"In Feb 2013, Fed Will Buy 75% Of New 30y Treasury Supply"

Tyler Durden's picture


We urge readers to read the bolded section below, which comes straight from this quariter's Treasury Borrowing Advisory Committee (i.e., Primary Dealers) presentation to the Treasury Department, and explain, with a straight face, just how the Fed will ever be able to not only stop monetizing debt and injecting $85 billion of flow into the stock market, but actually sell any holdings.

Federal Reserve Holdings (1 of 2)

As of Dec 26, 2012 the Federal Reserve System Open Market Account (SOMA) held approximately $300 billion in 21+ year US Treasury debt

  • SOMA holds 41% of the 30y Treasury bonds issued since 2009
  • In Feb 2013, Fed will buy 75% of new 30y Treasury supply

Twist and QE operations have significantly lengthened the WAM of the Fed’s SOMA portfolio

The Fed currently owns 29% of all marketable 10yr Equivalents outstanding

Full TBAC presentation:

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Thu, 02/07/2013 - 16:48 | 3224065 NoDebt
NoDebt's picture

That's why they call it a "Liquidity Trap".  Very difficult to stop once you start.  Also known as "addiction to printing money."


Thu, 02/07/2013 - 16:57 | 3224113 Meat Hammer
Meat Hammer's picture

When the only money you have is debt you can't pay off your debt because you would have no money.  

Except for gold and silver.

Thu, 02/07/2013 - 21:38 | 3224795 Seer
Seer's picture

Yup!  It was ALWAYS a road to hell.  And now that the growth music has stopped there will be a huge shortage of chairs available.

Thu, 02/07/2013 - 16:48 | 3224068 vote_libertaria...
vote_libertarian_party's picture

How odd.  I thought everything was smooth sailing and hunky doorey.

Thu, 02/07/2013 - 16:49 | 3224069 Water Is Wet
Water Is Wet's picture

Take that BOND VIGILANTES!  Go Fuck Yourselves!  lololololol


Twat Bernank

Thu, 02/07/2013 - 16:49 | 3224070 dbTX
dbTX's picture

A Spring time of recovery. Can we get Paul Voulker back on the job?

Thu, 02/07/2013 - 17:25 | 3224204 Liquid Courage
Liquid Courage's picture

Think he'd take it?

Wanna bet?

Thu, 02/07/2013 - 16:49 | 3224071 Bagbalm
Bagbalm's picture

Call us the boot-strap nation.

Thu, 02/07/2013 - 16:50 | 3224075 Racer
Racer's picture

Okay so let me see... I am going to print Bank of Racer notes and then I will buy most of them myself..



Uh, no I will do no such thing because it is bad and very stupid

Thu, 02/07/2013 - 17:26 | 3224210 Liquid Courage
Liquid Courage's picture

And you'd be arrested for fraud if you tried it.

Thu, 02/07/2013 - 16:50 | 3224077 debtor of last ...
debtor of last resort's picture

So stop calling it "debt".

Thu, 02/07/2013 - 17:04 | 3224135 Everybodys All ...
Everybodys All American's picture

Don't call it taxes either, rather call it revenue. Don't call it spending, rather call it an investment. Such is the case under the Marxist mob serving Obama. Welcome to the world of make believe America. I already know how this ends.

Thu, 02/07/2013 - 18:04 | 3224318 Ying-Yang
Ying-Yang's picture

Don't call it debt... call it a buying opportunity.

Thu, 02/07/2013 - 16:51 | 3224081 Downtoolong
Downtoolong's picture

I think it's interesting that the latest QE has the Fed monetizing both Treasury's and MBS. Like two peas in a pod. That should tell you something about the new risk profile of Treasury's. And the Fed is paying up through the nose for both.  

Thu, 02/07/2013 - 16:51 | 3224084 jomama
jomama's picture

the show must go on.

Thu, 02/07/2013 - 16:52 | 3224086 MedTechEntrepreneur
MedTechEntrepreneur's picture

There should be a law forbidding the FED from buying more than 20% of TB's.... This is just an extension of executive and congressional profligate theft.

