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It's Official: China Confirms It Has Begun Liquidating Treasuries, Warns Washington
On Tuesday evening, we asked what would happen if emerging markets joined China in dumping US Treasurys. For months we’ve documented the PBoC’s liquidation of its vast stack of US paper. Back in July for instance, we noted that China had dumped a record $143 billion in US Treasurys in three months via Belgium, leaving Goldman speechless for once.
We followed all of this up this week by noting that thanks to the new FX regime (which, in theory anyway, should have required less intervention), China has likely sold somewhere on the order of $100 billion in US Treasurys in the past two weeks alone in open FX ops to steady the yuan. Put simply, as part of China's devaluation and subsequent attempts to contain said devaluation, China has been purging an epic amount of Treasurys.
But even as the cat was out of the bag for Zero Hedge readers and even as, to mix colorful escape metaphors, the genie has been out of the bottle since mid-August for China which, thanks to a steadfast refusal to just float the yuan and be done with it, will have to continue selling USTs by the hundreds of billions, the world at large was slow to wake up to what China’s FX interventions actually implied until Wednesday when two things happened: i) Bloomberg, citing fixed income desks in New York, noted "substantial selling pressure" in long-term USTs emanating from somebody in the "Far East", and ii) Bill Gross asked, in a tweet, if China was selling Treasurys.
Sure enough, on Thursday we got confirmation of what we’ve been detailing exhaustively for months. Here’s Bloomberg:
China has cut its holdings of U.S. Treasuries this month to raise dollars needed to support the yuan in the wake of a shock devaluation two weeks ago, according to people familiar with the matter.
Channels for such transactions include China selling directly, as well as through agents in Belgium and Switzerland, said one of the people, who declined to be identified as the information isn’t public. China has communicated with U.S. authorities about the sales, said another person. They didn’t reveal the size of the disposals.
The latest available Treasury data and estimates by strategists suggest that China controls $1.48 trillion of U.S. government debt, according to data compiled by Bloomberg. That includes about $200 billion held through Belgium, which Nomura Holdings Inc. says is home to Chinese custodial accounts.
The PBOC has sold at least $106 billion of reserve assets in the last two weeks, including Treasuries, according to an estimate from Societe Generale SA. The figure was based on the bank’s calculation of how much liquidity will be added to China’s financial system through Tuesday’s reduction of interest rates and lenders’ reserve-requirement ratios. The assumption is that the central bank aims to replenish the funds it drained when it bought yuan to stabilize the currency.
Now that what has been glaringly obvious for at least six months has been given the official mainstream stamp of fact-based approval, the all-clear has been given for rampant speculation on what exactly this means for US monetary policy. Here’s Bloomberg again:
China selling Treasuries is “not a surprise, but possibly something which people haven’t fully priced in,” said Owen Callan, a Dublin-based fixed-income strategist at Cantor Fitzgerald LP. “It would change the outlook on Treasuries quite a bit if you started to price in a fairly large liquidation of their reserves over the next six months or so as they manage the yuan to whatever level they have in mind.”
“By selling Treasuries to defend the renminbi, they’re preventing Treasury yields from going lower despite the fact that we’ve seen a sharp drop in the stock market,” David Woo, head of global rates and currencies research at Bank of America Corp., said on Bloomberg Television on Wednesday. “China has a direct impact on global markets through U.S. rates.”
As we discussed on Wednesday evening, we do, thanks to a review of the extant academic literature undertaken by Citi, have an idea of what foreign FX reserve liquidation means for USTs. "Suppose EM and developing countries, which hold $5491 bn in reserves, reduce holdings by 10% over one year - this amounts to 3.07% of US GDP and means 10yr Treasury yields rates rise by a mammoth 108bp ," Citi said, in a note dated earlier this week.
In other words, for every $500 billion in liquidated Chinese FX reserves, there's an attendant 108bps worth of upward pressure on the 10Y. Bear in mind here that thanks to the threat of a looming Fed rate hike and a litany of other factors including plunging commodity prices and idiosyncratic political risks, EM currencies are in free fall which means that it's not just China that's in the process of liquidating USD assets.
