And Some Media Propaganda Of Our Own...

Tyler Durden's picture

Earlier, when we penned the post "In Anticipation Of Our Own "Department Of Truth" we disclosed some very blatant examples of media  manipulation by the Chinese propaganda bureau. We left that piece with an open ended query of when we may see comparable "information" massaging in the U.S. We didn't have to go too far to demonstrate a rather clear domestic example. A recent article by Bloomberg's Susanne Walker and Wes Goodman titled "China Adding to $1 Trillion of U.S. Debt Caps Rise in Rates" made the following bold statement: "Investors outside the U.S. have boosted their holdings of
longer-maturity Treasuries to the highest level since the credit markets
froze in 2008, helping curb rising yields amid concern inflation is
accelerating." The data massaging, in case it is not clear, has one goal only: to instill the reader with the impression that foreign buyers are stepping in to buy US debt, despite inflation concerns, and make the role of the Fed's relentless monetization of virtually all US gross debt issuance seem less relevant in response to the recent letter by Bill Gross highlighting precisely the opposite. The authors go on to say: "The shift toward long-term debt shows bond buyers outside the U.S. agree
with Federal Reserve Chairman Ben S. Bernanke’s assessment that
inflation will be contained even as global food and energy prices soar.
Bill Gross, who runs the world’s biggest bond fund at Pacific Investment
Management Co., warned last week that yields on Treasuries are too low
with inflation accelerating and the central bank planning to complete
$600 billion in asset purchases in June." Alas in their attempt to validate their thesis Walker and Goodman make the blatant mistake of comparing Chinese holdings data from before and after the just announced TIC data holdings revision. To wit: "China, the largest investor in U.S. government debt after the Fed,
increased longer-term notes and bonds by 39 percent to $1.145 trillion
in December from a year earlier,
while its stake in bills declined 78
percent to $15.4 billion, the most recent Treasury data show." Alas, in making that statement, it confirms how clueless the authors are in interpreting ever critical Treasury data. We can only hope this error was made without premediation, or else we can now conclude that the Department of Truth is now actively manipulating "data" in our own backyard, to reach pre-determined goalseeked conclusions.

What is the basis of these allegations?

As Zero Hedge disclosed on February 28, Treasury International Capital reported that it was adjusting Treasury holdings, which were for most part static, except for holdings of China and the UK, with $268 billion being added to the previous Chinese holdings of $891.6 billion making the new total $1,160 billion, while UK holdings declined by $269 billion to $272 billion (we are convinced this number will be further revised in the future).  The fine print here, however, is that anyone who would take a mere 2 minutes to read the heading of the relevant TIC table, would find out that the revised Treasury number applies only for holdings from June 2010 onward, while everything before June 2010 is based on the old data series. And even a first year analyst at Bank of America knows that comparing and presenting pre- and post-revision data for public consumption is immediate grounds for termination (or an indication of extremely sloppy editorializing).

Readers are encouraged to check the source data indicating the variance between the "New Series" and the "Old Series" at the following link.

In other words, the farthest back one can possibly go back using the most recent data is June 2010, when the revised data begins. Bloomberg, however, completely ignored this, and based its entire article which somehow was supposed to confirm that foreign investors are not concerned about US inflation, and thus are adding to their holdings in droves, based on apples and oranges data.

What would the data look like if Blomberg had used a data series that is actually apples to apples, so that the December 2009 Chinese holdings of $894.8 billion data point is applicable?

Here is what Treasury data looked like pre-revisions (which includes the June 2009 and prior data as per the revised "Old Series" - luckily Zero Hedge now archives all obsolete, pre-revision government data just for these situations):

What is rather apparent is that instead of a surge from $894.8 billion to $1,160.1 billion, or a 30% increase in Chinese holdings, as incorrect as it may have been derived, using just the old data series, Chinese holdings actually declined to $891.6 billion! Of course, this calculation is also irrelevant as the US Treasury revised holdings halfway through the year, and therefore neither of these comparisons are actually relevant any longer.

But for the sake of argument, here is how the balance, and a refutation of the balance, of the Bloomberg 'hopefully not propaganda' piece would look like if one assumes that the apples to apples version is the appropriate one.