Thu, 02/07/2013 - 16:54 | 3224101 LawsofPhysics
LawsofPhysics's picture

There was, it was changed sometime before Glass-Stegall.  Can't remember the legislation, for me, the loss of Glass Stegall was the sign to buy any and all physical I could.

Thu, 02/07/2013 - 17:19 | 3224185 hannah
hannah's picture

"there should be a law against the fed...'


fixed it for ya...

Thu, 02/07/2013 - 18:29 | 3224382 Poor Grogman
Poor Grogman's picture

There is..
It's called the constitution.

Fri, 02/08/2013 - 13:02 | 3226147 hannah
hannah's picture

what is this 'constitution' you speaketh of...? is it 2-ply or 4-ply paper...?

Thu, 02/07/2013 - 16:54 | 3224096 thismarketisrigged
thismarketisrigged's picture

fuck the fed.


thomas lee from jpm was on cnbc and he said we are in a bull market and that ppl should go long stocks. this fucker does not even mention how its 100 percent due to the fed, prob leading ppl to believe economy is improving.


fuck u lee, hope u and ur fradulant bank get hammered during next crash

Thu, 02/07/2013 - 16:54 | 3224097 news printer
news printer's picture
At Vaux, France - workers threaten to blow foundry

168 employees of the foundry DMI de Vaux, in Allier, have disposed gas cylinders throughout the factory and now threaten to blow it up.

Thu, 02/07/2013 - 17:09 | 3224140 HoaX
HoaX's picture

At least the French know how to put their balls to the wall (potentially literal in this case).

No offense to you guys, but you´re fuckin sheeple.


Thu, 02/07/2013 - 17:21 | 3224186 moonstears
moonstears's picture

Seems the French need to conscript foundry workers into their military, they'd be a damn force to be reckoned with, having these ballsy fuckers in uniform.

Thu, 02/07/2013 - 17:23 | 3224196 HoaX
HoaX's picture

lol, they do have the Foreign legion.


Keep downvoting me mates, that will make you feel better. Truly taking a stand you armchair warriors!

Thu, 02/07/2013 - 17:34 | 3224232 earleflorida
earleflorida's picture

what's a 'maginot line got to do with it?

i want a moar... built through it?!

Thu, 02/07/2013 - 17:49 | 3224247 HoaX
HoaX's picture

Seem like I´m done for now. Pissed you lot off enough for the moment it seems. t(´-´t)

Too easy tho, way too easy.

Btw, keep printing, that will solve it. Almost as much as crying here about the problem for the past 5 years without doing jack shit about it does, or whining about your gold not hitting $1700+

Thu, 02/07/2013 - 18:21 | 3224360 Harbanger
Harbanger's picture

It's very hard to take you seriously with those french dance moves.

Thu, 02/07/2013 - 18:28 | 3224375 HoaX
HoaX's picture

It´s Rick Astley bitch.

Rick Astley - Never Gonna Give You Up - YouTube

Know your classics.

Thu, 02/07/2013 - 18:32 | 3224391 Harbanger
Harbanger's picture

Rick Astley is your idea of classics? You're fckin gayer than I thought.

Thu, 02/07/2013 - 18:40 | 3224398 HoaX
HoaX's picture

Just fuck off will ya.

Btw, your avi makes you look like a fuckin pedo.

What goes around comes around. Least mine knows how to dance.

Stop the avi kiddy abuse.

Thu, 02/07/2013 - 18:43 | 3224410 Harbanger
Harbanger's picture

That's my son when he was 5.  He already had bigger balls than you, frenchie.

Thu, 02/07/2013 - 19:12 | 3224414 HoaX
HoaX's picture

Why even defend yourself?

Got something to hide?

He already had bigger balls than you

Spare me the details plx you perv.



Boy, that escalated quickly!

Thu, 02/07/2013 - 18:57 | 3224434 jomama
jomama's picture

if you meet five assholes in one day, you're probably the asshole.

