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Foreigners Dump Record Amount Of US Treasurys In Past Month

Tyler Durden's picture




 

With year end fund flows making absolutely no sense for the most part, thank you global central planning, as the euro plunges and the market refuses to follow, with risk assets rising on speculation the ECB (and/or Fed) are about to restart printing yet gold collapsing (on one or two hedge funds liquidating, yet econ PhDs already rewriting their theses on why the "gold bubble has popped"), and finally with Treasurys soaring to near all time highs (10 Year under 1.9% yesterday even as stocks surged on data from the National Advertisers of Realtors, aka NAR, of all fraudulent and corrupt entities), here is the latest observation to make the confusion complete. As the Fed's critical H.4.1 weekly update shows (which is leaps and bounds more accurate than the Treasury's TIC international fund flow data), in the week ended December 28, foreign investors sold the second highest amount of  US bonds in history, or $23 billion, bringing total UST custodial holdings to $2.67 trillion, a level first crossed to the upside back in April. This number peaked at $2.75 trillion in mid-August, and as the chart below shows the foreign holdings of US paper have been virtually flat in all of 2011, something which is in stark contrast with what the price of the 10 Year would indicate vis-a-vis investor demand. And going back further, the last week is merely the latest in a series of Custodial account outflows. In fact, in the last month (trailing 4 weeks), foreigners have sold a record $69 billion in US paper, a monthly outflow that was approached only once - in the aftermath of the US downgrade (when erroneously it is said that a surge in demand for US paper pushed rates lower - obviously as the chart shows nothing could be further from the truth).

So here is the conundrum for today: did China continue to dump US paper in the year end, something we saw started with the October TIC data, or was it French banks continuing to sell off any non-EUR assets, and in the process repatriate proceeds, keeping the EUR higher. We don't know, nor frankly, in this uber-centrally p(l)anned market, do we care much any longer.

Chart 1 - total UST holdings in Fed custody:

Chart 2 - monthly (trailing 4 week) change in UST holdings:

 

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Fri, 12/30/2011 - 08:35 | 2021226 Irelevant
Irelevant's picture

Chaos BITCHEZ!

Fri, 12/30/2011 - 09:40 | 2021327 kaiten
kaiten's picture

More like: QE3, bitchez!

Fri, 12/30/2011 - 09:57 | 2021355 LawsofPhysics
LawsofPhysics's picture

Wake the fuck up, QE has never stopped.

Fri, 12/30/2011 - 10:02 | 2021365 kridkrid
kridkrid's picture

Bingo.  QE1 and QE2 are a lot like TARP.  It's the red herring about which people can focus their attention while the real work takes place.

Fri, 12/30/2011 - 10:23 | 2021417 SheepDog-One
SheepDog-One's picture

Theyre done with 'QE', now they just have the spigot flowing full force all the time, UNLIMITED FED Euro swap line, therefore it HAS to be the same to Wall St and the banks. 

Fri, 12/30/2011 - 10:25 | 2021421 Snidley Whipsnae
Snidley Whipsnae's picture

Right you are SD1... and the sheeple are told 'Use This Paper Or Else'!!!

Happy New Year

Fri, 12/30/2011 - 10:46 | 2021470 DaveyJones
DaveyJones's picture

fools, it's obviously an act of terrorism

Fri, 12/30/2011 - 11:04 | 2021518 ratso
ratso's picture

Could it just be more repatriation of euros and profit taking??

Fri, 12/30/2011 - 12:11 | 2021710 VegasRage
VegasRage's picture

I can't help but think that the nearly $250 trillion in derivatives markets on the OCC's books are the new stealth QE instruments. 

Fri, 12/30/2011 - 10:51 | 2021482 Hugh_Jorgan
Hugh_Jorgan's picture

The problem is that full blast is providing less effect than the measured flows of 12 months ago. The can moves less and less with each successive kick.

Fri, 12/30/2011 - 11:16 | 2021567 mick_richfield
mick_richfield's picture

Things fall apart

The center cannot hold.

Mere anarchy is loosed upon the world.

Fri, 12/30/2011 - 12:09 | 2021704 Seize Mars
Seize Mars's picture

Things fall apart

The center cannot hold.

Mere anarchy is loosed upon the world.

Yeats - well done.

Fri, 12/30/2011 - 14:49 | 2021731 hannah
hannah's picture

fall apart things do

hold The center cannot

upon the world Mere anarchy loosed

                   YODA

Fri, 12/30/2011 - 12:17 | 2021725 dizzyfingers
dizzyfingers's picture

Not anarchy: cartelism.

Fri, 12/30/2011 - 10:30 | 2021422 philipat
philipat's picture

And MASSIVE QE from ECB also. So why is Gold down? More manipulation like the sudden miraculous huge increase in Oil reserves at a time when US prop ahead of the Iran war was pushing up oil prices and which was, inconvenient? In the case of Gold, it would, of course, also be inconvenient should China stop buying Green in favour of the shiney stuff?

Fri, 12/30/2011 - 10:32 | 2021433 Hansel
Hansel's picture

Part of gold's smash has to be John Paulson liquidating some of his funds for redemption requests.  He's down >50% this year -- not in his gold fund, but I don't think some investors will care which of his funds are up or down.

Fri, 12/30/2011 - 12:34 | 2021751 VegasRage
VegasRage's picture

 

That part of the puzzle is easy, the paper metals SLV, GLD, and the CME have been trading 500:1 paper to the physical. These markets trade more in a month than is physically produced in an entire year. There are huge short positions by JPM and HSBC out there plus when the Commex doesn't like the price they raise margin requirements kicking people out of their contracts.

 

It's no surprise they picked the slowest part of the year to attack the price again, I think EUR and liquidation of paper positions is causing this drop. But there is already a detachment between melt price and physical price, SLV which is supposed to truly reflect melt price of silver per ounce is trading significantly below silvers actual melt price. As of this writing SLV price is 27.53 and the actual melt price of silver is 28.33.

