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Foreigners Dump Record Amount Of US Treasurys In Past Month
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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If interest on Ts moves up to historic range... Kaboom!
ZIRP forever is Ben's answer.
Invest accordingly.
And the hottest selling item of Christmas has been in the US: Guns. Circle your SUVs, The Bloodthirsty Hordes of Native Indians are coming to get you and your blonde wife! Or was it Mexican drug lords, hard to keep up with latest developments.
Are we sure it was foreigners? Looks like someone needed money, a liquidation maybe?
Gotta stop scratching my head!
A one point increase in the interest rate...will put 90% of these bondholders in the red....and the USA deficit much higher.....SOOOOOO..the only way forward is that Ben will print....and print so much that they will buy it all..the 1.2 trillion in printed deficit..the 1.5 more in offsheet deficit..and all the bonds that foreigners will be sellling...then what do we do....sit back and watch because there is nothing you can do...they will do it...we assume that printing will lead to inflation....they can´t have that because that will lead to bigger defecits....so it goes exponential...got gold
Youngman... Mayans saw this economic debacle coming. Mayans had gold but they didn't have a central bank.
Therefore, Mayan Civilization must have collapsed for lack of central planning. :0)
"got gold"? ... definitely!
Happy New Year
don't forget to mention that Mayans did not use gold as a currency!
and the Inca Empire has central planning without a recognizable currency
Happy New Year
Yeah but they used to sacrifice a lot of people...a lot....in fact they probably killed themselves...who needs gold when you have a skullbone..
Mayans saw an economic trouble from a couple thousand years ago? No, what they saw was astronomy, the 2012 changing from Pisces to Aquarius.
SD1... You're missing my humor... Do you really want me to use the 'sarc'?
What good was the Mayan calendar if they didn't have a debt-based economy to which they could apply it?
They didn't even have compounding interest, for crying out loud. Friggin' astronomy and planting schedules - how useless is that shit?!
Wait a tick, this is the dawning of the age of Aquarius? Now I know I've been lied to.
Rick Santelli if you read this thank you, you just answered the question I had about euro decline, dollar increase on swaps.
what was your question? What was his answer. He is a voice of reason on an otherwise shit channel.
Not knowing anything about swaps, I couldn't figure out what the impact of the euro declining
and the dollar rising worked on the swaps. He said its a fixed rate and the fed is short the
dollar on the swap so they are losing money on this. Now I want to know how much$$$$$.
This sounds like Jim Rickards speak. :)
Can anyone explain for this dunce how this meshes with the idea of Treasuries as a "safe haven?" I was under the impression everyone was rushing into US debt because our HIV hasn't developed into full-blown AIDS yet.
Einstein said it best... relativity.
US dollar is still the most used currency for settlements.
US T Market is still the largest and most liquid.
EU, Japan, China, etc, seen as riskier than US.
Central Banks working in concert to make commodities/PMs look risky and paper look safer than it is...plus PMs are a tiny and shallow mkt compared to soverign bonds...but a few more MF Globals will change this view.
Rest of World doesn't realize that the US consumer model is broken. ROW believes that biz as usual will continue after a bump in the road recession = hopium.
Starting to make a little more sense, thanks.
Chump asked:
It's kind of like America exporting freedom and democracy. It doesn't matter if it's true or not, only that enough people accept it without thinking.
Couldn't this be the other side of the PBoC offsetting private investor flows out of RMB - by selling $ assets & buying back RMB? (Identificable in dropping Chinese foreign reserves & the recent ZH article about intra and interday RMB movements...)
So, McDonalds the stock of the year on the idiot channel. Yup success. What does that tell us. This is how we "eat out" now.
On the Disney story, many have said they wanted to do this and "they are back in debt" to do it.
And my favorite bank...from Bloomberg.
BofA Posts Worst Showing in Dow Average
The only question is when does this broken disgusting company go to 2 bucks a share.
2 days does not make a statement, but maybe, just maybe the worthless relic has bottomed. Never, in the years I have invested in gold have I seen so many bearish posts. From Soros to Bloomberg, WSJ and of course MSM. Never. A tell? We shall see. Long physical and getting longer.
So, McDonalds the stock of the year on the idiot channel. Yup success. What does that tell us. This is how we "eat out" now.
It tells us that there are many people out there for are pressed for funds but also lack the culinary skills to boil water.