Version A - as it was written:

The nation bought more U.S. bonds even as its leaders criticized Bernanke’s plan for the Fed to buy $600 billion of Treasuries by June. Jesse Wang, executive vice president of China Investment Corp., the country’s $300 billion sovereign wealth fund, said Jan. 15 that devoting too much of its reserves to U.S. assets such as Treasuries was too risky.

“They remain extremely supportive for the Treasury market,” said Priya Misra, head of U.S. rates strategy at Bank of America Merrill Lynch in New York, one of the 20 primary dealers that trade with the Fed.

Version B - as passed through the Zero Hedge propaganda filter:

The nation did not buy more U.S. bonds because its leaders criticized Bernanke’s plan for the Fed to buy $600 billion of Treasuries by June. Jesse Wang, executive vice president of China Investment Corp., the country’s $300 billion sovereign wealth fund, said Jan. 15 that devoting too much of its reserves to U.S. assets such as Treasuries was too risky.

“They do not remain extremely supportive for the Treasury market,” said Priya Misra, head of U.S. rates strategy at Bank of America Merrill Lynch in New York, one of the 20 primary dealers that trade with the Fed.

As usual our warning stands: trust nothing you read in mainstream media. Unfortunately, as incidences of such data drift increase, one can be become very confused where the Department of Chinese Truth begins, and where the Department of US Truth ends...

PS While we have Bank of America head of rates Priya Misra on the line, we were hoping she could tell us how much of the upcoming BofA dividend will be funded from spread differential and capital appreciation on the bank's daily POMO activities courtesy of its Primary Dealer status. See, our monocultured pleadings for further disclosure in this matter have so far fallen on deaf ears, and we see Ms. Misra enjoys communicating with the media on topics she is well versed in.

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Translational Lift's picture

"Department of Truth is now actively manipulating "data" in our own backyard"

Heaven!   How could you possibly think they would ever do a thing like that??

The whole friggin thing (economy) is just one big scam now..........

Ray1968's picture

From Bloomberg of course.

You only have to watch Jane King doing the morning Bloomberg Market Update (carried on my local am news) to get your daily dose of Orwellian "truth" and sunshine before your feet hit the shower.

I swear to God, every morning it is nothing but smiles and positive spin on EVERYTHING. Never any reality. They have lost all credibility.

Guy Fawkes Mulder's picture

See Catherine Austin Fitts, see Damon Vrabel...

(this is advice in general to everyone)

Hell, see David DeGraw, Charlie Sheen, and Max Keiser (all together on one short thread).

We have a centrally controlled command economy, because of this debt-money system. Business always gets bigger. Government always gets bigger. This is because corporations have to get bigger to survive under this monetary system. The Red Judas Goats sell pro-business, anti-government hopium. The Blue Judas Goats sell the opposite.

The economy, the markets, the "government" as we know it all should have collapsed already in a relatively free market. The shadow government players and bankers upped the stakes to keep it all going, effectively taking central control of so many aspects of the economy.

So here we have the biggest psychotic corporation in world history, known colloquially as "the U.S." and propaganda is vital for its continuation. Go and listen to Catherine Fitts and Damon Vrabel. They can actually explain what is happening in the world, unlike the propaganda channels.

Michael's picture

I love Catherine. I always listen to her on AJ's infowars.

Guy Fawkes Mulder's picture

That's where I first saw her...

AJ brought me into what he calls the "infowar", but I don't listen to him hardly at all anymore.

Basically, I've learned to spot the actions of the NWO globalists without AJ pointing them out to me.

I do follow infowars on Twitter.

Honest question: Aren't you worried about Alex "Hear-no-See-No-Speak-no-Zionist-Conspiracy" Jones being a controlled opposition shill? I've been wondering about him more and more recently.

Michael's picture

To tell you the truth I like AJ's take on the situation. It's almost the same as I would say about it but with more tiger blood, and add some of the more obvious things everybody already knows about like the nepotism and the masters of deception thing. I first heard it really well articulated by him on 3/07/2011. AJ has to be a bit careful and articulate his position really well because the ADL will crucify you like they did to Charlie Sheen and others recently. The thing I don't like is the persecution for what the ADL deems inappropriate to them. That just indicates to me they own you so you better make sure you don't cross them because they are more powerful than you. Bullshit.

I've said the same thing as AJ before here, you never bring physical violence in hate of Jews or you have to deal with me first. That goes for Blacks, Whites, Latino, and every one else too.