If SLV represents the actual physical metal, how is that possible? 

 

Fri, 12/30/2011 - 19:12 | 2022782 fnord88
fnord88's picture

Having never bought paper I'm not sure how it works, but I know I havn't been able to buy physical over the holdidays. What better time to make gold look weak, than when nobody is actually able to buy any?

Fri, 12/30/2011 - 13:38 | 2021963 topshelfstuff
topshelfstuff's picture

 

You two [ Kirdkrid & LawsOfPhysics ] said it perfectly

 

""""Wake the fuck up, QE has never stopped....""""

 

"""It's the red herring about which people can focus their attention while the real work takes place.""""

 

Its like the way a Magician is trained and works on stage. Its all about getting the People to look at one hand, while its the other hand making the Move. Though its right there in front of the audience, it works, its human nature, a natural reaction that they know about and the one they are exploiting.

 

Still, to this day, with the assistance of the MSMedia that hasn't allowed any follow-up, we learned that some $16 TRILLION was Secretly dispersed starting in late 2008, while the People [audience] were all focused on the $700-$800 BILLION that Paulson was waving in one hand.

 

That was like 20 QE's or TARP's done, while 1 was in the hand everyone was looking at.

Fri, 12/30/2011 - 11:46 | 2021641 Kaiser Sousa
Kaiser Sousa's picture

"Wake the fuck up, QE has never stopped...."

sho' you right!!!

Fri, 12/30/2011 - 12:27 | 2021746 Triple A
Triple A's picture

so does that mean QE doesn't cause inflation unless QE was formally announced, also does it mean that instead of having gold and silver skyrocket it goes down even. Simply because they are not announcing it. If thats the case why would they ever announce it?

Fri, 12/30/2011 - 15:00 | 2022157 xela2200
xela2200's picture

That is why you are seeing so much volatility in the Precious Metal market. The proof will be in the next few months. I see it as the battle between market and The powers That Be. Volatility is the lighting and thunder. I suspect that next year will see the mother of all volatility for PM.

Just look at gold and silver this year. I think they gave me an ulcer.

And about inflation --> Just go to the supermarket. Trust me it is NOT 3% or 4%.

Fri, 12/30/2011 - 14:50 | 2022121 xela2200
xela2200's picture

I agree.

Lets see:

1- Foreigners Dumping treasuries - Interest rate up pressure

2 - National Debt increasing rapidly - interest rates up pressure

So we have selling combined with more issuance for government. How in heavens can interest rates be near zero? If not monetizing  the debt then I don't know what else it could be. Some wonder why the bond vigilantes haven't shown. Maybe, it is because they know the FED will squash them like bugs. The FED has no issues with monetizing the debt and they have signal the markets accordingly.

What I am having a hard time understanding why the strength of the Dollar? I know Euros are flocking to the dollar for safety, but why not hard assets (land, commodities, etc). All they seem to know how to do is buy each others' useless debt.

 

Fri, 12/30/2011 - 10:06 | 2021379 Oh regional Indian
Oh regional Indian's picture

That last line really says it all. It hardly matters anymore, it's blatantly rigged.

Treat this as a carefully scripted drama. If you don't have the text, no way you can plan and play. Winnings are fool's luck for most winners not in.

Who did the dumping? It should be open, common knowledge, not coming out in some report months after the fact.

Enjoy the last days of 2011 fellow ZHers. Next year is for reals!!!

:-)

ori

/world/

Fri, 12/30/2011 - 10:53 | 2021492 disabledvet
disabledvet's picture

The Tylers speak with forked tongue here and they know it. How about offering up an explanation instead of leaving it to The Commentariat? "What?" you say? And "give everyone the answer you already know?" Well wouldn't that spoil the New Years! Obviously the answer must be once the USA is downgraded the commercial banks are forced to buy what Robot Trader called perfectly "Uncle Gorilla Paper." Sure...angry sovereigns like "the country formerly known as China" have ordered the deployment of "the sell at the high so we can buy at the higher" weapon. That is their prerogative. I would not recommend that approach however.

Fri, 12/30/2011 - 11:32 | 2021605 gatorengineer
gatorengineer's picture

one of the worst stories ever on ZH.........  Eurobanks needed capital, selling Tbills no surprise.....  with LTRO watch for foreign ownership to soar as its an easy euroshort play.....  

Fri, 12/30/2011 - 12:40 | 2021779 LongBallsShortBrains
LongBallsShortBrains's picture

I think the news in this story is that the gorilla paper was being sold in record amounts and still going up or, at least, not dropping, implying that the invisible hand is buying.

My take anyway

Happy new years to all the hedgies. What a great site!!!!

Fri, 12/30/2011 - 13:48 | 2021984 gangland
Fri, 12/30/2011 - 08:38 | 2021228 tim73
tim73's picture

Are T-bonds biodegradable matter? Is it safe to wipe your behind with it? No rash? How about using one as a diaper for baby?

Fri, 12/30/2011 - 08:47 | 2021247 Snidley Whipsnae
Snidley Whipsnae's picture

Perhaps they are edible?

If so, the Brits need them since "Burglaries in the UK have doubled in 2011, doubled from the previous year. Theft of cattle and sheep has increased 2.7 times between 2010 and 2011. These are just are just small indications before anything has started to happen. People are poor, people are hungry.

This is just an early indication of what will happen in the next few years. People will have no money, people will be hungry, and therefore they will fight to get money, they will fight to get food. Sadly, we will have, in most countries, in European as well as the US, we will have serious social unrest. How far that will go is impossible to tell, but I am concerned.”


http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/29_Von_Greyerz_-_Gold_Will_Trade_$3,000_-_$5,000_in_2012.html

 

Fri, 12/30/2011 - 08:50 | 2021255 Ghordius
Ghordius's picture

"Theft of cattle and sheep has increased 2.7 times"

Borderers! Reavers! Quick, deploy the regiments to the Scottish Border!

ok, ok, bad taste, my excuses

Fri, 12/30/2011 - 08:55 | 2021257 Snidley Whipsnae
Snidley Whipsnae's picture

Haggis bitchez... can't find a brand on a plate of steaming haggis!

