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Chinese Treasury Holdings Decline For Fifth Month In A Row, Biggest Drop Since November 2010

Tyler Durden's picture





 

At 9 am, Treasury released its March TIC (international funds flow) data. While the headline number of $116 billion in total net TIC flows was slightly higher than February at $116.0 billion compared to $97.7 previously, the net number (offset by US transactions in foreign securities) missed expectations of $33 billion, printing at $24 billion. Notably, of the $116 billion in foreign flows into US securities, foreign central banks were ($10) billion (and privates were $126 billion), indicating that the central banker cartel may be in need of some additional funding soon. Net foreign purchases of long-term U.S. securities were $54.7 billion. Of this, net purchases by private foreign investors were $44.9 billion, and net purchases by foreign official institutions were $9.9 billion. Foreign holdings of dollar-denominated short-term U.S. securities, including U.S. Treasury bills and other custody liabilities, decreased $18.3 billion. Foreign holdings of U.S. Treasury bills decreased $21.9 billion. And while we will provide a full breakdown later in the day, the key trend in US paper holdings continues to be China, whose total US debt holdings dropped for the 5th consecutive month in a row at $1144.9 billion, and the largest one month decline since November 2010.

 


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Mon, 05/16/2011 - 09:20 | Link to Comment snowball777
snowball777's picture

More for you, Ben! - Hu

Mon, 05/16/2011 - 09:23 | Link to Comment SheepDog-One
SheepDog-One's picture

Maniacal Monetizers continue printing and buying our own debt, we are now the #1 lender to ourselves. Wow you ever seen someone going thru the throes of heroin cold turkey? Not a pretty sight....hell awaits.

Mon, 05/16/2011 - 09:25 | Link to Comment augie
augie's picture

And there goes the /dx and any hope of me getting out of my slv puts for anything over 50$. Now I can go buy myself a ham sandwich and a beverage, that is, if i can find an old lady to rob.

Mon, 05/16/2011 - 09:27 | Link to Comment MonsterZero
MonsterZero's picture

And what did they do with this new found wealth?

Mon, 05/16/2011 - 09:26 | Link to Comment SheepDog-One
SheepDog-One's picture

Bought oil and gold I sure.

Mon, 05/16/2011 - 09:32 | Link to Comment Sudden Debt
Sudden Debt's picture

They went for security and bought Euro bonds... :)

SUCKERPUNCH!

 

Mon, 05/16/2011 - 09:40 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Perhaps the Monetary Union won't be long-lived as explained by Mr. Farage.

May it come down.. Bring it down, baby, all of it!!

Mon, 05/16/2011 - 09:43 | Link to Comment SheepDog-One
SheepDog-One's picture

Chinese are buying their piece of Europe too, yes, theyre already done busting out the US with loan binges.

Mon, 05/16/2011 - 09:41 | Link to Comment Overflow-admin
Overflow-admin's picture

Are you saying that it might blow in their faces?

Mon, 05/16/2011 - 10:40 | Link to Comment TheTmfreak
TheTmfreak's picture

Actually they invested it in a money market mutual fund, then re-invested the earnings into foreign currency accounts with compounding interest..... aaaaaaaand its gone.

Mon, 05/16/2011 - 09:58 | Link to Comment vxpatel
vxpatel's picture

they bailed out greece and other 3rd world economies...and bought Africa.

Mon, 05/16/2011 - 09:34 | Link to Comment ThisIsBob
ThisIsBob's picture

Well they do have Bill Gross doing analysis for them - and for free.

Mon, 05/16/2011 - 09:27 | Link to Comment dbach
dbach's picture

Anyone know how bonds have been able to maintain their rally despite these big sellers (Pimco & China)? Its not just the Fed...

Mon, 05/16/2011 - 09:33 | Link to Comment Badabing
Badabing's picture

Don't forget Japan

Mon, 05/16/2011 - 09:27 | Link to Comment dbach
dbach's picture

Dbl post

Mon, 05/16/2011 - 09:31 | Link to Comment monopoly
monopoly's picture

It is all coming together. Patience guys, long way to go. A little bit at a time until it all blows up.

