Given that the market took a sharp turn lower on Thursday afternoon after the results of a dogsh*t (technical finance term #8203) 30 year treasury auction that posted a stunning 5.3 bps tail and a bid to cover that was the lowest since December 2021, I thought it would be a good idea to refresh myself and my readers on…well, exactly what the f*ck all that stuff means.

Tail? Bid-to-cover? Beavis and Butthead had better luck understand things in Spanish class back at Highland High:

In plain terms, yesterday's bond auction means the government sale of debt that is necessary to continue running the economic Ponzi scheme we call fiscal and monetary policy didn't go quite as well as old crow Janet Yellen's medicine show would have liked.

Why is understanding the rest of the jargon and nonsense about auctions important? Take a look at the equity market's reaction to the 30Y auction on Thursday, courtesy of Mr. Durden over at Zero Hedge:

Chart: Zero Hedge

And so when you're having the perfunctory happy hour discussion about "the day in markets" in your Patagonia vest in some douchebag bar in Tribeca full of everyone I've tried to avoid my entire life, wouldn't you like to make some sense? Or, at least, fake it well like I do?

Zero Hedge's full coverage of the disaster auction Thursday can be found here, though it's probably worth a read after James' below "…for Dummies" series on how to understand auction terminology, contained below.

The below explanation of how treasury auctions work was written in 2022 by James Lavish, CFA, who you can follow on Twitter here or subscribe to his newsletter here. I highly recommend both.