Fri, 12/30/2011 - 09:09 | 2021283 Ghordius
Ghordius's picture

haggis? the original recipy for CDO's?

Re: "we will have serious social unrest" - please remember that on this site we hear a lot of non-UK-Europe being hoplessly "socialist" - this includes social spending so that people do not get hungry and start to steal cattle and sheep - something the typical urban poor is not really equipped to do...

Fri, 12/30/2011 - 09:14 | 2021290 Snidley Whipsnae
Snidley Whipsnae's picture

"urban poor", motivated by hunger, can accomplish a hell of a lot more than most would believe.

Nothing like a lack of fish and chips to get folks off their asses.

Fri, 12/30/2011 - 09:23 | 2021304 Ghordius
Ghordius's picture

still not convinced - you need some capital (skills and means) to go out of the city, find sheep, kill them, eat them

cattle is even worse - you might love filet mignon but butchery needs space and equipment, you can't roast a calf like a marshmellow on your camp fire

much easier for the real poor to keep on their couches and waiting for what Brits call "the dole"

Fri, 12/30/2011 - 09:28 | 2021314 Snidley Whipsnae
Snidley Whipsnae's picture

England = nation of shopkeepers.

How many butcher shops do you reckon are in GB?

How many people in France knew how to make a guillotine?

Hunger = The Motivator

Fri, 12/30/2011 - 11:14 | 2021564 YBNguy
YBNguy's picture

Holomodor, BITCHEZ!

Fri, 12/30/2011 - 14:57 | 2022142 Loose Caboose
Loose Caboose's picture

Holodomor - looked it up.  I had no idea. There are large holes in my education, obviously.  That's what I love about ZH - I learn something new every day.  1932-33 isn't that long ago.  Just incredible.

Fri, 12/30/2011 - 12:44 | 2021800 LongBallsShortBrains
LongBallsShortBrains's picture

......How many people in France knew how to make a guillotine?

Very good point!

Fri, 12/30/2011 - 13:24 | 2021934 TheFourthStooge-ing
TheFourthStooge-ing's picture

...and a sharp edge as well.

 

Fri, 12/30/2011 - 15:04 | 2022165 xela2200
xela2200's picture

You can get a mean machete in Mexico.

Fri, 12/30/2011 - 15:51 | 2022276 Cathartes Aura
Cathartes Aura's picture

Britain is also a nation of street markets, and "wot fell off t'lorry" often gets traded hand-to-hand - and once those "themed" pubs get a reality make-over, there will be whispered trades at the bar as well. . .

creative survival. . .

Fri, 12/30/2011 - 10:53 | 2021493 DaveyJones
DaveyJones's picture

when the chips are down

Fri, 12/30/2011 - 09:27 | 2021313 Urban Redneck
Urban Redneck's picture

The last time I was driving thrugh DC at night I came across more deer than I usually see on my back porch in the back woods of Appalachia.  When the deer disappear from DC despite its government sponsored full employment and ban on firearms- then chaos will soon finally reach the Capitol.

Fri, 12/30/2011 - 10:57 | 2021499 ExpendableOne
ExpendableOne's picture

Crossbow and flashlights!

Fri, 12/30/2011 - 11:12 | 2021552 YBNguy
YBNguy's picture

I hated DC and NOVA, Im so glad I moved an hour south. Talk about resistence to integrate and rampant illegals loitering outside the 7-11 (under the 'no loitering' signs that got me and my friends removed many times when I was younger, yet does not seem to apply to the aliens...). One block was all spanish (mexican) apts. with their own shopping centers all in Spanish, next was the Middle-eastern section with similar communities and stores in only Arabic, then the Koreans, followed by the Vietnamese, you get the picture...

Fri, 12/30/2011 - 11:57 | 2021668 swani
swani's picture

That's why NOVA has such good food. 

Fri, 12/30/2011 - 10:59 | 2021503 disabledvet
disabledvet's picture

France will vote Socialism/Statism in the New Year...and it will be the smartest thing they have done since putting...was it Fouchet?...in charge during WW I. And trust me when I tell you: you have not heard the last of Dominque Strauss Kahn. Ideally he'd be the EU's Defense Minister.

Fri, 12/30/2011 - 10:19 | 2021408 Potemkin Villag...
Potemkin Village Idiot's picture

Haggis.... Now that's some good shit there!

Fri, 12/30/2011 - 10:31 | 2021430 Snidley Whipsnae
Snidley Whipsnae's picture

PV... Not on every site can one read about the effects of haggis on the economy of a soverign! Be thankful you have ZH... if only for entertainment... but we know it's much more.

Happy New Year to You and All that Frequent ZH... excluding the trolls of course.

Fri, 12/30/2011 - 11:18 | 2021574 Potemkin Villag...
Potemkin Village Idiot's picture

Don't forget to mention the 'neeps' & 'tatties'...

Happy New Year!

PVI

Fri, 12/30/2011 - 15:57 | 2022294 Cathartes Aura
Cathartes Aura's picture

haggis, neeps & tatties - you lads are gearing up fae Burns night upcoming, are y'no? 

a wee dram of single malt raised to you both, and all here

Best New Year's Wishes - 2012, ooooh yes!

