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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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Tue, 03/08/2011 - 21:56 | 1031797 Translational Lift
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..........

Tue, 03/08/2011 - 22:34 | 1031879 Ray1968
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.

Tue, 03/08/2011 - 23:18 | 1031987 Guy Fawkes Mulder
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.

Tue, 03/08/2011 - 23:24 | 1031999 Michael
Michael's picture

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

Tue, 03/08/2011 - 23:50 | 1032053 Guy Fawkes Mulder
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.

Wed, 03/09/2011 - 01:34 | 1032212 Oh regional Indian
Oh regional Indian's picture

Thought this might be really worth taking a look at and sharing.


Wed, 03/09/2011 - 01:37 | 1032217 Oh regional Indian
Oh regional Indian's picture

Thought this might be really worth taking a look at and sharing.


Wed, 03/09/2011 - 02:46 | 1032269 Michael
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!!

Wed, 03/09/2011 - 03:37 | 1032301 Guy Fawkes Mulder
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")

Wed, 03/09/2011 - 04:55 | 1032342 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

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

be your own leader

Wed, 03/09/2011 - 08:52 | 1032471 johnQpublic
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

Wed, 03/09/2011 - 00:08 | 1032071 whatsinaname
whatsinaname's picture

Can somebody bailout Dynegy ? BK on da way !!

Wed, 03/09/2011 - 01:42 | 1032226 dick cheneys ghost
dick cheneys ghost's picture

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

Tue, 03/08/2011 - 21:53 | 1031801 Pants McPants
Pants McPants's picture

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

Tue, 03/08/2011 - 22:23 | 1031878 Robot Traders Mom
Robot Traders Mom's picture

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

Fruit Punch bitchez

Tue, 03/08/2011 - 23:02 | 1031962 rocker
rocker's picture

+2 on the Punch and ZH is the Best.

Tue, 03/08/2011 - 23:19 | 1031990 Michael
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.

Wed, 03/09/2011 - 09:56 | 1032627 cranky-old-geezer
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. 

Tue, 03/08/2011 - 21:57 | 1031805 Mercury
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?

Tue, 03/08/2011 - 23:11 | 1031975 DonutBoy
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.


Tue, 03/08/2011 - 21:58 | 1031813 themosmitsos
themosmitsos's picture

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

Tue, 03/08/2011 - 22:00 | 1031818 nyse
nyse's picture

Well done.

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

Tue, 03/08/2011 - 22:00 | 1031823 Abitdodgie
Abitdodgie's picture

The Yuan the next world reserve , please place your vote

Tue, 03/08/2011 - 23:06 | 1031968 rocker
rocker's picture

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

Wed, 03/09/2011 - 01:57 | 1032242 Bringin It
Bringin It's picture

ASEAN trade with China can be settled in RMB.

Wed, 03/09/2011 - 10:37 | 1032770 paleofartus
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.

Wed, 03/09/2011 - 07:42 | 1032388 TireBite
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.

Tue, 03/08/2011 - 22:07 | 1031838 Misean
Misean's picture

Violation of the Memory Hole!

Tue, 03/08/2011 - 22:08 | 1031843 buzzsaw99
buzzsaw99's picture

torpedos of truth running straight and true

Wed, 03/09/2011 - 08:24 | 1032417 Meme Iamfurst
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. 

Tue, 03/08/2011 - 22:10 | 1031845 plocequ1
plocequ1's picture


Tue, 03/08/2011 - 22:14 | 1031853 Coast Watcher
Coast Watcher's picture

This is why we come here. Outstanding work.

Tue, 03/08/2011 - 22:15 | 1031854 vonuistic
vonuistic's picture

Going with a long shot, revamped Greek Drachma

Tue, 03/08/2011 - 23:35 | 1032017 FeralSerf
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.

Tue, 03/08/2011 - 22:14 | 1031856 Tortfeasor
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?

Tue, 03/08/2011 - 22:16 | 1031862 Misean
Misean's picture

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

Tue, 03/08/2011 - 23:59 | 1032065 Michael
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.

Wed, 03/09/2011 - 01:24 | 1032204 prophet_banker
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.

Wed, 03/09/2011 - 04:31 | 1032328 spdrdr
spdrdr's picture


"I" comes before "E" except after "C".

Wed, 03/09/2011 - 00:08 | 1032070 narnia
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.  