Staple foodstuffs are still (historically) very cheap yet we have this record foodstamps/record obesity situation too. Most people you see buying bulk (and cheap) beans and rice in the supermarket weren't born in this country.
Well someone is buying USTs. Look at dem rates...
http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Any chance that the "foreign, official and international accounts" category excludes some types of non-US holders?
The clowns are back in the news. Gold is shit, paper assetts are the new safe haven!! lol!
Paper asshats worn by bobble heads doing the bidding of their masters.
LOL @ MFL8240
" Gold is shit, "
I'ts the shit the central banks Love hording
The Perth Mint is running 24/7 is what I read from the Goldbugs...same for the Canadian Mint.
Oil has been very strong throughout also.
Can it be the Fed is buying its own paper thru "hidden" dealers?
This is the TRUE reasson for the FX-swap. Not to save european banks (eventhough it help the banks)
FX swap raisson d'etre: Make it eassier to maintain leverage for the USD assets owned to protect prices from plunge from forced liquidations.
99% of all Treasuries purchased the last 35-years are in a winning position.
Nobody is selling.
Everyone is buying.
Who doesn't like a winner?
a fool always remains a fool.............
Did you post a link to a RP speech in Iowa yesterday? I tried looking for it last night and failed. Feel like posting it again?
ok , uno minuto......
http://www.ronpaul.com/2011-12-29/ron-pauls-speech-at-the-veterans-rally-in-des-moines-iowa/
now they are saying romney is in the lead. wtf?
Ah thanks for the link.
Cheerleaders will cheer while the game plays on.
i haven't voted since 1980. i will make it an exception for this little old man from texas. i want to be sure my name is on the "list" just so they know if they don't know already. i figure they are going to either fuck him over somehow or kill him. either way, this just about does it as far as i am concerned. after paul, no one will come. no one...........paul perhaps is a man that comes from a different time , a man from the past. a man who road into the presidential politics of a dying nation, a pale rider, riding a pale horse.........
While I do not see eye to eye with you on everything I will gladly share a spot on the list with you.
"When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle."
Plz add me to yoar lits OK thx bai
caught the radio this morning noting his rise then quickly cutting to his "dangerous" foreign policy which leaves the Iranians alone
HPD,
Robo's not a fool.A failed AI experiment.
Robo,
http://www.bbc.co.uk/news/business-16362662
Hungary passes controversial central bank law S&P raised doubts about the independence of the Hungarian central bank Continue reading the main story
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Hungary has passed a law that critics say could undermine the independence of its central bank.
The ruling Fidesz party, which has a two-thirds majority, has approved the constitutional change in the final session of parliament this year.
Ratings agency Standard & Poor's downgraded Hungary's debt to junk status last week, partly due to the proposed changes to the constitution.
EU and IMF officials have cut short aid talks with Hungary over to the law.
Nujabes - the sign (ft. pase rock)
http://tiny.cc/9gyvx
dupe my bad
Alright, who minused Nujabes, your ZH club membership should be revoked ... I posted this song because I feel like it is an anthem for our time (yes, the video is super lame though)
Why are you worried about the FED holding T's? If rates increase and the values decrease, so what? It's not like they purchased them with real money, they used digital magic money. They'll hold them until they mature and trade them for new ones, which they will fund with more newly created magic money. They've been at it for a while.
http://www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf
in the 6 days leading up to Christmas , the BATF did 500,000 background checks.................ha ha ha ha
what time is it?
Well if they are telling us that gold and silver are trash.....gues what the second best thing to have is......guns and ammo it looks like to me...
Youngman
100% agreed! +1
Guns and ammo the other white meat !
High Plains Drifter asked:
Half past pissed off, a quarter to tar and feathers.
10-yr. yield just crashed to 1.88%, wow, everyone is still clamoring for paper.
Shlemiel
Proving that there's always a bull market for foolishness:
Like a dog returns to its vomit, a fool returns to his folly.