Fri, 12/30/2011 - 11:14 | 2021562 _underscore
_underscore's picture

Not sure where that report got its figures from, vis-a-vis Uk burglaries (& by implication, crime generally), but actual statistics show burglaries with 'only' ~14% increase & other 'recordable crimes' are actually decreasing on some metrics. I fully support the idea of rising PM prices, but the crisis & mayhem societal breakdown view is perhaps just a bit over-done sometimes. Maybe for a pernickity Swiss guy an errant sweet wrapper blowing down the street marks the start of the SHTF scenario, but the phlegmatic British need the minimum of invading columns of infrantry & tanks to delay or disrupt tiffin. The London riots were just a bit of opportunistic credit-card-less shopping for the most part, but the PTB will have a more robust response ready next time. The more Latin european states, I'm sure, will enjoy a bit of argy-bargy & the French, gawd bless 'em, will have the barricades up  quicker than you can say  common agricultural policy (or whatever that is in French..).

In the UK, you have to remember, we have 'social unrest' every friday/saturday/sunday night as Joe & Josephina Bloggs, fresh from lying on the couch in front of the plazzy all week,  get well para on happy-hour Bacardis & pints of wife-beater - nothing to see here move along now. This has been going on for decades (maybe even centuries..!) now, quite happily; the only real downsides are the lakes of vomit & mountains of discarded kebab (half-eaten, naturellement!) wrappers littering our crumbling high streets the next morning. So no, I don't see the 'Assault on Precinct 13' way of doing things in Great Beligerance (I mean Britian), you've got more chance of revolution & mayhem if you look at someone 'funny' than you would from people starving or freezing to death - we can take all that nonsense in our stride dear boy.

 

 

 

Fri, 12/30/2011 - 11:41 | 2021630 mick_richfield
mick_richfield's picture

Same as it ever was.  Sure thing guvnor. 

There are lots of things in this world that look the same as they ever were, until they change radically and discontinuously.  Ice becoming thinner on a pond.  A building that rots for a hundred years and falls down in a day.  European politics in 1913.

You are seven meals and two Happy Hours from anarchy.

 

 

Fri, 12/30/2011 - 12:00 | 2021674 swani
swani's picture

Most of the Brits with the revolutionary spirit left for the colonies a long time ago.   

Fri, 12/30/2011 - 14:57 | 2022149 Tijuana Donkey Show
Tijuana Donkey Show's picture

Paging Scotland, paging Scotland, your table is ready......

Fri, 12/30/2011 - 11:30 | 2021601 mick_richfield
mick_richfield's picture

Sadly, we will have, in most countries, in European as well as the US, we will have serious social unrest.

That is not sad at all.  What is sad is seeing people mindlessly selling their lives and their children to a social order controlled by psychopathic mouth-breathing reptilian greed-robots.  Proto-human cattle endlessly hoping that their vampire masters really do have the best interests of "the people" at heart.

I'll take the social unrest, thank you.  I don't need another 500 years of this bullshit.

Welcome to Tyler's Rebellion.

 

Fri, 12/30/2011 - 15:07 | 2022169 xela2200
xela2200's picture

Agreed. I don't want any of their BS social programs. I will take my chances. Just stop stealing my money and my liberties.

Fri, 12/30/2011 - 19:51 | 2022858 Cathartes Aura
Cathartes Aura's picture

agree with you both - no to government interference in ANY-body's business.

Fri, 12/30/2011 - 12:57 | 2021839 RafterManFMJ
RafterManFMJ's picture

 

 

Little note about Ye Olde English crime - they scam their numbers to the point that they are meaningless.  If you break into an apt. building, kick in 40 apartment doors and rob the people, that is counted as one break-in.

Most people don't even bother calling da cops for simple crimes like burglary; and if they do the cops don't bother to show up.

http://www.telegraph.co.uk/news/uknews/law-and-order/7922755/England-has-worse-crime-rate-than-the-US-says-Civitas-study.html

 

 

England has worse crime rate than the US, says Civitas study England and Wales has one of the worst crime rates among developed nations for rapes, burglaries and robberies, a major report has found.

 

I was going to continue - but really you've been here long enough and you know if it's a number presented by da government anywhere on Earth with the possible exception of Singapore or Switzerland, it's pretty much an pernicious lie designed to cover the discomforting facts. 

Fri, 12/30/2011 - 09:46 | 2021333 midtowng
midtowng's picture

I would like to see these charts compared to 2007-2008. It would tell us more whether this selling is either a general rush for dollars, or just dumping dollars.

Fri, 12/30/2011 - 08:39 | 2021231 postmortem
postmortem's picture

Default unto thyself commanded the lord...

Fri, 12/30/2011 - 08:39 | 2021232 AUD
AUD's picture

Does the Fed hold all foreign owned UST's in its custodial account?

Fri, 12/30/2011 - 09:05 | 2021275 FinHits
FinHits's picture

Hah, as a custodian service the Fed could just buy all foreigners out of their position. That would be nice of them, and a patriotic way to do a QE!

Fri, 12/30/2011 - 10:20 | 2021411 Potemkin Villag...
Potemkin Village Idiot's picture
Foreigners Dump Record Amount Of US Treasurys In Past Month

But RoboTrader has been telling us all for weeks about the INSATIABLE appetite for US Gov paper...

 

Fri, 12/30/2011 - 11:45 | 2021639 mick_richfield
mick_richfield's picture

The guests' appetites appear insatiable indeed, until you notice how often they are excusing themselves to visit the vomitorium.

Fri, 12/30/2011 - 15:19 | 2022211 Iwanttoknow
Iwanttoknow's picture

Robo channels Bernanke and Geithner.

Fri, 12/30/2011 - 10:38 | 2021445 Hansel
Hansel's picture

No, not all (I don't think).  They currently hold $2.68 trillion in treasuries for foreign accounts.  See section 1A of the following link.

http://www.federalreserve.gov/releases/h41/current/

Fri, 12/30/2011 - 08:56 | 2021235 Zola
Zola's picture

This is exactly why nothing made sense at all this year. For every direction that a free market would have taken , the opposite central planning action was applied. Result , going nowhere but the gravitational riptide is getting stronger and stronger. Event horizon here we come.