Tue, 03/08/2011 - 22:15 | 1031860 Caviar Emptor
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!"

Tue, 03/08/2011 - 22:25 | 1031880 Translational Lift
Translational Lift's picture

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

Tue, 03/08/2011 - 22:32 | 1031900 Caviar Emptor
Caviar Emptor's picture

Isn't it wonderful ? 

Tue, 03/08/2011 - 22:17 | 1031861 Long-John-Silver
Long-John-Silver's picture

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

Wed, 03/09/2011 - 01:27 | 1032207 prophet_banker
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**.

Wed, 03/09/2011 - 02:32 | 1032265 XPolemic
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.

Tue, 03/08/2011 - 22:17 | 1031863 gwar5
gwar5's picture

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

Wed, 03/09/2011 - 00:42 | 1032142 Twindrives
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.... 

Tue, 03/08/2011 - 22:17 | 1031865 TooBearish
TooBearish's picture

Right on Ty! Vive La ZH!

Tue, 03/08/2011 - 22:19 | 1031867 letsgetreadytorumble
letsgetreadytorumble's picture

While the band plays on.........................   Maine - The federal government Tuesday granted Maine a waiver of a key provision in President Barack Obama's health care overhaul, citing the likelihood that enforcement could destabilize the state's market for individual health insurance........... YES THAT IS THE STATE  MAINE!! 

Tue, 03/08/2011 - 22:19 | 1031868 ReallySparky
ReallySparky's picture

Round of Applause. Excellent article.

Wed, 03/09/2011 - 09:20 | 1032544 ivana
ivana's picture

+1 Tyler The Great

Tue, 03/08/2011 - 22:20 | 1031869 dick cheneys ghost
dick cheneys ghost's picture

China and Oil and why the chinese have military assets off the libya coast

Tue, 03/08/2011 - 22:23 | 1031872 bob_dabolina
bob_dabolina's picture

I don't agree with the premise.

Other then that, I have no further concerns.


Tue, 03/08/2011 - 22:24 | 1031876 RoRoTrader
RoRoTrader's picture

Good luck to regular readers/writers of/for Bloomberg aspiring to levitate thinking to critic the Zero Hedge.

Hope and change.

Tue, 03/08/2011 - 22:25 | 1031883 KickIce
KickIce's picture

"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..."

Anymore the only things real are those items you have in your possession.  It is a mistake to take anything for granted, and in particular food.  The markets are nothing but an illusion.

Wed, 03/09/2011 - 10:04 | 1032639 slewie the pi-rat
slewie the pi-rat's picture

yep, kickIce.  the mail and the check may be unavoidably delayed.

tyler found a "difference that makes a difference" in the "revisions" of these data-arrays.

...and the grand total for today IS...hey!  if this is an accounting problem aren't we s'posed to get 2-3 significantly different answers? 

furthermore, if we need to adjust FRN's for different types of counterfeit products, wanna buy my signed Moses "Mages Of The Ages" card?  huh?  it even has the authenticating hologram!

and,  we now see that slewie, while patting Tyler's sweaty little head, is wondering:  if the Pentagon's finances can get so screwed up as to be unauditable (which they have, btw), and here we are relying on Treasury for unaidited FED and Chinese holdings, and there may be counterfeit bonds, notes and bills involved, and the "slop" in the accounting may be in the $100 bil-to-$1 Tril range, and oh man!  it just dawned on me that THIS (goobermint debt) was the original huge "failure" trade in the first place, was it not? 

as i recall, wasn't there a "turn" of some type in a market or three, and "flight" to perceived safety, probably with bloomie-or-higher-state trading platforms front- and ass-ramming every order, "wealth" disappearing b4 our very eyes, and then there was a small problem:  some of these "trades" would not clear.

in other words, there was a big problem in the markets for Treasuries, with fraudulent trading/straw man trading, and counterparty failure.  they're probably still investigating @ the SEC and DOJ, and designing the meaningless wrist-slaps as i write. 

dept of truth?  KickIce sez: the only things real are those items you have in your possession.  slewie sez:  Bingo!

Tue, 03/08/2011 - 22:34 | 1031901 Caviar Emptor
Caviar Emptor's picture

Interest expense on debt outstanding, FY 2010:


QE3, wheeee!