Alex Jones Puts Anti-Semitic Caller in His Place!!

Guy Fawkes Mulder's picture

Cool, cool. Good link. Very appropriate. AJ makes a powerful good case there.

Gratuitous, unsettling thought, however:

On corporate radio music stations, every day, you can hear callers talking to DJs, requesting some song. The song has already started playing at low volume when the DJ starts talking to the caller -- it's the intro to the song and the lyrics haven't started yet. Miraculously, every single time, right when the caller says what song they want, the DJ gets in some last exciting comment and then the volume of the song goes up and the lyrics start.

They have the timing perfect because the caller has said his or her peace five, ten, thirty minutes ago. The DJ was just responding to recorded clips of the "lucky" caller. It sounds like a natural conversation to the listeners, but it is quite the opposite. Some people might not get what I'm saying but it's really simple. Any time those music stations have the DJs talking to the caller after the Lady Gaga song has started, the caller is not a live person: the "caller" is just recorded audio splices of someone who called in earlier to request Lady Gaga. It has to be this way otherwise you'd have Joe Six-Tooth mumbling and bumbling and generally fucking up the flow of the conversation that needs to happen before the Gaga lyrics start.

Whew, that was a long story, but you can flip on your commericial music entertainment radio stations today or tomorrow and see what I'm talking about.

And the point is that even Alex Jones talking to that retarded goon could be a radio set up in much the same way. Some Joe Six-Tooth could have called in an hour ago, talked to a screener, been recorded, and then they used audio clips from the conversation as material for Alex to deliver a great "I'm not a crypto-Zionist" speech. It really could be. Even the part where he says "Did we screen your call?" could be faked, easily. [h/t Tom Leykis]

But I don't know if it is or isn't, one way or the other. Sometimes I feel like it's more-than-50% likely that 2011 AJ is just a psyop controlled opposition... sometimes I feel like it's less-than. I feel the same way about ZH (ZH would be a prime investment for Goldman). I do know that paranoia can be more powerful than spirituality, and that anyone with basic lawyer skills can pull the Doubt Card on anything.

I also know that ZH and Alex Jones have given a ton of great, legitimate info.

See you next time, Michael.

(clip with Alex Jones calling Kabbalah "junk" and "crazy")

Guy Fawkes Mulder's picture

The moral of the story (and what I've heard from CAF and DV):

be your own leader

johnQpublic's picture

interesting take on things

i've got my AJ doubts too

good info spliced with Crameresque clownshow

i'm thinking if he was speaking 100% unbiased truth he would be long dead

just another tool?

every tool is not a hammer, every fastener is not a nail

whatsinaname's picture

Can somebody bailout Dynegy ? BK on da way !!

dick cheneys ghost's picture

israel wants another $20 billion from uncle sam.......

Pants McPants's picture

Yet another reason why ZeroHedge is the greatest website in existence.  Well done, Tyler(s)

Robot Traders Mom's picture

You are exactly right. Fuck it, I'm a zerohedge kool-aid drinker.

Fruit Punch bitchez

rocker's picture

+2 on the Punch and ZH is the Best.

Michael's picture

I continually underestimate the true value and genius of this precious national treasure called Zero Hedge, without which we would all be but scurried little beetles burrowing in the ground.

What I just fucking read blows me away.

Thanks TD.

cranky-old-geezer's picture

I'm a zerohedge kool-aid drinker.

I spend most of my internet time on ZH these days and I too appreciate the wealth of truthful relevant information here, emphasis on truthful and relevant.

However I don't drink anyone's kool-aid including ZH.  There is some real garbage here just like anywhere else, it doesn't come from Tyler, his posts are pretty spot on, it comes from some "contributors" Tyler allows here. 

Mercury's picture

Seriously, I think the Chinese have figured out that locking up your $US for 20-30 years with the US Treasury at these yields is a joke...

Can they/do they buy TIPS?

DonutBoy's picture

TIPS are a joke too.  We set the CPI.  One it comes time to screw every bond-holder and every recipient of a COLA-adjusted retirement benefit, we'll nail them all.

This is another great ZH post, de-spinning the spin.


themosmitsos's picture

Archiving, FTMFW! Tyler :) ... Necessary these days

nyse's picture

Well done.

The best lies are veiled in truth. Or truth speak.