Fri, 12/30/2011 - 08:42 | 2021237 Bullwinkle Moose
Bullwinkle Moose's picture

For every sell there is a buy. Who is buying all of this paper?

Fri, 12/30/2011 - 08:45 | 2021243 fonzanoon
fonzanoon's picture

EXACTLY. Who is buying all of this paper? At what prices? How is this happening with no effect on yields?

Fri, 12/30/2011 - 08:56 | 2021259 boricuadigm-shift
boricuadigm-shift's picture

Select one below:

1.  Hard-working-unemployed american sheeple

2.  Retirees that depend on fixed incom

3.  China via black market ;-)

4.  Hedge funds - selling paper gold and buying paper paper

4.  The Fed

Was the question rhetorical?

Fri, 12/30/2011 - 09:00 | 2021270 GeneMarchbanks
GeneMarchbanks's picture

Non-rhetorical question: what comes after four?

Fri, 12/30/2011 - 09:12 | 2021288 Alex Kintner
Alex Kintner's picture

"Horsemen"

Fri, 12/30/2011 - 09:18 | 2021296 GeneMarchbanks
GeneMarchbanks's picture

Touche.

Fri, 12/30/2011 - 11:47 | 2021646 mick_richfield
mick_richfield's picture

God, I love ZH.

Fri, 12/30/2011 - 13:38 | 2021964 TheFourthStooge-ing
TheFourthStooge-ing's picture

The leading horse is white...

http://www.youtube.com/watch?v=_8MJVBjhK0s

 

Fri, 12/30/2011 - 09:50 | 2021341 old naughty
old naughty's picture

the one riding a white horse with bow and arrows ready to shoot.

Fri, 12/30/2011 - 10:23 | 2021418 Potemkin Villag...
Potemkin Village Idiot's picture

Rumore has it that the Bernank wrote a paper on that subject, as well, at Princeton...

His conclusion is that if he just says... "Fuck you & the horse you rode in on", it'll all stop...

Fri, 12/30/2011 - 09:16 | 2021294 boricuadigm-shift
boricuadigm-shift's picture

It depends who is counting, but thanks for bringing it to my attention! :-)

Fri, 12/30/2011 - 09:22 | 2021301 GeneMarchbanks
GeneMarchbanks's picture

It is entirely possible to view the Fed as the worlds biggest hedge fund. Totally hedged, like MFG.... was.

Fri, 12/30/2011 - 09:31 | 2021319 Ghordius
Ghordius's picture

yeah, but in theory it mostly holds gold and owes FRNs, while the UST position is neutral...

not that badly positioned, for a financial institution

remember: Zimbabwe did lose their currency, but the National Bank is still there and it's Chairman too!

Fri, 12/30/2011 - 11:04 | 2021522 disabledvet
disabledvet's picture

The guy who looted the country (aka "The President") has to keep his money somewhere. The country's Central Bank seems like a good place.

Fri, 12/30/2011 - 09:02 | 2021272 Snidley Whipsnae
Snidley Whipsnae's picture

5. Retirement/401K plans trading worhtless equities for worthless Tbills... soon to be mandatory.

Fri, 12/30/2011 - 09:23 | 2021306 fonzanoon
fonzanoon's picture

Okay I accept all those answers. Is the amount too small to make a dent in price/yield?

Fri, 12/30/2011 - 09:42 | 2021323 Urban Redneck
Urban Redneck's picture

It's a great time to dump treasuries if you have some place else to go with the proceeds, since the prices are high regardless of whether Ben is sitting on the Bid or TBTF is swallowing up every Treasury in sight so that it can avoid lending to the little street urchins, or their backstabbing TBTF brethren, who they know better than to trust.  The more interesting question to me is, who found a better place to go, and where? (other than the Chinese and Japanese and their new bilateral fiat ponzi exchange game)

Fri, 12/30/2011 - 11:07 | 2021532 disabledvet
disabledvet's picture

Not the gold/euro pair trading bugs that's fer sure. I've parked my money in GE.

Sat, 12/31/2011 - 03:41 | 2023361 FlyPaper
FlyPaper's picture

If the US banks are in as bad of shape as I suspect they are (off-balance sheet) then you have 2 options.  You can sit in cash in a bank - with a whopping $7b or so in the FDIC's bank-run fund; or you can sit in ST government paper.

if the banks need another bailout (when?) then the FDIC is broke, and where does the FDIC go for funding to pay back depositors?  The US treasury.  And where does the Treasury go to get authorization to sell lots of bonds to support the FDIC?   Congress.

I'm a bit suspicious that this Congress will easily go along with another TARP.  Hence, while the politicos are duking this out, where does the $ come from for the withdrawls?   Bank holiday?  Capital Controls?

If you are in Treasuries, *and* there is still a market, you can at least liquidate them.  But if the money you get from the liquidation goes back into the bank you might well be stuck, no?

The gold dealers won't be able to trade without a functioning banking system either.

Hence - as a practical matter, where does one put their liquid assets?  If they do a bank holiday, a currency devaluation can't be far behind?

Ammo?  PMs?  Some Cash?  Canned goods?

 

Fri, 12/30/2011 - 10:42 | 2021458 Hansel
Hansel's picture

fonzanoon,

No effect on yields?  The 10 year UST opened the year at 3.3%, and now with all the selling yields 1.88%.  :P

Fri, 12/30/2011 - 12:31 | 2021759 NotApplicable
NotApplicable's picture

It's freakin' magic, I tell ya. The more they sell, the higher they go!

ZIR4EVA = Today's perpetual motion machine.

What brings tomorrow?

Fri, 12/30/2011 - 08:58 | 2021263 peekcrackers
peekcrackers's picture

right hand pushes paper  , and left hand hords physical

Fri, 12/30/2011 - 10:15 | 2021398 hamurobby
hamurobby's picture

 The little guys will get blocked far from the exchange window, once deep pockets get really nervous. 