Tue, 03/08/2011 - 22:34 | 1031904 Sad Sufi
Sad Sufi's picture

Thank you Tyler.  I had read your story in Feb., and then heard the "good news" via Bloomberg and not done the mental double take. Propaganda is slippery, even to an old cynic like me.

Tue, 03/08/2011 - 22:40 | 1031919 The Axe
The Axe's picture

thanks for watching....ever awake...the eye never sleeps.

Tue, 03/08/2011 - 22:43 | 1031923 George Huxley
George Huxley's picture

What would cause a revision between the UK and China of such a large number? Is it a coincidence that they are nearly the same number?

Tue, 03/08/2011 - 22:45 | 1031928 pacu44
pacu44's picture

Are you saying this is right out of Joseph Goebbels playbook?



Great piece!

Tue, 03/08/2011 - 22:50 | 1031940 monopoly
monopoly's picture

Tyler, Well Done Sir. TY

Tue, 03/08/2011 - 22:53 | 1031945 zaknick
zaknick's picture

So China did reduce its holdings. So this just kinda comes out by the way?


I guess we're here to hear you folks' opinions. I could have been confused by looking at your Twitter feed which looks like a newswire folks depend on for trivial things such as survival.



Tue, 03/08/2011 - 22:52 | 1031946 rubearish10
rubearish10's picture

Had to read it twice and well worth it! Super piece ZH!

Tue, 03/08/2011 - 23:07 | 1031969 tom
tom's picture

The Treasury publishes real breakdowns of foreign holdings of Treasuries by nation once a year, in March, as of the end of the previous June. Yep, only once a year, and with an eight-month delay.

Treasury also publishes rough estimates on a monthly basis of the total amount of Treasuries held by all foreigners. For example, the monthly estimate for June 2010 proved to be off by "only" $67 billion compared to the just published annual report.

The Fed also publishes accurate numbers for the amount of Treasuries held by all foreign central banks in Fed custody. This is not all Treasuries held by foreign central banks, but the trend is very informative, and even gives a pretty good indication of what China is doing, since China usually accounts for almost half of all foreign central bank buying of Treasuries.

And on top of that, Treasury publishes complete horse-hockey estimated breakdowns of foreign holdings of Treasuries by nation on a monthly basis. These have proven to be totally useless time and time again, because they track only most kinds of foreign buying from domestic sellers, and don't track foreign buying from foreign sellers at all. Anybody who bases any reporting or analysis on these is only making an idiot of himself.

Wed, 03/09/2011 - 00:48 | 1032148 NaN
NaN's picture

Thank you, tom, for the perspective on the monthly foreign holdings variability/inaccuracy.

Non-binding estimates leave a lot of room for monkeying.


Tue, 03/08/2011 - 23:16 | 1031985 frosty zoom
frosty zoom's picture


to whit:

Cotton prices drive up cost of dollar bills

A Bureau of Printing and Engraving employee holds sheets of one dollar bills prior to cutting. (AP/Hillery Smith Garrison)

Sure, packs of T-shirts and socks are getting expensive because of skyrocketing cotton prices. Guess what else is made of cotton? The dollar bill in your wallet. In 2010, the cost of making one note jumped 50 percent from what it cost the government in 2008.

The government produced 6.4 billion new currency notes last year. Each one cost 9.6 cents to produce, including the cost of paper and printing.

In 2008, it only cost 6.4 cents a note, a tiny bit more than it did in 2007, according to the U.S. Bureau of Engraving and Printing.

With the price of raw cotton at a 140-year high, things could get worse.

It’s unclear for now how much more it might cost the U.S. to make dollar bills. However the U.S. Government Accountability Office said paper costs “are a significant portion of the cost of producing $1 notes, but less than half the total cost.“

Ordinary paper used in newspapers, books and cereal boxes is primarily made of wood pulp. But the paper on which the greenback is printed is composed of 75 percent cotton and 25 percent linen, according to the U.S. Bureau of Engraving and Printing.

The U.S. buys its currency paper from Massachusetts-based Crane & Company. Crane declined to comment on the story, citing the paper product as “strategic material.“


Tue, 03/08/2011 - 23:19 | 1031991 Caviar Emptor
Caviar Emptor's picture

Hoard cash as a play on commodities 

Tue, 03/08/2011 - 23:51 | 1032055 frosty zoom
frosty zoom's picture

i'll start with those chocolate coin things.