Mon, 05/16/2011 - 09:28 | Link to Comment Tycho.D
Tycho.D's picture

If I were them, I'd be dumping the dollar just it a little bit (maybe a lot) faster than that.

Mon, 05/16/2011 - 09:28 | Link to Comment uhb
uhb's picture

bought physical gold

Mon, 05/16/2011 - 09:34 | Link to Comment achmachat
achmachat's picture

i think this might actually have been a real dip.

Mon, 05/16/2011 - 09:30 | Link to Comment Quintus
Quintus's picture

Nevertheless, Ben can stop buying Treasuries anytime he likes. Oh yes. He doesn't have a printing problem, and what's more he definitely isn't in denial about it.

Mon, 05/16/2011 - 09:30 | Link to Comment DougM
DougM's picture

An apparent decline in Chinese holdings... till the inevitible revision. 

Mon, 05/16/2011 - 09:44 | Link to Comment SheepDog-One
SheepDog-One's picture

So you think theyre actually buying more?

Mon, 05/16/2011 - 10:03 | Link to Comment DougM
DougM's picture

They are buying via the UK.  Expect another series revision this summer.

http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/...

Mon, 05/16/2011 - 10:06 | Link to Comment unky
unky's picture

WHen I studied this: http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/... that also made me think how reliable the data is? How the chinese treausry holdings jumped $300 billion because of reporting issues or what? I mean, either they borrowed 800 billion or 1100 billion, no matter how it is reported. But I guess this belongs to the giant ponzi scheme

Mon, 05/16/2011 - 11:00 | Link to Comment Urban Redneck
Urban Redneck's picture

The nominal total is less important except to  those who trade the headlines.  China's F/X reserves grow very month, and at the end of year if their US bond holdings have not increased by at least the same % then they are in effect diversifying away from US government debt.

Mon, 05/16/2011 - 09:32 | Link to Comment TraderMark
TraderMark's picture

Is this the real reason copper prices have fallen off a cliff the past month?  No more "copper as financing" in China as regulators there actually do their job, unlike ours?

 

http://www.fundmymutualfund.com/2011/05/is-this-reason-for-drop-off-in-c...

Mon, 05/16/2011 - 09:59 | Link to Comment metastar
metastar's picture

So, from the Oct peak to March, the Chinese reduced their holdings by less than 2.6%, (or 6.2% annualized if the trend continues at this pace).

They are on the move.

Mon, 05/16/2011 - 10:20 | Link to Comment FEDbuster
FEDbuster's picture

Takes awhile to turn a big ship around. 

I don't trust any numbers coming from the Treasury at this point.  China is buying up Africa, South America, etc...  Plus, they have their own little real estate bubble popping now.  I imagine the number is much greater than -6%, but we will never know.  We are living in the Orwellian "1984" nightmare now.

Mon, 05/16/2011 - 11:01 | Link to Comment metastar
metastar's picture

Agreed. I don't trust much out of our own gov't either.

I haven't traveled on a commercial flight since they've started the rape downs. Unfortunately, most of my countrymen are too sheepish to take a stand.

Mon, 05/16/2011 - 10:21 | Link to Comment Sherman McCoy
Sherman McCoy's picture

OMFG! The Chinese are selling! The Chinese are selling! Who will buy our Treasuries now!

 

Last time I checked, anybody who sold Treasuries short lately has lost their a$$

Mon, 05/16/2011 - 10:41 | Link to Comment Quintus
Quintus's picture

You mean like the PD's who've flipped hundreds of billions of them to Ben in recent months?  I reckon they've done rather well selling treasuries, actually.

Mon, 05/16/2011 - 10:39 | Link to Comment writingsonthewall
writingsonthewall's picture

At last - some sanity from the Chinese.

 

Watch the rest follow suit - I fear the Dollar is in real trouble....

Mon, 05/16/2011 - 13:20 | Link to Comment topcallingtroll
topcallingtroll's picture

You cant cause too much trouble for the dollar if your mercantilist economy and riot prone populace depend on it.

Mon, 05/16/2011 - 14:14 | Link to Comment kito
kito's picture

can anyone explain why they were at lows in mid 2010, gained, and are now falling? what could have been the mindset of the chinese to increase holdings towards the end of 2010?

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