Foreigners Sell Record $85 Billion In Treasurys In 6 Consecutive Weeks - Time To Get Concerned?

Tyler Durden's picture




 

Last week, when we pointed out what was then a record $77 billion in Treasury sales from the Fed's custody account, in addition to noting the patently obvious, namely that contrary to what one hears in the media, foreigners are offloading US paper hand over first, there was this little tidbit: "The question is what they are converting the USD into, and how much longer will the go on for: the last thing the US can afford is a wholesale dumping of its Treasurys. Because as the chart below vividly demonstrates, the traditional diagonal rise in foreign holdings of US paper has not only pleateaued, but it is in fact declining: a first in the history of the post-globalization world." Well as of today's H.4.1 update, the outflow has increased by yet another $8 billion to a new all time record of $85 billion, in 6 consecutive weeks, which is also tied for the longest consecutive period of outflows from the Fed's Custody account ever. This week's sale brings the total notional of Treasurys in the Custody account to just $2.66 trillion (down from a record $2.75 trillion) and the same as April of last year. And since the sellers are countries who have traditionally constantly recycled their trade surplus into US paper, this is quite a distrubing development. So while the elephant in the room could have been ignored 4, 3 and 2 weeks ago, it is getting increasingly more difficult to do so at this point, especially with US bond auctions mysteriously pricing at record low yields month after month. But at least the mass dump in Treasurys explains the $100 swing higher in gold in the past month.

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Thu, 01/12/2012 - 21:38 | 2060330 Snakeeyes
Thu, 01/12/2012 - 22:03 | 2060350 King_of_simpletons
King_of_simpletons's picture

Not a time to be concerned. It is that time of great hope and bullishness. Just keep the positive message spreading thro' the airwaves.  May be the universe will respond by the power of affirmation. In the meantime, on earth, let's dig a deeper grave.

Thu, 01/12/2012 - 22:03 | 2060374 The Monkey
The Monkey's picture

Treasuries. Very bullish sentiment in the stock markets nearing extremes. Electoral cycle will require plans for fiscal consolidation, either via cuts, taxes or both. Bill Gross bitches about 30 year auction.

Sounds like we're nearing the end of a consolidation pattern and getting ready for another bull leg in treasuries.

Thu, 01/12/2012 - 22:25 | 2060427 Clockwork Orange
Clockwork Orange's picture

Whenever the US Treasury needs to raise $$, or anything occurs similar to what the above article indicates, WHOOOSH !!!!, problems elsewhere and VOILA!!! assets into UST.

Pad the airwaves with bullish spirits, then smack the bejesus out of stocks (see last August after Banana Ben indicated he would stop counterfeiting for ... wait for it ... yup, 2 months) and HEY!!!! waddayakno? a whole lot of UST customers!!!!

Simple formula, just need a few sociopathic deuchebags to repeat the pattern.

If you are skeptical, just watch for a few weeks.  Rally into middle of next week should let the big money take off their option plays, then WHAMMO, exactly per the above.

Watch for now.  Then, sign up to help operate the gallows.

Thu, 01/12/2012 - 22:57 | 2060505 cocoablini
cocoablini's picture

There is a liquidity squeeze, so they are dumping liquid but supported treasuries for cash- as in senior currency dollars. Europe is shuffling trash dollars around trying to stay afloat with the Bernanke window open. We have seen this before where the Fed opens up the window to euro banks to take care of their carry trade nonsense. Ben sells dollars high and then prints and buys them back cheap- idiots who levered up have no choice in a meltdown. Then when everyone goes into dollar-straight- to zero mania, Ben collects them or prints more and more. Then , mathematics take over as inevitable deflationary deleveraging and insolvency create a run for the dollar and drive prices back up. Fed has stronger dollars in the cycle, sells, loans strong US dollar to levered idiots. Rinse repeat as dollar crashes and flashes . Fed is playing self-induced volatility, thanks to their sociopathic upbringing.

Thu, 01/12/2012 - 23:48 | 2060586 The Monkey
The Monkey's picture

Ben hasn't been buying them back cheap recently. The duration swap has had the Fed buying 30 years @ 280 bps. If they monetize buying shorter term US agencies (mortgages) without supporting the long-end, Bernanke might as well tie himself a noose.

Thank God for the electoral cycle. We still have that.

Fri, 01/13/2012 - 00:02 | 2060608 JTBfromtheWL
JTBfromtheWL's picture

Am bullish pm! Am diversified in various forms of coinage. The msms going to be reporting on the bright side of this collapse-the amazing investment fortunes to be had with gold and silver. The sheeple everywhere will have a newfound proudness for their wedding jewelry, flaunting it in a show of wealth! When I'm offered a touch in exchange for a guinea pig I'll turn the tables!

Fri, 01/13/2012 - 01:10 | 2060719 Braverdave
Braverdave's picture

Better yet is a breeding pair of guinea pigs.

