2009	02-28-2014	1.875	1.985	99.479306	912828KF6
7-YEAR		NOTE	03-02-2009	02-29-2016	2.625	2.748	99.221940	912828KS8
3-YEAR		NOTE	02-17-2009	02-15-2012	1.375	1.419	99.871395	912828KC3
10-YEAR		NOTE	02-17-2009	02-15-2019	2.750	2.818	99.411068	912828KD1
30-YEAR		BOND	02-17-2009	02-15-2039	3.500	3.540	99.264139	912810QA9
2-YEAR		NOTE	02-02-2009	01-31-2011	0.875	0.925	99.901394	912828JY7
5-YEAR		NOTE	02-02-2009	01-31-2014	1.750	1.820	99.667162	912828JZ4
*20-YEAR		TIPS	01-30-2009	01-15-2029	2.500	2.500	99.063837	912810PZ5
3-YEAR		NOTE	01-15-2009	01-15-2012	1.125	1.200	99.779650	912828KB5
9-YEAR	10-MONTH	NOTE	01-15-2009	11-15-2018	3.750	2.419	111.579767	912828JR2
10-YEAR		TIPS	01-15-2009	01-15-2019	2.125	2.245	98.930505	912828JX9
2-YEAR		NOTE	12-31-2008	12-31-2010	0.875	0.922	99.907073	912828JV3
5-YEAR		NOTE	12-31-2008	12-31-2013	1.500	1.539	99.813005	912828JW1

Sweet. Can you get me some at 19+1+1+1+.667?

That's pretty funny! Be careful what you ask for, some silly joker broker will start floating your example of a fake offer shortly!

***** "Bidders offered $2.51 for every dollar of debt offered, the highest so-called bid-to-cover in at least seven years." *****

I wonder if hyper inflation of 800% or an 8% interest rate is a reasonable assumtion.. hedged money with inflation protection with a 500% + return minus any tax benefit on the conservative side..

But I am all for the 1+1+1+1+1+1+1+1+1+1+1+1+1+1+1+1+1+1+1+1+1 at sub par numbers that is inflation protected by the FED.

Be well, JW