Long Bonds get Punk'd

Just a quick note in between sessions -- the long bond auction today was decidedly punk. The Treasury sold $9 billion of 30-year notes at a yield of 4.45%. That was above the 4.42% that traders had anticipated. Indirect bidders purchased just 10.7% of the bonds sold, the lowest reading since sales of 30-yr. paper started up again in February 2006.

As one observer told Bloomberg:

"The auction went as poorly as one could imagine," said Andrew Brenner, co-head of structured products in New York at MF Global Ltd., the world's largest broker of exchange-traded futures and options contracts. "There isn't a lot of demand for bonds at these levels."