Thu, 02/07/2013 - 17:21 | 3224190 hannah
hannah's picture

those frenchies are DAMN smart. instead of taking over the factory and kicking the owners out, lets blow it up instead. real smart those frenchies....

Thu, 02/07/2013 - 17:50 | 3224217 HoaX
HoaX's picture

And please tell me, what did you Americans do so far?

Least Europeans know how to send their governments a proper message.

You Americans are a joke, and pissing you off tonight is fuckin hilarious XD

Here´s a nice Russian song to cheer you bitches up a bit :


Thu, 02/07/2013 - 18:50 | 3224422 Major Malfunction
Major Malfunction's picture

Trololo!!!  Eduard Khil FTW!  That 1976 vid is simply priceless. 


Even though Eduard passed away last year, he will now live on forever.

Thu, 02/07/2013 - 18:52 | 3224428 HoaX
HoaX's picture

Least someone got a sense of humor, phew!

Thu, 02/07/2013 - 17:28 | 3224212 earleflorida
earleflorida's picture

please... have sum moar hollanddaise'd sauce on your kraut'd sandwich, won't U`

Thu, 02/07/2013 - 18:08 | 3224296 HoaX
HoaX's picture

How´s your pink slime burger tasting tonight?

Even if you guys wanted to raise a proper insurrection, most of you are too fat to be able to climb out of your Mom sponsored mancave without getting a cardiac arrest.

Thu, 02/07/2013 - 20:20 | 3224622 Fredo Corleone
Fredo Corleone's picture

HoaX !

Speaking of burgers, what the Devil are the Irish doing: selling Polish horse meat to John Bull in Tescos throughout the kingdom ? Quite the controversy...


Thu, 02/07/2013 - 16:57 | 3224103 NEOSERF
NEOSERF's picture

So the US this month will buy 75% of our own long term debt, Japan apparently has to buy almost 100% of its debt...nobody except hedge funds wants anything but Southern European debt, Russia is selling US debt and that leaves China...WTF happens if they actually stop buying everyone's debt?  How in God's name do you stop this carousel?  In the past, everyone buying eachother's debt at least gave the illusion of the debt being desired and having value.  No more.  Pretty clear no one wants to buy anything with dates beyond 3 years and therefore no one gets any yield...man is this screwed up.

Thu, 02/07/2013 - 17:17 | 3224162 HoaX
HoaX's picture

Hedge funds buying European debt should tell you something about the profitability and chance of getting paid back. Do they buy US debt?

China stopped buying yours, and they´re swimming in dollars cuz of all the iCrap they make. They buying PM´s now.

And for some nice watching if you haven´t yet cuz it´s somewhat old:



The truth hurts.

Thu, 02/07/2013 - 17:30 | 3224221 Temporalist
Temporalist's picture

I think, as Hugh Hendry pointed out, China is stuck having to purchase US debt because if they stop they are stabbing themselves in the back as the RMB will appreciate, they won't be able to export anything and they will kill their manufacturing base.  This might change when their growing middle class becomes self-sustaining but they aren't there just yet.

Thu, 02/07/2013 - 17:47 | 3224271 HoaX
HoaX's picture

Right, it´s totally not like they´re planning to run the worlds reserve currency for the next decade or so.

Thu, 02/07/2013 - 18:29 | 3224379 Harbanger
Harbanger's picture

They're just on board with the globalist plan, but they won't be running anything.

Thu, 02/07/2013 - 18:45 | 3224413 HoaX
HoaX's picture

Keep dreaming "kiddo".

Thu, 02/07/2013 - 17:32 | 3224228 Liquid Courage
Liquid Courage's picture

How in God's name do you stop this carousel?


"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."

- Ludwig von Mises

Thu, 02/07/2013 - 16:56 | 3224106 thismarketisrigged
thismarketisrigged's picture

just so i can laugh at the fixation of this market, i hope they bring the s&p positive for the day. it would be too funny not to laugh

Thu, 02/07/2013 - 16:58 | 3224118 optimator
optimator's picture

Just half the usual pomo today so It'll have to finish a little red.

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