The Bond Bubble’s Back
• Daily ReckoningJust when you thought the bond bubble was being saved for another day… The government managed to auction $39 billion worth of 5-year debt yesterday… barely. Wednesday’s debt sale drew a bid-to-cover ratio of 1.92, the lowest investor demand since September 2008. Low demand forced Uncle Sam to jack up interest rates at the last minute in two separate bond auctions this week — yesterday’s sale and Tuesday’s $42 billion auction of 2-year notes. So what’s an indebted government to do? Manipulate the market, of course.