Tue, 03/08/2011 - 23:32 | 1032014 reader2010
reader2010's picture

You forgot China's RMB, that is also 75% cotton. Physically, they have printed the most than all other nations combined since 2009.

Tue, 03/08/2011 - 23:50 | 1032049 frosty zoom
frosty zoom's picture

egad!  money's not kosher (or halal).

from qwiki:

"Unlike most printing and writing paper, banknote paper is infused with polyvinyl alcohol or gelatin to give it extra strength."


Wed, 03/09/2011 - 01:36 | 1032214 prophet_banker
prophet_banker's picture

i recently saw some australian dollars, they've got plastic or rubber or something in em, you can crumple them and they bounce right back

Wed, 03/09/2011 - 04:39 | 1032333 Bear
Bear's picture

Ah good money ... Kinda like the Federal Reserve Note ... bouncy

Wed, 03/09/2011 - 01:38 | 1032218 prophet_banker
prophet_banker's picture


Tue, 03/08/2011 - 23:42 | 1032032 High Plains Drifter
High Plains Drifter's picture

Anybody checking out Sheen at Sheen's corner.  Weird ,  Ha ha ha

Tue, 03/08/2011 - 23:47 | 1032037 A_MacLaren
A_MacLaren's picture

Has anyone verified if the cited authors of the article, are in fact the authors?  Nom de plume and all that...

Has anyone determined the whereabouts of Bagdad Bob, aka The Iraqui Minister of Information?

Tue, 03/08/2011 - 23:48 | 1032043 Reese Bobby
Reese Bobby's picture

Bloomberg News has been a joke for a long time now.  All news is either spun positively or it is ignored.  The example sighted here is the norm, not the exception.  We used to make fun of individual stories at work but the stupid spin is now so pervasive it is just boring and insulting.  Bloomberg makes CNBC look objective.

And don't smoke in the Park!

Tue, 03/08/2011 - 23:57 | 1032059 MsCreant
MsCreant's picture

I maybe should not give the benefit of the doubt, but here goes. I have sat in on masters and doctoral defenses (and post defense presentations) where they did all this fancy statistical modeling in situations where they had the data for the entire population. I am not a quant, but I got to ask, from the audience, "What are stats for?" In which case the stunned candidate gave me the rote definition which included sampling to infer about a population. Then I got to make the oh so easy kill. "What do you have the data points for?" Answer: "A population." I say: "Then why are you doing inferential statistics?" It's like shooting fish in a barrel.

Point? If the "Chairs" of doctoral committees and "whole committees" are missing crap like this, why should we expect the press to catch it when there is this kind of failure to notice inconsistencies like revised numbers? I'm telling you dumb shit happens constantly in the academy. I have had the role I described three times now, on the exact same issue. Why would the press be better?

Wed, 03/09/2011 - 00:18 | 1032087 ebworthen
ebworthen's picture

Funny, thank you.

My favorite question I ever got was "So?"

You have theories and statistical models and...?

"So what...?"

It's not what reality is, it is what the perception of the current reality is for your target population and is it statistically relevant within the confines of your population?  Ugh.

Throw in moral hazard and unforseen consequences and...


Wed, 03/09/2011 - 00:51 | 1032152 mark mchugh
mark mchugh's picture

You're so right, Missy.

Nobody but nobody really looks at the data.  I seriously doubt there are more than a hundred people on this planet that have actually spent more time than me actually looking at the data.  Unfortunately, I'm pretty dumb and smoked too much weed during my formative years, but I can tell you some things about the TIC data.

It's like a shell game.  It takes treasury 2 months after the quarter end to account for less than half of the newly issued debt (they fill out 5 of the twelve columns).  Next quarter, the lion's share of the as yet unaccounted for Treasuries gets parked in the "other investors" column.  In the third quarter, they start distributing the "other investors" money to other columns (aka revisin'), cause "other investors" being the #1 holder of US debt might raise an eyebrow or two.

"Private Pensions" is a big favorite.  Who's private pension? I'll leave that to your imagination (BTW the Fed's breakdown says it isn't Federal gov't pensions - and don't get me started as to why federal employee pensions are counted as private pensions).  GSEs have bought a wad of Treasuries too recently (don't ask me how that works).  And as we all know, the UK was credited with retarded amounts of Treasury buys in the last year.  So was Canada, Egypt and others but no one seemed to notice that.

