“The bond got to a point on the curve where the market was able to digest the supply,” said Richard Bryant, senior vice president in fixed income in New York at MF Global Inc., a broker of exchange-traded futures. “It underscores the fact that market participants continue to see value in Treasuries at these yield levels.” [1]
I have no idea whether Bryant meant that the yield was "low enough" or "high enough", although the maturity of the paper might be in there somewhere. In any case, when the phase of the Moon is right and Jupiter is aligned with something-or-other (you can subscribe to "Premium Doom" to learn what that is), it’s always a good time to buy America’s officially sovereign debt. After all, it is the world’s safest investment vehicle 
Foreign Demand
Indirect bidders, a class of investors that includes foreign central banks, bought 48.1 percent of the notes at today’s auction. They bought 50.2 percent of the securities in July, the most since February 2006. They purchased 49 percent in the June auction. The average for the past 10 auctions is 32.8 percent.
So-called long bonds have handed investors a 25 percent loss so far in 2009, versus a 4.8 percent decline for the broader market, according to Merrill Lynch & Co. indexes.
……………………..
Arthur Dent: Ah. This is obviously some strange usage of the word "safe" that I hadn’t previously been aware of.
Unfortunately, that "Indirect" record may well have been more like "Misdirect," or at least deserve a great big asterisk. See below for CHANGE WE (didn’t) NEED.[2]
The Puplava number didn’t change at all. Fed’s own holdings of Agency Debt are exactly as they were last week, but there is something else I’ve noticed about that number. Have a look at the 2nd-last line in this H.4.1 extract:
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In view of the (see above) 25% haircut for long treasuries holders in ’09, it’s safe to assume that Buffy (our prototypical retired Ruritanian diplomat and secret Fed shareholder) is chocking on her crab cake right now thinking about the fate of an investment this year of more than half a trillion dollars in agencies with every last MBS maturing more than 10 years from now. If nothing else, I think we’ve established that the Federal Reserve is a very weird financial institution.
UPDATE: Big hat tip to Doomer Hutch (comment #1 below) for doing what we should have been doing and reading the August 12th FOMC Statement:
… As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. …
For all the noise and fury about bonds this week’s Reuters report [3] could just as well have been titled "Gone Fishing". The report was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.[4] Here is Doom’s updated CSV version of the agencies and treasuries foreign central bank holdings data set.[5]
Treasuries stopped dead, backsliding a trivial $0.688 billion.
The slide down in agencies moderated. This week the figure dropped $1.857 billion, just over a quarter of last week’s selloff.
The total reduction in foreign central bank holdings of US obligations was just $2.545 billion, barely discernable on the above graph. Oddly, the numbers for exactly a year ago did about the same thing. Maybe the grownups all took the week off to reacquaint themselves with their spouses and children 
Twist’s ratios graphs were "stable," which is to say they barely budged.
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Setser’s 52-week change graph was also flat. As noted, 52 weeks ago saw a very similar result. Hope everyone enjoyed their time away from the office. Of course that big auction described in [1] was from yesterday (Thursday) and doesn’t show up for a week. Things may get a little more frisky then. Stay tuned.
Frisky indeed. NPR notes treasuries a screaming buy,[6] especially for the indirect guys. Funny, but if the MSM were to beat the drum for this stuff in an equities context they’d risk sending the S&P off in the general direction of 333. Interestingly, here’s a guy [7] who thinks just that is about to transpire.
Thanks go to twist for the find at [6] and, as usual, for her work on all the charts and graphs
________________________
Notes and References
[1]: "Treasuries Rise After Record $15 Billion 30-Year Bond Auction ", by Susanne Walker and Cordell Eddings, Bloomberg, August 13, 2009.
[2]: "Money, Money Everywhere", by David Galland Daily Dispatch, July 31, 2009.
Weighing in on the auction, our own Bud Conrad had this to say…
…It is worth a footnote that the government changed the definition of the indirect bidder last month in ways that perhaps explain the higher participation rate, but knowledgeable people I know can’t explain how big the effect is. My reading of the regs didn’t make it seem like a big thing, but one does have to wonder about the motives they have for deciding to tamper with this widely watched statistic at this time?
[3]: "Foreign c.banks U.S. debt holdings fall in week – Fed", by John Parry, Reuters, August 13, 2009.
[4]: "H.4.1 Factors Affecting Reserve Balances", Federal Reserve Statistical Release (weekly), Federal Reserve Bank of New York.
[5]: The updated data set as a Comma Separated Value (CSV) file is here.
[6]: "Falling Retail, Rising Job Loss Leads To Record Treasury Auction", by Laura Conaway, NPR, August 13, 2009.
When investors feel skittish, the way they did after news that retail sales fell in July and job loss rose last week, they run for safe bets like U.S. Treasury bonds. Demand for 30-year Treasurys led to a record $15 billion auction today.
…So who was taking the deal on Treasuries today? Bloomberg reports [they're linking to [1] above] that indirect bidders, which includes foreign central banks, bought 48.1 percent of them.
[7]: "Just Who’s Buying This Stock Market Rally?", by Graham Summers, Market Oracle, August 13, 2009.
We also saw the LARGEST options spread ever to hit the International Securities Exchange when someone sold 720,000 contracts on the S&P 500 ETF. In a nutshell, someone made a record bet than the S&P 500 would collapse sometime between August and December.
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Your reports like this help, but in my case, the Fed has been quite successful in achieving that delicate balance between transparency and obfuscation which has left me totally bewildered
When the FOMC statement came out I heard a lot about the winding down of Treasury purchases, (due to end in October). I didn’t see much comment on this other. So will that make $2T by year end?
“the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year.”