Fri, 12/30/2011 - 08:42 | 2021239 youngman
youngman's picture

I am suprised it is not more.....but this is where it will start....they will dump and the feds will HAVE to buy it all....and fast....

Fri, 12/30/2011 - 10:44 | 2021468 Hansel
Hansel's picture

I think that is what the swap lines are for.  They can dump, the Fed can buy, and there is no effect on the 'market.'

Fri, 12/30/2011 - 11:09 | 2021539 disabledvet
disabledvet's picture

"Uncle Gorilla" indeed.

Fri, 12/30/2011 - 08:43 | 2021240 YHC-FTSE
YHC-FTSE's picture

Is it me, or is this headline becoming a monthly occurrence?

 

Fri, 12/30/2011 - 08:48 | 2021251 Tyler Durden
Tyler Durden's picture

The good thing about records is they can always be broken.

Fri, 12/30/2011 - 09:05 | 2021258 Ghordius
Ghordius's picture

ehmm. two things

the reference to "bringing total UST custodial holdings to $2.67 trillion" is a bit cryptic for most

the non-reference about the relative size is even more cryptic for most - I mean it looks a bit stabilized, doesn't it?

Happy New Year, Early-Morning-The-EUR-will-be-history-in-a-few-days-Tyler, I wish you a prosperous year with many happy moments

(while I'm here: EURUSD over 1.425 in a few months - the EZ might shed Greece + a couple of other peripherals and hold the year)

a fan of your site

Fri, 12/30/2011 - 08:58 | 2021261 postmortem
postmortem's picture

or burned/shredded

Fri, 12/30/2011 - 08:59 | 2021268 Snidley Whipsnae
Snidley Whipsnae's picture

Baylor vs Washington = three zillion points scored. So, so entertainment compared to Christians vs Lions.

Happy New Year

Fri, 12/30/2011 - 09:12 | 2021287 cheeseheader
cheeseheader's picture

Or Badgers and Ducks....

Fri, 12/30/2011 - 09:55 | 2021353 WmMcK
WmMcK's picture

Sort of like promises ...

Fri, 12/30/2011 - 10:54 | 2021479 DaveyJones
DaveyJones's picture

and labelled state secrets

Fri, 12/30/2011 - 12:55 | 2021841 LongBallsShortBrains
LongBallsShortBrains's picture

Like a broken record. Playing over and over the same shit.

Fri, 12/30/2011 - 15:26 | 2022226 Iwanttoknow
Iwanttoknow's picture

Dear Mr Durden,

Thank you for the most enlightening blog I ever  stumbleded upon.If I can make a humble request.Using souces as MEMRI and YNET puts a blemish on what in my opinion is the best source of financial news in english languange,perhaps in all language.

Fri, 12/30/2011 - 16:24 | 2022317 YHC-FTSE
YHC-FTSE's picture

I know this is addressed to one of the Tylers, but you're on my thread, so....

 

I agree with you about such sites as MEMRI and YNET, but that does not give anyone the right to tell another individual where he/she should source their materials to publish. In the words of Sun Tsu,

"It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle."

Most seasoned members know their material. It takes very little effort to search the truth, or whatever truth that suits you best. It takes even less effort to search facts. If any stupid stuff gets posted, you will know soon enough - that's the whole point of the comment section which is usually far richer than the articles themselves. 

 

(I haven't done any replies to any Israeli-Zionists stuff for AGES, simply because I don't want to upset any decent Jewish folks who have similar abhorrence of zionists nutjobs, and because the moment anyone uses the J-word, even politely, a torrent of crap usually comes my way starting with anti-semtic xxxx, whatever that means.). Zionists and Israelis have one trick that no longer works - the fake victim complex, so please don't encourage them to revive it by trying to ban their views from this site.

Fri, 12/30/2011 - 20:15 | 2022886 Cathartes Aura
Cathartes Aura's picture

+1 YHC-FTSE.

as long as we have the "right to reply" to each post, I don't mind what site gets cited - although I'd appreciate the actual site link not be embedded in text, a minor point, but yeah.

also, as amrka ramps up yet another "election" year sporting event, the religious arguments will increase as well, moving from the Z-folks to the C-folks and the M-folks - sharpen the sticks ye defenders of your realities, 'twill be fractious ahead!

Fri, 12/30/2011 - 11:10 | 2021548 disabledvet
disabledvet's picture

Take the red wrapping off your eyes and I'll tell you.

Fri, 12/30/2011 - 08:50 | 2021242 GeneMarchbanks
GeneMarchbanks's picture

Last time there were consecutive months of dumping, it was made up for in a week. Schizoid stuff, no real established trend...

Fri, 12/30/2011 - 09:24 | 2021307 boricuadigm-shift
boricuadigm-shift's picture

Since we like to entertain theories lets take a stab at this:

1.  The Fed owns a custodial account and it may be painting the chart.

2.  Euro "scare" pattern? 

3.  China is strategically painting the chart so they are not the last one holding the bag.

4.1. No chart painting, it is all legitimate true market trading.

Fri, 12/30/2011 - 09:41 | 2021329 GeneMarchbanks
GeneMarchbanks's picture

All plausible IMO. I see you stopped at '4' again?

Fri, 12/30/2011 - 10:46 | 2021473 Hansel
Hansel's picture

I wonder, does the Fed rehypothecate its custodial accounts?

Sat, 12/31/2011 - 06:06 | 2023399 mt paul
mt paul's picture

hmmmm...?

Fri, 12/30/2011 - 08:46 | 2021244 freethinker4now
freethinker4now's picture

Word is Bond..Everlast....Paper is...? Well it's paper stupid

Fri, 12/30/2011 - 08:46 | 2021245 toadold
toadold's picture

Corportations are reportedly down grading expected 4th quarter profits. So naturally it is time to.....put our money in.....uh...hand me that glass of KoolAid would you. 