The clear takeaway is that there's a substantial amount of upward pressure building for UST yields and that is a decisively undesirable situation for the Fed to find itself in going into September. On Wednesday we summed the situation up as follows: "one of the catalysts for the EM outflows is the looming Fed hike which, when taken together with the above, means that if the FOMC raises rates, they will almost surely accelerate the pressure on EM, triggering further FX reserve drawdowns (i.e. UST dumping), resulting in substantial upward pressure on yields and prompting an immediate policy reversal and perhaps even QE4."
Well now that China's UST liquidation frenzy has reached a pace where it could no longer be swept under the rug and/or played down as inconsequential, and now that Bill Dudley has officially opened the door for "additional quantitative easing", it would appear that the only way to prevent China and EM UST liquidation from, as Citi puts it, "choking off the US housing market," and exerting a kind of forced tightening via the UST transmission channel, will be for the FOMC to usher in QE4.
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Checkmate
Rut row.
No worries.........Obama's son will buy them.
Yes we can.
Anything?
Yep... Time to raise them rates now...
And start taxing foreign profits cause tax revenues are about to implode
The Pentagon just hates running out of funding...
Who bought the 108 B in treasuries?
Who bought the 108 B in treasuries?
Exactly. If China is selling, who is buying? Forex is such a fun market. And honest as the day is long...
This means WOAR!
But... DEBT IS MONEY!
/sarc
now if they bought gold for 100 billion or 1 trillion, it would matter. otherwise it is just a number on a screen, or a paper. easy to make.
Countdown to Myra: 3,2,1...
Get out while you can.Liquidate your savings. Get into gold and silver while the prices are manipulated downward.
Additionally, China is selling because now is a great time to sell US paper. It is in high demand as the world economy tanks and US stock market falls. However, the USA has a sovereign debt problem. 2017 or sooner.
Now it all makes sense....You dump our worthless treasuries? Well we will blow up some of your cities (Tianjin, Shandong)
Okay, I gotta figure this out:
The US borrowed money from China (China buys Treasuries).
China goes broke borrowing money from itself, and decides to cash in her IOU's.
The US is broke from borrowing money from itself and everyone else, which means the US's IOU's are worthless (The US can't pay back what it owes).
If yields (the interest on the bonds (treasuries) goes up, then the US really can't pay back.
Shit rolls downhill, which means that as the interest rates go up on Treasuries, that pushes interest rates up down the line, (ie at the broke-ass fractional reserve banks), and finally, the broke ass American public can't afford to buy a house made out of sawdust, chalk, and plastic wrap.
If the public is tapped out, well, that's when shit rolls back uphill, as in NOBODY CAN AFFORD TO GROW FUCKING FOOD, YOU STUPID BANKSTER MOTHERFUCKERS!!!!!!!
Checkmate?...The tiebeaker will be played against Trump
So if the Fed doesn't want rates normalized as in bonds being slammed which they can't help, then the only thing left for them to do is to buy bonditos!
QE4EVAH
See,this is what happens to misguided policies, power in the hands of idiots and academics (synonymous)
Even more pressing questions are:
Did this move ring the bell for the selling for the Arabs to?
When will they begin accept RMB?
After this fiasco, further selling will become more secret than a briefing at Area 51 (even amongst state actors). The teevee will assure you it's all a conspiracy theory and blame the “lies” of conspiracy theorists for the resulting panic.
Good luck raising interest rates Yellen!
Moar ZIRP!
Well this move was mostly a political one.
Which means the Chinese will sell big time and they will publicly admit it. Why?
Because they are pissed, and this is the cleanest way to win this war.
If someone tells you that your currency isn't good enough to be in the basket, do you improve your currency? No, you knee-cap the rest of the world and ask again!
....I like your style..... make very special wontons for you round eye.... they used to be your nuts......
This isn't about China. They're only a sideshow and doing what they're forced to do.
Psychopaths don't profit or consolidate power from the status quo, only the mafias benefit in those environments.
Psychopaths always use the same plan:
1. Feed the war machine
2. Manipulate the banks
3. Control the military
It never changes because it works 100% of the time, and it will work again. We're all just miserable witnesses to the same orgy of death that they hold every few decades. Psychopaths consolidate power and gain wealth through chaos, pure and simple.
