the fed just auctioned a swap for its treasuries with the nation's primary dealers, which obtain the treasuries in exchange for mortgage and other collateral, to help them liquefy their balance sheets.
the fed made available $75 billion of its treasuries, but only $46 billion in bids were submitted, producing a bid/cover ratio of 0.62, the lowest cover ratio for any of the three $75 billion auctions since the first one on 3/27, which was the first TSLF (Term Securities Lending Facility) auction.
about $108 billion of the fed's securities have been lent through the TSLF, $92 billion less than has been authorized by the fed's board of governors. about $157 billion were outstanding after the first four weeks of the program.
this is good news to the extent that it indicates dealers have become less dependent upon the fed's balance sheet in order to liquefy their own.