A bid to cover of 2.36 is god awful. Anything below a 2.0 BTC is considered to be a failed auction. We came real damn close to seeing one yesterday. The 28% participation by the indirect bidders (FCB's) was also not a good sign. The world's appetite for our debt continues to deteriorate. CNBC's Rick Santelli gave this auction a big fat "F". So what does this tell us? The bond market is more worried about inflation versus deflation. Gold was up strong yesterday which confirmed yesterday's inflationary sentiment following the tepid demand for Thursday afternoon's 30 year auction.