It didn't start with China... it's ending with China.
Wake the fuck up.
Wrong tense, because it doesn't work anymore. Why?
Nuclear weapons and the fallout form their usage will be here for thousands of years. And also they can't create a working copy of earth biosphere (the failure of the Biosphere 2 project-at least not with publicly available technology).
It starts with ONE THING-
{I DON'T KNOW WHY}.
It doesn't MATTER how hard you 'try'.
KEEP THAT IN MIND. All the Zionists rhyme to explain, in 'due time', all...
[ALL I KNOW]...
OH,...
'I DESIGNED THIS RHYME'... I must have mis-quoted (or mis-heard the intro in the original Lucasfilm F-X version).
Yeah. RIGHT.
Fucking 'ROCK WARS' are ON!
https://www.youtube.com/watch?v=eVTXPUF4Oz4
If someone tells you that your currency isn't 'acceptable' for the 'basket', you simply design a NEW, SHINIER BASKET that YOU tell 'everyone else' is BETTER (and THEY aren't good enough to be in YOUR NEW BASKET).
IF the baskets are limited to a finite amount of straw to build, the holes or 'open areas' get larger with the size increases, and the smaller stuff falls through the bottom.WTF? Did the 'smart economists' actually get their degrees in 'Advanced Basket Weaving' at Columbia and fucking Harvard? Do they think that plugging up the openings in the bottom with bubble gum actually SOLVES anything? Will the NEXT (YUAN, RENIMBI, RUBLE, BRICS BASKET OF CURRENCIES) bubble POP, and let the finite valuation go in to FREEFALL, once AGAIN? Does No ONE grasp this concept of 'doing the same thing and expecting a different result'?
DAMN, I guess I'm a 'RAYCISS'. Forgive me. JACK LEW and JANET YELLIN will SAVE US! Podhertz and Leibowitz told Bush the Younger to 'go shopping'... for weapons systems...
OT, but for how long has the US debt been stuck at $18.2 trillion?
Tyler stopped covering it a year ago or so, and the govt stopped reporting it (prior to raiding social security funds to prevent it rising)
where are we now, $20 T ? $21 ?
Long Tonya Harding!
QE4EVAH
also means we the plebeian hoi polloi get to suck on vast waves of inflationary donkey balls 4evah!! , as well. Which we all know eventually leads our children to have to fight and die in yet another bank sponsored WOAR 4evah.
my favorite part was “not a surprise, but possibly something which people haven’t fully priced in,”
that is a fine distinction.
it's all part of a bigger plan
The big treasury dump will come only later as the ultimate final knock-out...
http://www.denk-bubbles.com/what-if
In the new ab-normal and with the Fed's desire to creatively engineer "recovery" while pay banks billions more for not lending and soak up unlimited Treasury's others may no longer want...consider...
Rate Hikes and QE...Simultaneously?!? Actually, Yes!!!
http://econimica.blogspot.com/2015/08/rate-hikes-and-qesimultaneously.html
I'm not a chess player but I did stay at a Holiday Inn Express last night and checkmate means.....
no more moves = game over
Hi.
I'm Tom Bodett.
Here at Motel Six, the room might have cockroaches and the sheets might have old stains from bodily fluids, BUT; we'll leave the light on for you! (SHIT. Was that an E.M.P.?)
He'd will be the perfect President.....very familiar with bankruptcy
the fed's henchmen are covertly buying up the treasuries otherwise such a high volume of sales would spike the 10 year note. Fed QE for China of sorts. and when the Chinese start to spend those dollars. the inflation can return to the US. This is why they are talking about rate hikes. because the 1 billion + consumers in China have the potential for seriously bidding up US asset prices. the pieces are in place and it's their move. Enjoy the low inflation while it lasts.
That is probably part of it.
Still China has been accumulating US soverign debt for decades. Some of that must be holding huge gains. To sell some now is huge profit and gives PBOC a chance to support their currency.
Simultaneously, many south american economys want to hold any currency but their own. The Bolivar, the Real, the Argintine peso, all are completey cratering internationally, and universally not trusted by their indiginous populations. I can see lots of people that may consider the USD to be a safe haven in a world full of bad choices.
