Alea comments on the auction:
Horrific auction results sent the long bond down more than 2 points, last yielding 4.27, highest since november.If the last twenty0ne months* are any indication the equity markets won't figure out what just happened for a while, then will go into wailing and gnashing of teeth mode.
This will be a monthly event, fasten your seat belts. Odds on, on a fail some time this year.
*e.g. by Aug. 15, 2007 it was apparent that there were huge dislocations in the credit markets, yet the stock market went on to set the all-time DJIA high on October 9.