[Golddigger3]

The German bond action this week is much ado about nothing. Bunds (their equivalent to 10-year Notes) were almost unch on the week. Yawn.

I'm new to following national debt. Would you mind elaborating:

1) on why a country not be able to sell 1/3 of it's debt offering is no big deal;

2) on how dangerous the U.S. treasury situation is. Thanks

[SAJ]

Your first question:

Sometimes the central bank simply gets its timing wrong and the usual buyers have just purchased a slug of debt. Sometimes they misprice the offering (Spain and Italy used to be renowned for doing exactly this, btw). In any case there's obviously no immediate problem, as shown by Bund and BOBL futures this week. If there were any sort of serious problem, Bunds would've been down at least 2 handles and likely more. Later on, if the situation persists, who knows?

Your second question:

Very.

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Be careful of reasoning, esp. about bonds, from ONE data point, as you appear to be doing in the current instance. One-off events occur in debt mkts with surprising frequency.