EXACTLY!! We know the Greeks aren't buying treasuries...because, the world is now Greece...so they aren't buying. So, what's the end game? The US Treasury/Fed does a treasury buy back....then one day we get to just erase 5Trillion in debt? The Journal Entries on this one will get very interesting.
Next... the American Holodomor.
stupid AND evil
while they don't necessarily, they often go together
Yeah...well I got a EBT card!!!
/sarc
We need people in office that understand economics and want free markets. We need people in office that allow banks to fail and won't bail them out or bail them in or force the public to participate in their ponzi schemes. Their is only one candidate in the field that meets that criteria.
That's why I'm donating half of every sale of my candles with silver coins (https://www.etsy.com/shop/ScentSavers?ref=hdr_shop_menu), now through 9/7, to Rand Paul's moneybomb on September 7th.
End the Fed!!!
Rand Paul...lol...he's already lost...you're wasting your money...but doing a great job of pimping your ETSY store...
Actually im losing money on all of this. Since I don't have much extra money afetr paying bills, I thought this was a good way to help Rand and get the liberty message out.
Rand is campaigning inAlaska, which votes after Super Tuesday. That shows that he is planning on being in the race all the way to the convention!
Poor little Rand. He's lived so long on his knees, he's dying like a male prostitute.
Rand Paul is a zionist neocon loser. Why waste time campaigning for him?
If I were to participate in the charade, the only person for whom I would vote is Dr. David Duke.
"in the race all the way to the convention!"...yeahhh...Rick Perry has those same "plans"...
Jeb, BUSH (yeah that's his name even though he NEVER says it nor does he want you to hear it from anyone!) is the chosen one...That guy from Wisconsin is the backup.
Trump is fucking everything up for the Republican elite.
Real Money - He won't win but if he chosen as a running mate it would make me happy.
You all realize that it is a self fullfilling prophecy to say that Rand can't win. They (you) pulled the same crap when Ron was running. Even though he was the only one gettin to the heart of the issues (The Fed), people wrot him off before they even cast their vote. In reality he had enough states to get nominated from the floor, evenafater they cheated him out of at least 2 victories.
What if people didn't give into the Ron Paul (or Rand Paul) can't win talk? What if we supported the best candidate regardless of what some polls, political hacks, or others say? Maybe we can mass enough support where they cant brush the corruption under the rug. Maybe it would be too obvious to try to cheat.
Giving up will only have one result: more of the same crappy monetary policies. More wars. More welfare. More taxes. More regulations. Less freedom. Less liberty.
The music played and Rand danced like an obedient puppet.
Too late now that Trump is the DJ and spinning his own tunes. The Tea Party is his now.
The only question if this keeps up is who Trump selects as his VP candidate. It will probably be a woman and not Fiorina unless she can deliver California (at this stage unlikely so she better start proving her viability as an Apprentice.)
Things are about to get bumpy and entertaining. Who needs a TV when you have reality like this
Maybe he could run on the Likud ticket. His dad was a great man. Rand is lying little weasel The way he twisted that quote from Khomeini caused me to stop supporting him.
Fuck off with your candle bullshit. If anyone here wanted to support rand McNally they know the drill.
You are worse than the mope who posts about his sister/mother/girlfriend making bank at home on their laptop.
Maybe you can buy Rand another yarmukle with your candle proceeds.
Those candles are made with rendered Palestinian kids.
pods
Rand Paul lost me when he kissed black ass after the Ferguson riots, when instead he should have called for machine-gunning the savages.
Good, then. True libertarianism has no place for bloodthirsty assholes like you. The Republican Party always has room for one more, though...
Realmoney2015 you are absolutely right!!! All the dislikes check on your comments are Government puppets/trolls.. Though his father was more presidential ready then RAND... Elections don't matter because even if Rand PAUL wins it won't show on the voting polls ( cooking the books + Electoral votes matter, NOT the actual voters THE PEOPLE!!
Love that volatility in THE FOREX MARKET!!!!! THE SHEEP play STOCKS.. THE SHARKS PLAY FOREX...