So even delaying the actual release of any data 9 months, the best Turbo could do was put out a report that EVERYBODY (even Mish) knew was absolute garbage.  So they started floating the "England is China" meme, because if England wasn't China, that would mean the US debt market was 100% fraudulent.  Notice that China, nor the agent banks confirmed this little conspiracy theory.  So my question is "Was the Treasury data full of shit before, or is it full of shit now?"  China's still not talking.

Oh, there is one other little detail - with the way Treasury uses "other investors" as a holding cell, and drags their feet releasing data, the purchases just revised are more than a year old, and the Treasury is about $750 Billion behind in this little game of pin the tail on the donkey.  I just imagine Turbo and Bennie trying to stuff these things in every crevice until the whole building explodes.

At some point, you have to ask yourself, "Could this story possibly be true?"  More than $500 dollars in debt for every man, woman and child in America per month finding eager buyers, month after month after month.

And why don't any of these "professional journalists" notice the absurdity?

Wed, 03/09/2011 - 03:01 | 1032291 poydras
poydras's picture

I attempted for months to foster focus on the Canadian increases prior to the revisions.

Wed, 03/09/2011 - 09:38 | 1032588 mark mchugh
mark mchugh's picture

Nice to know someone else out there is actually looking at the data.  Sorry I didn't see your posts.  Tell me, Poydras, do you believe this fairy tale?

Wed, 03/09/2011 - 00:13 | 1032079 ebworthen
ebworthen's picture



Foreign governments?


"I'm sorry Dave, MSM says 'Does not compute'...and I still cannot open the pod bay doors...I have this strange feeling everything will be allright..."


Wed, 03/09/2011 - 00:19 | 1032090 Scorpio69er
Scorpio69er's picture

There's even more propaganda here.

From the cited article: Last month, indirect bidders, the class of buyers that includes foreign central banks, bought a record 71 percent, or $17 billion of the $24 billion in 10-year notes offered at the auction.

However, as we read in the JUNE 26, 2009 article from the WSJ, entitled Is Foreign Demand as Solid as It Looks?:

The sudden increase in demand by foreign buyers for Treasurys, hailed as proof that the world's central banks are still willing to help absorb the avalanche of supply, mightn't be all that it seems.

When the government sells bonds, traders typically look at a group of buyers called indirect bidders, which includes foreign central banks, to divine overseas demand for U.S. debt. That demand has been rising recently, giving comfort to investors that foreign buyers will continue to finance the U.S.'s budget deficit.

But in a little-noticed switch on June 1, the Treasury changed the way it accounts for indirect bids, putting more buyers under that umbrella and boosting the portion of recent Treasury sales that the market perceived were being bought by foreigners.

The new definitions are deep in the arcane world of Treasury auctions. The change involves buyers who place orders through primary dealers. Those had been counted as direct buyers, but as of June 1 they were classified as indirect buyers, making that group larger than before. Because investors view that group as being dominated by foreign buyers, they assumed foreign demand was higher.

Treasury officials didn't respond to requests for comment. (MORE)

Wed, 03/09/2011 - 01:09 | 1032184 mark mchugh
mark mchugh's picture

Nice catch, Scorp.

Treasury officials never respond, trust me on that one.

Wed, 03/09/2011 - 00:20 | 1032094 somethingelse
somethingelse's picture

Excellent catch TD.  Great work!

Wed, 03/09/2011 - 00:24 | 1032107 seek
seek's picture

I just made my $50 donation (I think I average about two a year.)

I challenge everyone else to donate to keep this type of content coming.

Donate link's at the top of the page, folks. Click it!

Wed, 03/09/2011 - 00:30 | 1032122 alexwest
alexwest's picture

well what did you expect from company that sell finanicial shit in city which so-called financial capital of the world, and major of this city is OWNER SAME COMPANY AND possible next president of USA


Wed, 03/09/2011 - 00:51 | 1032150 locinvestor
locinvestor's picture

I used to watch Bloomberg's overnight shows (morning in Asia). Finally though I stopped. Part of it was the silliness of people like Jim Rogers playing along with their "in-depth analysis". It's kind of sad that people like him feel they have to put up with this from Bloomberg, CNBC or whoever to maintain their "status" (for lack of a better phrase) as a global player.

Now, almost all of my accurate news (esp. business) comes from abroad. You just have to know where to look.