... and I like shiny stuff too.

Fri, 01/13/2012 - 01:58 | 2060786 JTBfromtheWL
JTBfromtheWL's picture

Lots of people eat guinea pigs in SA. The females can breed within a couple months of age, have littlers of 4-5 and do that about 5 times a year usually. And they can live off grass! Similar to rabbits! Bacon anyone? Seriously though, I'd eat em' rather than starve.

Fri, 01/13/2012 - 02:09 | 2060796 Braverdave
Braverdave's picture

Yah! My grandmother spent some time in SA in her younger years and ate a guinea pig or two. My grandfather has told me stories about eating squirells, rabbits and such in ww2 years in europe.

Quail are abundant where I live. My dogs are quick enough to catch them sometimes too.

Sun, 01/15/2012 - 14:00 | 2066489 Sassy4205
Sassy4205's picture

Doh, not guinea pigs...they are friends around our home.  ;-)  However, I guess if you're really hungry, even your neighbor will look delectable.  Bugs, worms and those kinds of critters look even less delicious.  We've gone the chicken route...they are natural foragers and fairly quick reproducers and give us wholesome protein daily in the form of eggs.  Rabbits are next on our agenda...meatier than guinea pigs and can be mated many times each year, though very low in fat content, which is necessary.  Their offspring can be eaten in 8 weeks.  My grandfather was a hunter and used to feed us all kinds of cuisine and tell us it was chicken (even those itty bitty drumsticks grampa?).  I wouldn't suggest relying on hunting when all this comes down because that will be on everyone's mind and the animal population will be depleted quickly.  Animal husbandry of whatever floats your boat, gardening and especially foraging will be the best options.  Did you know you can boil cattails and eat them like a corn dog?  LOL!  Survival will be in becoming very knowledgable, in advance, about your surroundings...what you can eat and what you can't.  Good luck to us all!

Fri, 01/13/2012 - 02:36 | 2060820 Teamtc321
Teamtc321's picture

"And they can live off grass!"

Ding ding. We have a winner. Do what JR Simplot did when he started his Ag empire, slaughtered wild horses and fed to his hog's for free food. Meat work's also, who would have thought. 

Fri, 01/13/2012 - 05:27 | 2060897 EasterBunny
EasterBunny's picture

I resemble that remark

Thu, 01/12/2012 - 21:57 | 2060362 Silver Bug
Silver Bug's picture

The time to get concerned was years ago, but it is better late than never.

 

http://silverliberationarmy.blogspot.com/

Thu, 01/12/2012 - 22:05 | 2060376 The Monkey
The Monkey's picture

I'm looking to buy silver, but it's still a ways from my "buy" price target: $3.00 / oz.

Thu, 01/12/2012 - 23:28 | 2060555 Harlequin001
Harlequin001's picture

I've got some silver you can buy for $3.00, very good quality, much cheapness...

Of course, it's a bit heavy...

Fri, 01/13/2012 - 00:33 | 2060664 lincolnsteffens
lincolnsteffens's picture

Funniest thing I've heard for days!! sad thing is I vividly remember $3/0z.  Bought a car thanks to the Hunt Bros.

Sold just as the market was getting massively over supplied. I didn't know diddly then except what a good profit looks like.

Thu, 01/12/2012 - 22:13 | 2060392 Freddie
Freddie's picture

Hope & Change.

(post flagged by DHS)

 

Thu, 01/12/2012 - 22:24 | 2060422 Randall Cabot
Randall Cabot's picture

They're very good at ignoring elephants, very, very good.

Fri, 01/13/2012 - 00:10 | 2060624 Calmyourself
Calmyourself's picture

hope & changey with a trunk eating peanuts...

Thu, 01/12/2012 - 21:47 | 2060345 rosiescenario
rosiescenario's picture

When are they going to permit the Palestinians to open casinos?

Thu, 01/12/2012 - 21:59 | 2060368 lolmao500
lolmao500's picture

I don't get it.

Thu, 01/12/2012 - 22:19 | 2060411 HarryM
HarryM's picture

Native Americans IN USA run Casinos

Thu, 01/12/2012 - 22:20 | 2060413 lolmao500
lolmao500's picture

I get it now... I failed with that one.

Thu, 01/12/2012 - 22:21 | 2060419 Jendrzejczyk
Jendrzejczyk's picture

When they have killed enough of them to start feeling guilty about it.

Fri, 01/13/2012 - 00:53 | 2060694 xela2200
xela2200's picture

They have been killing them for 2000 years now. When do you think that they will start to feel guilty?

Fri, 01/13/2012 - 01:28 | 2060746 RockyRacoon
RockyRacoon's picture

When they start taking scalps.

Fri, 01/13/2012 - 00:30 | 2060655 GMadScientist
GMadScientist's picture

When the Nakba has moved them all to Vegas ("what?! who could tell the difference?" - Mortie).