You're well named you Trojan Motherfucker, you and easy money go home and take your red pills, don't spit'em out this time. Troll indeed!!! Fuck you!!!
this can, can be kicked for a long time more. the question is whether they have decided that it is time to have a full blown crises. And it may be so as there is lots of thing going on: talk about raising rates to make dolar strong, using Saudia Arabia to underprice everyone in oil, proxy war with Russia, coups going on in countries like Brazil...already billions suffering from this economic warfare. Future is always full of possibilities, so there must be some hope remaining that there will be a peacefull and good change to this very old and very corrupt order.
Wait, I thought what happens in the markets in China didn't impact the US market. Obama's mouth piece said so.
This was the best scenario for China. It allows them to massively dump USA treasuries.
Win win for China. Stabilizes their markets and they will make money on those stock purchases when the markets move back up.
The time will come, mark my words, when the USA will not be able to afford the fuel oil for most of its fleet.
THE DOLLAR IS THE WORLD'S RESERVE CURRENCY UNTIL IT ISN'T!
whether it is an act of aggression by China or out of necessity to support their economy, it doesn't matter. The effect on the US will be the same.
China's market turbulence is primarily a worry for the rest of the world. Less so for China itself.
"Win win for China. Stabilizes their markets and they will make money on those stock purchases when the markets move back up."
Yes, and an excellent, non confrontational excuse not to piss off the US too much. They are smart.
China should of dumped them back in 2008.
Should HAVE dumped. "Should've" works too. But not should OF.
of is such a funny word
spelled with an f and sounds like a v
crazy language we have
Yeah, like medieval with a silent i.
not as annoying as a historical event vs an historical event
those who plug an an before an H-word are AN Ass.
..or as annoying as many people’s lazy tongues or ignorance of proper enunciation.
examples
Febuary V. February
Antartic V. Antarctic
barbituate V. barbiturate
cannidate V. candidate
bob wire V. barbed wire
excetera V: et cetera
libary V. library
offen V. often
..and many more.
The US will frack the oil for its fleet. Pay for it in $USD.
Best scenario? You're joking right? They're liquidating their savings to prop up a currency (has that EVER worked) to prevent the currency from declining. A decline that would make their exports more competitive - so they're actively working to make themselves LESS competitive on world markets! effin' brilliant!
AND, their sales of treasuries pushes US interest rates higher, thus making dollars more valuable (higher rates=more demand for dollars and lower inflation) and pushing down the value of the yuan, the currency they're trying to prop up!
Yeah, that's a "best scenario for China." Thanks for the laugh!
some of the heavily upvoted comments in this article have been downright comical... many here would latch onto anything as long as it can be interpreted as "death to USA Yankee go home"...
your assessment is spot on, but most here are too emotional to see it...
Relax, yuan devaluation will be done later...
“By selling Treasuries to defend the renminbi, ***they’re preventing Treasury yields from going lower*** despite the fact that we’ve seen a sharp drop in the stock market, "
THAT^^^ IS A STEALTH INTEREST RATE INCREASE MASKED BY STOCK MARKET TURMOIL.
YELLEN, DUDLY & CO. HAVE HAD THE PBOC DO THE WORK FOR THEM.
While the buy the S&P futures on the side?
Attention all oil patch workers:
Rate hikes on the Treasuries will mean massive carnage in the junk-bond realm. The only thing turning your drill rig is borrowed money, and at 38 bucks a barrel, no-one's lending for cheap. No longer will you be able to buy meth with earned pay. You're going to have to resort to selling your blood, blow-jobs, and pimiping out your kids.
Don't blame the Chinese. People will do almost anything for money, as you will soon find out.
The blame goes elsewhere. I dare not give you a clew.
No problem. The clews on my sails are in good shape but the cunningham is looking a bit dodgy and the outhaul is out to lunch.
If the FED's and BIS' proxies stand behind the gargantuan sales in China then the unintended side-efect is indeed fruitful.
The Fed, through shady arm's length transactions, bought them. It's called monetizing the debt. The end game approaches.
So the Fed is now the central of bank of China too?
