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To: orkrious who wrote (254068)	8/5/2003 1:40:42 PM
From: KM	Respond to of 436258

1:24pm print this page Ugly Treasury Auction The 3 day auction gets off to a bad start The first part of the three-day Treasury auction did not go well. Typically a rise in yields in front of an auction produces an increase in demand. Bidders obviously felt that way, but it did not happen. The bid-to-cover ratio (a measure of how much interest there is in a new issue relative to the amount being offered) came in at a puny 1.32, far below (indicating less interest) the prior 1.96 level at the last 3-year auction in May. In the when-issued market, the new 3-year was trading at a yield of 2.38% right before the auction, meaning that's the level where people expected it to price. Instead, it came at 2.42%, and the when-issued immediately shot up to a 2.43%. That seems like a small move when viewed from a big picture perspective, but it indicates a serious miscalculation on the part of the bidders. The damage to the longer end of the curve was lesser: the 10-year was off 7/8 of a point in front of the auction, then lost another quarter-point on the news (and putting me underwater on my Treasury purchase from earlier today. There are only two potential silver linings to this auction. First is that the auction stretches for three days; a bad first leg often sobers up bidders and will often make the next leg go better. Second is that agency and swap spreads have narrowed today, and have not widened on the bad auction news. If the other two legs of the auction go this badly, however, then it will be an indication that the mortgage-related panic selling is not done, which could force agencies and swaps wider again. (Reynolds - Minyanville)

To: orkrious who wrote (254068)	8/5/2003 1:52:48 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 436258

Not so sure this FED and other CB's were able to talk any one out of gold as a store of value. One of the CB's biggest achievement is sadly the fact that people believe more in FIAT MONEY instead of real store of value. It will take some major crisis to change people view and when that happens gold will go easily above $1,000, but I do not think that CB's will let this happen. As to the issue of value of gold I would say that gold is undervalued and the USD is overvalued ........ but regardless what I think the market indicates differently. There is no question in my mind that financial markets are manipulated including gold