Govvies out perform stks...agsin thanks BEN
US TREASURIES - Yeeeeeeahhhhhhhh Baby:
http://www.youtube.com/watch?v=95hskT3DS7w
This is international musical chairs, with the twist that the players get to have new chairs when they need one. This gives the false sense of security as well as the reality of a rigged game. It all happens in a financial world that has nothing to do with who makes the chairs or how they get made. It is a separate reality that would have Lewis Carroll babbling, which is what many of the posts here reflect. It is not a Ponzi scheme as it does not require new countries to join, or new banks, or new anything - it is a shell game - where we all try to guess where the money is - the real money - and now, even, what would it look like - metals? - if the shells were all turned over. But that won't happen because in the New World Order so many games are going on - shell games, musical chairs and feats of magic - all of these swindles are just one big swindle: you make the chairs, we will sit in them, and sell them back to you at a much higher price before we've paid you in the first place. You understand? This works. Until that day when no one sees the point in making any more chairs. And that's the beauty of the scheme - that day never comes - you just have to run a little faster said the White Rabbit, to stay in place.
ah, nothing in the world like taking a healthy dump
It would seem that the TPTB are in the process of provoking Akmad into firing the first shots, will their constant needling be sufficient make it so? They always seem to get what they want with the right amount of manipulation, in the meantime we stack and wait.
http://www.youtube.com/watch?v=angi1vwUkQc
i remember , early in the iraq war, a group national guardsmen refused to go on a convoy run. they said it was too dangerous. well duh? the army quickly nipped that problem in the bud and i never heard anything more about it. what if the sailors said. we refuse to do this. what then?
But the economy is on the mend, guys!
http://www.reuters.com/article/2011/12/30/us-economy-idUSTRE7BE12S20111230?feedType=RSS&feedName=businessNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=56943
What a crock of shit. I sometimes think these economists, MSM agencies, live in a different world.
A job dont mean shit if it only barely pays bills/food. Credit given to you don't mean shit if you can pay back the interest/balance.
Everything needs to continue to grow, including wages on scale with the growth of the money supply, in order to "prosper" in a consumerist society. Everyone knows QE is BAD (hence why they rename it) because the monetary supply for the everyday man does not keep up with the super rich. This is when inflation happens.
All of the people I know in my age bracket (18-30), including me, are only focused on one thing: paying down our debt. Why? So when we get laid off again, we won't NEED those UI benefits or bullshit corporate jobs.......or more like, we know we won't get them.
People are starting to realize they need to de-foo from the system.
I said it before and I will say it again. The wrong trade is the right trade in this rigged market. Gold will continue to tank and the market will rip. Take any logic, facts, and common sense out. Then you will make money.
I call it the retard trade. It's the new trend. Trade the retard trend and P&L will be green.
Based on retard analytics:
1) Market breaks out and makes new highs next year.
2) Gold plunges
3) Obummer gets re-elected
4) Jobs come back
5) Shorts get squeezed to death
6) I get to start a guru site on the retard trading methodology..... Oh, and the easter bunny and Santa are real.
Yup, the "broken clock" portfolio. Correct once or twice, depending on whether you're on 12 hour or 24 hour time. I call this the "humans are insane" portfolio, which is pretty close to the same meaning.
I suspect the smart portfolio for 2012 is the "real portfolio", where "real" means only real, physical assets hidden where nobody else can find them or steal them. As the MFG fiasco proves, the predators-that-be and predator-class are in full-bore feeding frenzy mode, and will openly steal anything you leave in their care. Thus the only smart portfolio is your favorite stash of real, physical gold, silver, platinum, seeds, equipment/supplies/tools to convert seeds into food, guns, ammo, water source and purification system, other productive equipment that you operate, etc.
Right now is an incredibly sweet spot for physical platinum. Not only is it cheaper than gold (!!! holy smokes !!!), but is immune from confiscation by government (in practice), looks like silver at a glance (and thus cheap and not worth getting bent outta shape about at checkpoints), and is far rarer on earth than gold. Buy platinum now and smile all the way through 2012.
Not a big exodous ... yet.
Here is my bond, mortgage and housing market 2011 review.
2011: A Year In Review For Bonds And Mortgages – Treasuries Big Winner, Europe Big Loser, U.S. Housing Flat-linedhttp://confoundedinterest.wordpress.com/2011/12/30/2011-a-year-in-review...
How anyone can even consider gold being in a bubble in this "environment" is just amazing. Printing of of money and its substitutes at an accelerated pace far far above any real growth. Assets marked to unicorn and leverage +30 times.
Yup, I´m sure gold is/was in a bubble hehe. Papergold is most def in a bubble though, its days are numbered.