If the Fed doesn't step in, then who? If nobody bites, the price of T-bill craters, we get high interest rates and negative growth - a sure bet for deflation. If that happens, the game will be over and the wizards behind the curtain will be exposed for the fools they truly are. They're not acting for the Chinese by buying their t-bills back. The fools are merely trying to stay concealed by keeping the curtain drawn around them.
All according to the Zio agenda of eventual world domination. (Must destroy everything before Isreal reigns supreme.)
Gonna go out on a limb and say you the American population bought them.
I am pretty sure the Fed has real time worldwide qusip reporting. So in theory, you could go back a month or two and events may make more sense.
Another blow to the "mighty" American dollar.
Malaysia, Thailand seek to use their currencies in trade, investmentAs more trade occurs in Chinese yuan but the global trade declines in USD, then it is a matter of time before China and it's currency becomes more powerful.
USD should decline against all currencies at anytime, once it's impossible USD 18.2 trillion dollar worth of debt implodes!
In the history of the world, no empire has lasted forever. Romans, Greeks, Spanish, British and the French all ruled the world but today Rome, Athens, Madrid, London etc stand with nothing but a few buildings and some history on their side and have very little global clout in world affairs today.
Guess we can do a better job of becoming a tourist destination and get rid of DHS and the TSA and the groping of foreigners and USA citizens.
It will be interesting to see where the belt tightening happens. I ain't gonna pay for no fed moocher's pension plans.
Yes, the tourist buses to compare glueboard housing with classical and gothic architecture will never end! Unfortunately (or fortunately, depending on your perspective) the American Empire offered nothing of substance, only empty capitalist cultural and psychological subversion. Quite amazing for the size of it.
Maybe if they kept the hole in the Pentagon or Ground Zero it would have been an architectural reminder of her greatest achievements.
"No empire has lasted forever"...How many of them gave up that power without a fight? "If I can't rule the world, then I shall burn it to the ground"...
The myth of the future:
The Behemoth-Leviathan Loses Her EBT Card: Or How I Stopped Printing And Learned To Love Debt Bombs
3rd century Rome 2.0 Bread (food stamps), circuses (Mainstream media), a self serving deep state and an ever diluted currency to pay for it all(QE). Do you remember what came next?
Welcome to New age. -Imagine Dragons
Yeah - they imported vast numbers of barbarians to help out with their collapsing birthrate and economy - and it worked!...wait
"My greatest flaw. I'm surrounded myself with idiots."
- Victor von Doom
Belgium. Or should I say "Belgium".
Ned Flanders
They are devaluing their currency, certainly not selling treasuries as that would strengthen the Yuan. Besides, fixed income desks are probably spreading this rumor via their media mouthpieces as they are in the red on their gigantic interest rate swaps - look no further than the fact that the spikes in yield occur at typical times used by algos - 8:45, 9:30, 10:45, 11:30, 12:00 (NY Fed securities lending) and particularly 13:15 (NY Fed reverse repos concluded). Hardly the optimal schedule for Asia or Belgium "sellers".
My view, NY Fed " intervened" to stop yields from cratering during safe haven trade heavy demand (monday), much like they might have done in early February and May 2013 (another media creation "taper tantrum").
"My view, NY Fed " intervened" to stop yields from cratering during safe haven trade heavy demand "
I disagree.
I think the PBOC basically 'intervened' in the US Treasury Market by selling US Treasuries.
IF The FED was buying they were more likely than not buying shares of APPLE via their proxies.
Only an audit will reveal the shenanigans. Americans should write Sen. Richard Shelby of Alabama and their Congressmen to DEMAND an audit. Demanding a curb stomping elimination of the evil empire would be even better.
No doubt in my mind the Fed picked up the tab which is better than having a bunch of justifiably pissed foreigners holding the debt. I think.
Ask the Big Kahuna FX head from BBH who has articles posted on this site every weekend and is a HUGE $DX bull, 'who is buying'... And perhaps more importantly, what it all means...
Who's buying? Anyone who wants some realatively safe return on their money.
Who bought them? Any of the other western bought-and-paid-for US Stooges. The UK for example. What's the point of having vassal states if you can't use them?
Your Gandkids and great Grandkids!
