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Yet Another Opinion On The Mystery Direct Bidder, Barclays Edition
A topic we have been investigating recently has been the sudden surge in direct bidding, at least as it pertains to the near end of the Treasury curve, and what the identity of the actual entity doing the buying may be. Explanations offered have ranged from China and Petrodollar accounts buying covertly, to primary dealers ramping up their activity to justify to the Fed that they are worthy for admission, all the way to the Fed conducting yet more 'under the radar' QE purchases. Today we present the opinion from Barclays, which provides another, fourth, view on things, theirs being the most benign one, namely that plain vanilla accounts have been purchasing Treasuries via the direct bid.
Ultimately, as the end-identity of the direct bidder is never disclosed, this is yet more speculation. Yet, as we disclosed, with an up to $700 billion hold that needs plugging on the demand side, the Treasury needs any and every possible source of interest for bonds. We highlighted why we believe mutual funds and money managers will likely prove to be a drop in the bucket in light of ths supply onslaught. Furthermore, we have yet to see a pick up in direct interest toward the dated side of the curve, which is by far the greatest wildcard in terms of UST demand.
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So, in other words, Bill Gross is F'ed.
I think he's smoking something.
Still think its a Euro sovereign hedging against EOE (End of Euro).
Why is the identity of purchases made from the "people's treasury" not disclosed? Why can't we simply ask Treasury officials to disclose, at a minimum, the category type of percentage purchasers? Is it some kind of fucking national security secret? What, are we Swiss bankers now? This is top-to-bottom bullshit. Who says we can't know? Someone needs to file a FOI request.
Grrr..... I keep coming close to finishing up my opinion and y'all keep giving great damn summaries... however you'll be interested in mine when I finish because it basically slams the treasury for their inability to 1. add 2. keep records and 3. tell the truth
Anyways, it'll be soon hopefully, but as more info comes out I'm so behind the power curve, lol.
hi Tyler,
why all this rumors about the mistery bidder?
why it could be china or some non goverment entities?
I think mistery bidder could only be the Fed itself, via opaque and offshore financial centers.
This is europe 2020 team opinion too (as you can read in their geab 42 report).