Abitdodgie's picture

The Yuan the next world reserve , please place your vote

rocker's picture

+ Ruble and Gold.  China and Russia already trade with these triplets: Yuan, Ruble and Gold.

Bringin It's picture

ASEAN trade with China can be settled in RMB.

paleofartus's picture

Did anyone note and wonder about the Russian initiative to make Moscow an "international financial center" and engaging the banking brotherhood (Blankfein, as consultants? According to FT the boyz are going to Moscow to confer with Medyev.

TireBite's picture

Why should the yuan be the next reserve currency? Meet the new boss, same as the old boss. Highly manipulated, fiat currency.

Misean's picture

Violation of the Memory Hole!

buzzsaw99's picture

torpedos of truth running straight and true

Meme Iamfurst's picture

If you mean ZH and Tyler, I agree.

As for Bloomberg, they are getting to be the new CNBC..... and investors Daily, good to dround out the barking dog next door or wrap fish in...depending on your need.

Frankly, even npr and PRN are both getting a bit valley girl, and simply repeating the BS the government hands out with out a question. 

Coast Watcher's picture

This is why we come here. Outstanding work.

vonuistic's picture

Going with a long shot, revamped Greek Drachma

FeralSerf's picture

Zimbabwe dollars.  There's a scientific principle that states when you're on the South Pole, the only you can go is north.

Tortfeasor's picture

Regarding bonds and QE2/QE3 arguments:

Hasn't the Treas been over-financing the debt over the last 6-9 months?  I believe I rememeber seeing that report here a few times.  If that is the case, then QE3 is not a foregone conclusion, at least not immediately, as the .gov should be able to go some period of time before needing a larger infusion of cash (via issuing more debt).

That could give the Fed a little bit of wiggle room to stop QE2 and test the waters before implementation of QE3 is required.  My guess is that BB would hope that post-QE2 debt issuance is well-subscribed, so that the Treas can slowly increase debt issuance as funding problems approach.

Your thoughts?

Misean's picture

Nice theory. However, I believe the information indicates the gov blowing through money at a faster rate than expected.

Michael's picture

T minus 4 months till the US economy reaches critical mass. QE3 debt monetization is a 100% mathematical certainty.

US treasury yields continue to climb in anticipation. The cost of capitol to the Federal Government is going, so to speak, parabolic.

The dollar is toast in July. 

Fasten your seat belt boys, it's going to be a bumpy ride.

prophet_banker's picture

i agree rates will rise in the future, but i just read Tyler's POMO, and the 10 year treasury actually went down, not up!!! wow, guess markets can stay irrational longer than most can stay solvent.

narnia's picture

The Fed never put a maximum on QE2.  The official position is that they would purchase at least $600 billion.  The use of the "QE3" language is now a move on the chess board.  I suspect Bernanke will come out and declare himself the greatest inflation hawk of the century and not go through with QE3.  All along, QE2 will be que'd up ready to go any time he sees fit.  

Caviar Emptor's picture

Ben has become the biggest Televangelist in history: he preaches his gospel and the world joins hands and rocks and sings in rapture! It's a new paradigm for sure, this time it really is different, this is the dawning of a new era! Ben says "Throw out your worn economics texts, cast out the messengers of doom, open your hearts to the new clear dawn and take the Fed into your life forever!"

Translational Lift's picture

Like it or not......the Fed is in our life forever.........

Long-John-Silver's picture

It was an American that invented Propaganda.........

prophet_banker's picture

that's not fair, pervert sigmond freud's nephew edward bernays should be identified as israeli, not american.  Same with that prince andrew story, entertaining that pervert Epstein, who was identified as an american on bbc, when actually he is an israeli.  dual citizens my a**.

XPolemic's picture

Actually no. It was the Catholic Church who 'went out and propagated the faith' that gave rse to both the name and methods of propaganda.

It was an American who perfected it.

I found this to be quite a good summary.

Hysterical title, but the doc itself is quite measured and informative.

gwar5's picture

The level of deceitfulness means it's even worse than we think

Twindrives's picture

........Obama is the absolute master of deceit.....he is manipulated, yet manipulative..... on the surface a sincere leader, underneath a lying usurper........sinister destroyer of the Republic....and destroyer of all the values it's citizens' hold dear......articulate in his speech, dastardly in his deeds.... 

TooBearish's picture

Right on Ty! Vive La ZH!