Who's on first base when they dump 1 Trillion. https://www.youtube.com/watch?v=airT-m9LcoY
Who's on first base when they dump 1 Trillion. https://www.youtube.com/watch?v=airT-m9LcoY
The initital downward pressure on the RMB is from peeps fleeing from RMB into/buying "maybe" USTs. If China then sells these UST, does it have a net effect on UST yields?
Probably was the Fed buying through one of its proxies
Still the Fed's balance sheet would expand if they loaned the money to the proxy so it should show up.
So you still believe that accurate balance sheet data is being reported...? If anything has been proven since at least 1999, it's that all balance sheets are being manipulated. This means everyone... business, banks, Fed, Govt, etc. The watchdogs are deliberately turning a blind eye because they are just as deep in the same corruption. The Rule of Law officially died in 2008.
What balance sheet? You don't think they keep accurate account of themselves do you?
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
If the Fed was buying without increasing balance sheet, what would they have needed to do in order to pick them up? Sell stocks... But then who started buying the last two days for the V-shape bounce? Maybe QE4 started yesterday...
Excellent question.
Well they figured everyone else is doing stock buybacks we might as well too
Who bought the treasuries? Why, the Fed silly. This all means nothing, carry on
No, it does mean something. One more step on the path to fiscal oblivion. After all, the beaches are only made up of individual grains of sand, right?
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
Krugman.
Belgium
Some cat named. Dr. Evil.
This is what I keep asking and no one will answer. I'm not a FX expert, but someone or a lot of someone's with deep pockets has to be on the other end of this right?
Come on ZH, educate us poor benighted souls.
"Who bought the 108 B in treasuries?"
Other Chinese of course.
Puzzle it out. Your currency is being devalued, your lunatic government is going after anyone with even a remote connection to the crash. What would YOU do if you were a chinese who just cashed out thanks to the PPPT (People's Plunge Protection Team).
Like it or not, the US market is the deepest, most liquid market ITW, plus you get the added bonus of a capital gain when you cash out, due to the rising dollar (or falling other currencies, depending how you look at it).
A rising dollar is bad for US exports, but what does the US export anymore? Most US corporations are offshore these days, so it's a wash. A rising dollar means cheaper imports (attention Walmart shoppers) so what's not to like about a global currency collapse that also drives down the cost of imported oil?
... the US market is the deepest, most liquid market ITW -- ebear
Yes, still is. Regardless of who it pisses off.
The thing I'd like to know is why Zero Hedge is pushing this big bad China sell-off so relentlessly? Hmmm? Tyler? Anyone?
The Fed?
Always plenty of buyers. Every country that wants to keep their own currency in check versus the dollar, will buy. Its not about whether the US treasury is a good investment as much as keeping their own currencies low versus the dollar.
It feels like "micro-aggression" to me!
Kilgore: Smell that? You smell that?
Lance: What?
Kilgore: Napalm, son. Nothing else in the world smells like that.
[kneels]
Kilgore: I love the smell of napalm in the morning. You know, one time we had a hill bombed, for 12 hours. When it was all over, I walked up. We didn't find one of 'em, not one stinkin' dink body. The smell, you know that gasoline smell, the whole hill. Smelled like
[sniffing, pondering]
Kilgore: victory. Someday this war's gonna end...
http://www.imdb.com/character/ch0002961/quotes
I find that offensive.
Man is Belgium fooked. Will they default out of the eurozone because of their Treasury holdings?
BWAHAHAHAHA
The day is near when the illegals in Europe will wave the dollar bills and say 'papers no bono' as they complain about the currency and the hotel accomodations.
Didn't the Pentagon lose 1.2 trillion or couldn't account for 1.2 trillion right before 9/11? They should be flush. Unless that money was spent on funding, excuse me fighting ISIS (the artist formally known as Al-qaeda aka moderate Syrian rebels).
9/10 2001 cannot acount for 2.2 trillion! Rumsfeld press briefing.
Wanta surprise!
(Yeah, you know what I mean)
Imagine that, China is doing something for their own benefit without groveling to the mighty FED first. It's hard telling what their ultimate aim is, but I'm pretty sure screwing with America is a side benefit to them....