Wed, 03/09/2011 - 01:40 | 1032224 AldoHux_IV
AldoHux_IV's picture

There unfortunately isn't any news outlet out there anymore worth a damn.  It's all government and fed propaganda because the corporations and banking cartel don't want you to know the truth otherwise you might think twice about facebooking on your new ipad on the way to take out a loan.

The fed and its network of banking cronies are the buyers of debt and therefore through the IMF enslave the rest of the world.  Good thing there's always a nuke option regarding that worthless paper.

Wed, 03/09/2011 - 02:55 | 1032284 poydras
poydras's picture

There is really no way to prove that real savings from a real country are purchasing Ts.  Regulations, ratings, and accounting rules allow for almost any investment level.  There really is no impediment to a country propping up its own bond complex or China divesting via SPEs.  Scary...

Wed, 03/09/2011 - 04:34 | 1032330 Moon Pie
Moon Pie's picture

Ooph.  Forecast is for high heat and hard rain. 

"Gentlemen, he said, I don't need your organization, I've shined your shoes
I've moved your mountains and marked your cards.

But Eden is burning.

Either brace yourself for elimination or else your hearts must have the courage for the changing of the guards."  - Bob Dylan

Hard to add to that.

Wed, 03/09/2011 - 05:20 | 1032348 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

So yeah. I guess we are are a pessimistic group, most ways you look at it.

There is, however, the possibility that we are merely describing a "pessimus" (worst) reality somewhat accurately. More accurately than MSM. It's all for you to decide, individually.

I think the lack of a major American revolution is the only thing left holding back a world revolution.

But I could be wrong. I could be looking at things negatively.

Ponzis only have to end some day... not necessarily soon.

Wed, 03/09/2011 - 06:50 | 1032378 gordengeko
gordengeko's picture

Thanks TD, keep that light coming. A lot of fools and trolls out there. To borrow a phrase from CS.

Wed, 03/09/2011 - 07:01 | 1032380 Miles Kendig
Miles Kendig's picture

In reality Kurtzmann (who actually represents the FED – SEC – CFTC – FDIC – OTS – COTC – FBI – Congress – Courts - whatever administration is in power and all the rest) is off streaming porn from behind that frosted glass.

Simply leaving the all too obvious "main stream media" off my list was a gross oversight.  Especially since one of the core missions of ZH is:

to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become.

I would like to note that journalism, like law, finance, accounting, corporate & public governance, education and others are populated with many talented and dynamic folks whom I hold in great, if not supreme regard.  Fact remains that our professions have become so captured by their corruption that I am left to wonder IF the intestinal fortitude necessary to pull these professions through their My Lai moment can be mustered. 

I for one remain hopeful as the corrupted corpse that this article illuminates does much to further the processes of awaremess and correction.  After all, folks demonstrate their corruption far better through their own action, or lack of same if one only choses to remain vigilant.   All one need do is step away for  a moment to make the stench of corruption overwhelming upon ones return.  Kinda like taking that first step back into an industrial hog or poultry operation after a prolonged absence.

In this the journalism reflected in the referenced Bloomberg article has forgotten what journaling is all about.  No small wonder "alternate media" is enjoying such success.  If what this BBG article represents is the profession of journalism no wonder folks are puking it right back up.

Wed, 03/09/2011 - 09:55 | 1032622 velobabe
velobabe's picture

miles, you forgot the


Wed, 03/09/2011 - 16:10 | 1033744 Miles Kendig
Miles Kendig's picture

Velo- bebee They're more sub-conned than the media is.  Back to their undercover action we discussed some weeks ago, that even these servants don't get -- yet

Keep on bringin' it velo as ya know it

You'll find the right hook out there somewhere - And with greater aplomb than the aforementioned lost souls that are still pretending, and tending their window dressing

Wed, 03/09/2011 - 07:54 | 1032391 El Hosel
El Hosel's picture

    "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."

          Goldilocks numbers, cooked just right for the desired "market" reaction.... The "market" that "oh by the way" has an 88% correlation to big daddy's digital dollar infusions.


Wed, 03/09/2011 - 07:57 | 1032394 Miss Expectations
Miss Expectations's picture

The thing about numbers is that if you torture them, they'll tell you anything you want to hear.

Abu Bloomberg.

Wed, 03/09/2011 - 08:10 | 1032400 We need Geronimo
We need Geronimo's picture

This is one of the best articles / threads I have ridden in a while. Thanks all - nice to wake up to "hope"...

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