One of the rules of the game is that any entities buying the auctions like today especially foreign governments and govt dealers and fellow travelers must make a profit on their purchases so as not to be discommoded. Thus, if there's any bad news for fixed income it must be elicited before the bids at 1100 am for the auction. But today, there's a horrible miscalculation. The Fed must have concluded that the purchase of mortgages would be good for fixed income. But now bonds are down almost 2 percentage points from the 1100 price that the fellow travelers bid at. And they actually have a loss. This is not the way the game is played, I hear them saying. Or as the English would say, "that's not cricket".


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