Thu, 01/12/2012 - 22:00 | 2060369 pakled
pakled's picture

Romney, Gingrich and Santorum : we will make porn illegal

 

Allright. That's the last straw. And to think I was going to vote for them.... 

 

/s

Fri, 01/13/2012 - 00:54 | 2060695 xela2200
xela2200's picture

Define porn. The only reason I have internet is because of it.

Fri, 01/13/2012 - 00:30 | 2060647 Calmyourself
Calmyourself's picture

I picked the one I care about and checked it out and thinking is not your strong suit is it?  Not one of them said they would outlaw porn moron, they said they would enforce existing law your own links call you a liar, MAJOR FAIL.... GO AWAY..

Fri, 01/13/2012 - 01:38 | 2060756 lolmao500
lolmao500's picture

Federal obscenity laws should be vigorously enforced. If elected President, I will appoint an Attorney General who will do so.”

Patrick Trueman, MIM’s President and a former Department of Justice official in the Reagan and Bush I administrations, said that “our nation is suffering a pandemic of harm from pornography that is readily available,” and that “pornography is a common cause of the destruction of marriage. It leads to misogyny and violence against women and is a contributing factor in sexual trafficking.”

Aka porn is bad and we must restrict it! You betcha those fucking control freaks are gonna use SOPA and that kind of stuff to shutdown porn websites.

Fri, 01/13/2012 - 06:35 | 2060918 DeltaDawn
DeltaDawn's picture

Shoot your own staring you and any woman you can get in real life. Problem solved

Thu, 01/12/2012 - 21:40 | 2060334 uno
uno's picture

fortunately the Caribbean island Ponzi will buy everything

Thu, 01/12/2012 - 21:58 | 2060335 ninja247
ninja247's picture

QE3/inflation is coming, invest accoridngly .

Thu, 01/12/2012 - 22:16 | 2060396 The Monkey
The Monkey's picture

QE3, 4, 5, etc are coming, but no politically viable open market purchase plan will sustain or accelerate anything more than transitory inflation.

Looking forard to the Fed hitting the gas again. One more step toward demise of the institution.

Fri, 01/13/2012 - 00:55 | 2060701 xela2200
xela2200's picture

Target Nominal Gross Domestic Product. How is that for a mouth full?

Thu, 01/12/2012 - 21:40 | 2060336 swani
swani's picture

I have been worried for a very long time. 

Fri, 01/13/2012 - 00:00 | 2060605 Westcoastliberal
Westcoastliberal's picture

Me too Swani.  We are sooooo screwed.

Thu, 01/12/2012 - 21:42 | 2060338 goldencrumbs
goldencrumbs's picture

Don't worry, these guys see things WAY before it's time to get concerned.

The transcripts of the Fed’s Open Market Committee meetings in 2006, released after a standard five-year delay, suggest that some of the nation’s pre-eminent economic policy makers did not fully understand the basic mechanics of the economy that they were charged with supervising. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in models that turned out to be broken

http://www.nytimes.com/2012/01/13/business/transcripts-show-an-unfazed-fed-in-2006.html?hp

 

Thu, 01/12/2012 - 21:50 | 2060349 Yes_Questions
Yes_Questions's picture

 

 

Ripley: How many drops for you is this, lieutenant?
Gorman: Thirty-eight. Simulated.
Vasquez: How many combat drops?
Gorman: Uh, two. Including this one.
Hudson: Oh-ho, man...
Thu, 01/12/2012 - 22:18 | 2060404 Freddie
Freddie's picture

Hudson: Game over man!

Thu, 01/12/2012 - 22:21 | 2060418 lolmao500
lolmao500's picture

Nuke it from orbit, it's the only way to be sure.

Fri, 01/13/2012 - 00:05 | 2060616 jonjon831983
jonjon831983's picture

Hey, maybe you haven't been keeping up with current events, but we just got our asses kicked pal!!!

Fri, 01/13/2012 - 00:26 | 2060646 Freddie
Freddie's picture

LOL!  So many good lines in that film even though James Cameron is a doche.   Paul Reiser's slimy character reminds me of the squid - Lloyd Blankfein and Goldman Scum.

I still prefer Ridley's original.

Fri, 01/13/2012 - 01:22 | 2060736 Braverdave
Braverdave's picture

They mostly come at night. Mostly.

Fri, 01/13/2012 - 02:19 | 2060810 Tyranny is Love
Tyranny is Love's picture

There's no such thing as monsters...

Fri, 01/13/2012 - 02:58 | 2060835 geekgrrl
geekgrrl's picture

"You know Burke, I don't know which species is worse. You don't see them fucking each other over for a goddamn percentage."

Fri, 01/13/2012 - 03:48 | 2060861 Oliver Jones
Oliver Jones's picture

That line is nothing short of prophetic.

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