Another 10 year bond auction and another day of tremendous demand for US government debt. Despite persistent fears over the imminent bankruptcy of the United States, investors just can’t seem to get enough of these bonds. The auction saw a bid to cover of 3.13. Direct bidders and indirects could have taken down the entire auction on their own (without any aid from the primary dealers!). And the primary dealers could take the entire auction two times over. Of course, none of this is even remotely surprising to those who understand that bond auctions are mere reserve drains and not fiscal financing operations.