I think that there is too much hype going on about the large tail in the 30 year auction today. I mean, it was a big tail, really a huge tail, but I mean, with the stress test, employment numbers, I mean, I don't think the chatter about how the government is going to have trouble keeping down rates makes any sense at all... Thoughts?

I still think it all hinges on what happens to quant easing policy. Fed is a buyer on Monday, so that will be the day for them to send a signal to the market if they care to defend.

That said, 4.25%+ (we'll be at 5% quickly at this rate of decomposition) is a value proposition as a perpetual put on an equity portfolio, considering the environment.

My view is that bonds are broken... All the newsflow is negative bonds, so I expect the punishment to continue. NOB spread, btw, is at historical highs, I think.

I actually think it IS a big deal simply because of the importance of these technical levels. Given the way sentiment moves the long end of the curve, investors sitting on bonds they bought yielding in the low 3s will panic pretty quickly. This thing could get away from Helicopter Ben, especially since they have shown no desire yet to defend rates in the long end. The $300 billion of (current) firepower is NOT enough to pick a fight with this market.

9 bps tail, and then the secondary market blasted right through that tail. Wow.

Not until the Fed shows up at buys 20B on an open market op am I convinced that long bonds are a buy. I've capitulated and changed sentiment. I'll wait until after to get bullish.