Bond No Longer a Hit

Shaken, not stirred. That’s the status of the Government bonds of the United Kingdom after the UK Treasury failed to sell all of them for the first time since 2002. Apparently, the recession is hitting on all cylinders now and what used to be “sure things” are now also failures.

Previously, the UK Treasury wanted to sell 1.75 bln Pounds of 40 year old bonds but they were not able to sell them all. According to figures, they were only able to sell 1.63 bln pounds of the debt. While it is still a significant amount, it is one thing to sold out and completely another to almost do so especially when it comes to this.

There were many explanations offered about the occurrence. Some are looking at it half full noting that there are many factors to be considered when it come to these situations and things are not exactly very easy to understand. The Treasury even goes on to say that while the situation did happen, the demand for gilts (bonds) remain strong.

"It would be wrong to read anything into the results of one auction event, which depends on the gilt on offer, demand and market conditions on the day," a Treasury spokesman said.

"It’s a sign there isn’t enough demand, which could be due to the amount of issuance that is expected to come, or people are worried about inflation," said Mohit Kumar, a strategist at Deutsche Bank.

Whatever it is a sign of, it is definitely the sign of the times.