Fri, 12/30/2011 - 08:46 | 2021248 supermaxedout
supermaxedout's picture

This is the end of the US Dollar hegemony or its the time the US lets down its mask and shows the world its true face. The "face of war" is the true face of Washington/Wall Street. Dirty, ugly, hellish, cruel but as we all know and have learned democratic.

I wonder why nobody is realizing what the currency agreement between Japan and China is. Its simply the creation of a new world currency. Lets called it the "Yoin".  China and Japan have agreed on more or less fixed rate between Yuan and Yen thus it does not matter anymore if one has Yuan or Yen at hand  within Asians biggest economies, which are forming a block of greater importance than the Eurozone.

This formation cuts the power of Wall Street/London at least by half if not more. It is now nearly impossible for the US to speculate against the Yen since the Yen is now also backed by the Yuan. Just like in Europe the Euro, the Yen slipped also under the Chinese roof to be protected from the thunderstorm initiated by the flood of new printed US Dollars.

Now its clear for me to see why Iran is threatening to close the Strait of Hormuz, so that Japan can not gets its oil. And of course Iran also wants to close this narrow path because when its closed Iran can also not any longer ship its oil to China. The only remaining client. All others were already cut-off by the US.   Ha, Ha,Ha.    Its unbelievable how stupid the world seems to be, to believe the US propaganda that Iran wants to close the Strait of Hormuz.  

No its just the other way round in my opinion. The US is threatening Japan that the oil and energy needed for its economy is stuck on the way by action of these Iranian terrorist which are sprading terror and war all over the world. Nearly everywhere in this world is a war zone, whether a Currency War (cold war) or hot war like in Syria, and before Lybia not to mention Afghanistan and Iraq, Yemen, ..., ..., ....  And this is all the fault of Al Quaida and the Iranian terrorists which want to destroy Israel with nuclear bombs while Israel is ready to deploy a nuclear overkill to the whole region and Europe included if they want. Israel has more warheads than Britain and France combined as far I have read on the lovely internet. So it is clear that Iran is no danger to Israel at all because it would be suicide for Iran.

So this is now a time of great decisions and lets hope the best and be prepared for the worst. Happy New Year 2012.

Fri, 12/30/2011 - 09:06 | 2021277 Snidley Whipsnae
Snidley Whipsnae's picture

Brings to mind "Remember the Maine" or "Gulf of Tonkin" ...

Both proved to be bs...

Fri, 12/30/2011 - 09:49 | 2021339 blindfaith
blindfaith's picture

anyone who says 'you just can't write this kind of stuff' doesn't read ZH.  Anything is possible in this manulipilated world, however...the hate that IS between China and Japan will not vanish for generations. For that matter, the distrust and hatred bewteen all these Asian countries make the near and middle east nutcases look like buddies.

Just because the Japanese don't appreciate all the US dollars poured into Japan via the military, doesn't mean they don't like Disneyland.

Fri, 12/30/2011 - 10:00 | 2021359 rufusbird
rufusbird's picture

You post left me with the question. "Where does Israel get it's oil?" After reading what I can find on the subject, I now have a new perspective on Middle Eastern hostilities...They need to secure a source for oil...

Fri, 12/30/2011 - 11:17 | 2021572 disabledvet
disabledvet's picture

In fact Japan needs a secure place to get their nat gas...oil is so 20th Century people! There are currently only two operating nukers in all of Japan. You ain't making "the spy juice" with oil. And of course Iran knows this...and wants to close the Straits due to NAT GAS exports...not oil.

Fri, 12/30/2011 - 16:12 | 2022338 supermaxedout
supermaxedout's picture

Not long in the future Israel is going to be a natural gas exporter because in front of Israel/Gaza Libanon/Syria and the Island of Cyprus there is a giant natutal gas field. My opinion is much of the Syria trouble has to do with this gas field.

Natural gas is a perfect substitute for oil. Trucks, tractors, buses all run on natural gas and the engines to run natural gas are already easily available. Caterpilar bought last year a leading engine manufacturerer in Germany (Mannheimer Motorenwerke) specialized on engines for heavy equipment running on natural gas.

Fri, 12/30/2011 - 10:59 | 2021504 roccman
roccman's picture

hmmm...iran is on the same team as china and the US.

 

peak oil can no longer be papered over.

time for an "oil embargo" - then rationing...then martial law...then the Great Kill Off.

 

 

Fri, 12/30/2011 - 10:59 | 2021505 DaveyJones
DaveyJones's picture

"This formation cuts the power of Wall Street/London at least by half if not more"

considering the head count, I'd say more

nice post

Fri, 12/30/2011 - 11:20 | 2021578 Bicycle Repairman
Bicycle Repairman's picture

supermaxedout, you should comment more.

Fri, 12/30/2011 - 11:50 | 2021652 Oliver Jones
Oliver Jones's picture

They should call it the Yoink.

Then, at least, when we refer to the plural, the name and sentiment shall be consistent.

Fri, 12/30/2011 - 08:48 | 2021250 Bullwinkle Moose
Bullwinkle Moose's picture

Auntie Em Auntie Em. There's no place like home. There's no place like home.

Fri, 12/30/2011 - 09:53 | 2021348 WmMcK
WmMcK's picture

Click your heels together (and watch me pull a rabbit out of my hat).  Neither will work this time. 

Fri, 12/30/2011 - 10:40 | 2021452 Bullwinkle Moose
Bullwinkle Moose's picture

We sure aren't in Kansas anymore!

Fri, 12/30/2011 - 08:48 | 2021252 Quinvarius
Quinvarius's picture

I am pretty sure we know who is buying that garbage.

Fri, 12/30/2011 - 08:49 | 2021253 Bullwinkle Moose
Bullwinkle Moose's picture

The only thing missing is the flying monkeys.