Baloney. $pun by China a bullshit story cuz they know the USD fiat is as good as wallpaper in the near future.
Man enters Chinease takeaway
Harrow .........how can I hewp ............says the order taker.
Do you have QE4 on the Menu.................asks the man.
Yes, we have QE4,QE5,QE6.............infact we have QE any Numbar you wool lyke..........says the order taker.
Oh good says the man................Stawks will be pleased can I have tripple dow with my QE
Yas says the man behind the counter................comming up ......white away
yeah, that's some serious shit, the 10 year yielding 2.18 and the 30 at 2.94, the horror
It hit what, 1.97 just 2 days ago? Hmmmmm
"Checkmate"
That's cute, America, but we're playing GO. - China
ATARI!
The sacrifices in go can get very confusing. Nothing compares in chess, as you can see with the simple computers defeating chess masters and supercomputers being lucky to beat go amateurs.
China plays strong and thick. America plays wild and aggressively without the ability to step down. Guess who's number 1 in go right now? Well, the two best players in the world are playing ten games against each other, Gu Li (Chinese) plays strong and Lee Sedol (Korean) plays aggressively:
https://gogameguru.com/tag/mlily-gu-vs-lee-jubango/
(Not meant as support for either side here, just an observation.)
Yep, long-term strategic thinking as opposed to short-term. Chess is a battle. Go is the whole war.
Time to start watching the FED balance sheet (and more importantly it's market making proxies) more closely.
If the FED balance sheet mattered ( or was in fact accurate) they wouldn't publish it. Unless of course it was simply to deceive.
***{(?/!<x>)$#Rrr-(Rr2)}+/_-***
"Zero Hedge's take on China's RRR cut" 8/26/15 @ 'Asia Unhedge / http://atimes.com/
http://atimes.com/2015/08/zero-hedges-take-on-chinas-rrr-cut/
Re: TD/ZH
Checkmate indeed & sadly for many , game over !
Yea, but the chinks think we're playing chess while the West is playing Command & Conquer with a side of diplomacy.
QE4. It's a lock.
NOTT!
Like negative rates would work here.
"Negative rates work everywhere they've been tried."
Present money priced at zero over future money IS a negative interest rate in an inflationary environment, right?
They will call it "opperation protect middle class freedom and money" or squid juice as the case may be.
thats good!
The US can print that in one afternoon.... I am off back to bed..
Only by causing hyperinflation, those dollars will not be trapped in bank reserves.
Gold bitchez.
The Reds learned how to print from the Fed, they also watched the Fed boost US markets, they're just being a little more obvious. Fed's next move is blatant helicopter money into stocks, screw it
The reds(if you mean communists) and the feds was/are run by the Jews - funny that.
Terrorist Jews
There is no need to exaggerate the part played in the creation of Bolshevism and in the actual bringing about of the Russian Revolution, by these international and for the most part atheistical Jews, it is certainly a very great one; it probably outweighs all others. With the notable exception of Lenin, the majority of the leading figures are Jews. Moreover, the principal inspiration and driving power comes from the Jewish leaders. Thus Tchitcherin, a pure Russian, is eclipsed by his nominal subordinate Litvinoff, and the influence of Russians like Bukharin or Lunacharski cannot be compared with the power of Trotsky, or of Zinovieff, the Dictator of the Red Citadel (Petrograd) or of Krassin or Radek -- all Jews. In the Soviet institutions the predominance of Jews is even more astonishing. And the prominent, if not indeed the principal, part in the system of terrorism applied by the Extraordinary Commissions for Combating Counter-Revolution has been taken by Jews, and in some notable cases by Jewesses. The same evil prominence was obtained by Jews in the brief period of terror during which Bela Kun ruled in Hungary. The same phenomenon has been presented in Germany (especially in Bavaria), so far as this madness has been allowed to prey upon the temporary prostration of the German people. Although in all these countries there are many non-Jews every whit as bad as the worst of the Jewish revolutionaries, the part played by the latter in proportion to their numbers in the population is astonishing. - Winston Churchill
http://www.fpp.co.uk/bookchapters/WSC/WSCwrote1920.html