Fri, 12/30/2011 - 08:58 | 2021265 Bullwinkle Moose
Bullwinkle Moose's picture

We have wicked Ben of the west and wicked Tim of the east.

Fri, 12/30/2011 - 09:16 | 2021293 tim73
tim73's picture

http://www.youtube.com/watch?v=IJYr8sdTnkc

More like driving ones but still equally assholes.

Fri, 12/30/2011 - 08:53 | 2021256 SimpleandConfused
SimpleandConfused's picture

Meanwhile, here in the US, people are dumping money all over Disney:

http://www.breitbart.com/article.php?id=CNG.be6baae328c9eb609027cab51eb6bf35.3a1&show_article=1

How can it be that we are on the edge of collapse and Disney doesn't have the capacity to handle the Christmas vacation crowds? Confuses me to see this kind of disconnect.  I don't drink; maybe that's the problem.

Fri, 12/30/2011 - 08:58 | 2021262 GeneMarchbanks
GeneMarchbanks's picture

'I don't drink; maybe that's the problem.'

Plenty of chances for developing a substance abuse problem upcoming. Don't feel like you're behind at all...

Fri, 12/30/2011 - 09:02 | 2021271 fonzanoon
fonzanoon's picture

It is clearly not drinking. I drink frequently and ponder the same questions. I also invest on some of these premises which only increases my confusion and decreases the money available for future alcohol consumption. It is quite the conundrum. Sometimes I think everyone I interact with everyday are completely nuts and then when I see the market up 140 pts I think everyone on this site is completely nuts.

Fri, 12/30/2011 - 10:14 | 2021393 fuu
fuu's picture

I have always found the toughest bias to overcome is that sanity exists.

Fri, 12/30/2011 - 14:08 | 2022026 TheFourthStooge-ing
TheFourthStooge-ing's picture

In an insane world, the sane will appear crazy to others and will frequently question their own sanity.

The time to start worrying is when everything seems just fine.

 

Fri, 12/30/2011 - 11:55 | 2021661 mick_richfield
mick_richfield's picture

It is quite the conundrum.

I never use those. 

Fri, 12/30/2011 - 14:17 | 2022052 TheFourthStooge-ing
TheFourthStooge-ing's picture

Very wise. Mixing conundrum and alcohol is a bad trip. You're better off sparking up a jay and putting on the headphones.

Yo, slewie! It's jay time!

http://www.youtube.com/watch?v=DVx00Wv-Kdg

 

Fri, 12/30/2011 - 15:38 | 2022247 fuu
fuu's picture

You give great music.

Fri, 12/30/2011 - 09:11 | 2021285 dynomutt
dynomutt's picture

Disconnect?  No.  Where would these middle-class types go to visit if they want to get a cheaper facsimile of Europe or Asia that actually accepts USD?  That'd be EPCOT.  These crowds are those who would have gone to Western Europe on winter break but are opting to stay closer-to-home where the money is still accepted.  I wouldn't be surprised to see a temporary resurgence of former regional entertainment venues as well as the cost and resistance (TSA) to travel from region to region of the country goes up.

Fri, 12/30/2011 - 10:05 | 2021376 SimpleandConfused
SimpleandConfused's picture

Excellent thesis!  I am less confued and I thank you.

Fri, 12/30/2011 - 14:19 | 2022059 TheFourthStooge-ing
TheFourthStooge-ing's picture

TSA: Tourism Strangulation Agency

 

Fri, 12/30/2011 - 09:18 | 2021295 Snidley Whipsnae
Snidley Whipsnae's picture

Disney spending = credit cards

A lot of people take this Mayan Calander end date seriously. Why not max out the plastic if this is the last year for Homo Saps?

Fri, 12/30/2011 - 10:26 | 2021424 SheepDog-One
SheepDog-One's picture

50% off Groupon tickets, the rest on the credit card. Personally I couldnt think of anything more horrible than spend Christmas at Disneyland, but whatever.

Fri, 12/30/2011 - 10:41 | 2021457 Snidley Whipsnae
Snidley Whipsnae's picture

+1... I live within 100 miles of the place and have never been there. The wife takes the grandkids... before they grew up.

I would rather spend a day on the water fishing or watching the birds or go for a bike ride... anything to avoid standing in long lines with a bunch of idiots.

Once, back when Key West was full of hippies, I was watching a sunset on Mallory Dock ... when the sun sets it's traditional for those watching to applaud (I don't know why)... a woman standing near me said to her hubby...'It's a sun set. Have you seen one before?.'... They belonged at Dizzy Land.

Fri, 12/30/2011 - 11:00 | 2021508 Stax Edwards
Stax Edwards's picture

I am in Orlando for the Bowl games and the city is packed.  I had heard all of the theme parks closed the gates to additional guests and stayed open late yesterday.  Believe it, the recovery is real IMO.  Real economy cares not how much debt our government has.  They care about having fun and playing with their kids, watching football, etc.  

My advice: Try to lighten up this year guys, be happy.  Don't get caught up in all of the end of the world stuff or worry so much about the government debt.  You alone cannot change it anyway.  Get outside and enjoy life.

Happy New Year to my fellow Hedgers!  May all of your trades be profitable this year, whatever your investment vehicle may be.

Fri, 12/30/2011 - 12:29 | 2021750 viahj
Fri, 12/30/2011 - 08:58 | 2021264 Schmuck Raker
Schmuck Raker's picture

All Is Well!

Move Along.

Nothing To See Here.

 

Happy New Year

Fri, 12/30/2011 - 09:05 | 2021274 vegas
vegas's picture

Unless you forced to, why would you buy this shit? With all that we know regarding the finances of Amerika, 10 and 30 year treasuries have no place to go but down in price [up in yield]. And when that happens, there shouldn't be anybody with a profit in this stuff.

 

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