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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.

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.... 



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


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.

Thu, 01/12/2012 - 22:18 | 2060402 King_of_simpletons
King_of_simpletons's picture

CEOs urge court to throw out SEC-Citigroup ruling


Thu, 01/12/2012 - 21:46 | 2060344 lolmao500
lolmao500's picture

The FED will just devalue the dollar again and again to pay the debt. No problem.

Thu, 01/12/2012 - 22:01 | 2060372 surf0766
surf0766's picture

They can't without crushing what little we have left of an economy. Specifically gas at $4.00. It is $3.45 now here. Stores are still closing.

Thu, 01/12/2012 - 22:10 | 2060385 lolmao500
lolmao500's picture

You seem to imply they care about the economy?

Fri, 01/13/2012 - 02:39 | 2060822 RafterManFMJ
RafterManFMJ's picture



They can devalue till their asshole sucks buttermilk, as my granddad used to say. Got Gold, Silver, Lead, and (food in) tin(s)? F 'em all, short and tall.

Thu, 01/12/2012 - 21:49 | 2060348 yogibear
yogibear's picture

Those overseas know Ben Bernanke and the Federal Reserve Banksters will monetize debt like madmen. It's the obvious next move. Just print like crazy. Bernanke's PhD wet dream of fullfilling his college thesis will be the attempted. Bernanke will continue buying US treasuries in earnest while the debt ceiling keeps rising along with spending until nobody wants the US dollar.

Thu, 01/12/2012 - 22:17 | 2060399 Things that go bump
Things that go bump's picture

Who wants it now?

Thu, 01/12/2012 - 22:41 | 2060474 israhole
israhole's picture

Chaim Witz is racist against all Goyim.  Get a new avatar, everybody's doing it.

Fri, 01/13/2012 - 01:46 | 2060748 Things that go bump
Things that go bump's picture

Sorry, but I like it and I think I will keep it all the same.

Thu, 01/12/2012 - 22:20 | 2060412 The Monkey
The Monkey's picture

Sometimes I think ZeroHedge was created just to help destroy the Federal Reserve bank. Thank you ZH!!!

Looking forward to the return of Free markets and capitalism. Thanks for the great work.

Thu, 01/12/2012 - 21:51 | 2060351 SHEEPFUKKER

The U.S. Treasury bond is not really a treasure now is it?

Thu, 01/12/2012 - 21:51 | 2060353 rosiescenario
rosiescenario's picture

Just trying to figure out here what % is $85 billion of the total $2.66 trillion........does 3% sound about right or did I misplace a few billion?????? I don't know, 3% sounds like noise to me.....maybe if it gets bigger we should then worry?

Thu, 01/12/2012 - 22:17 | 2060398 Tyler Durden
Tyler Durden's picture

Price setting is always at the margin. 99% of the actual "stock" does whatever the entity that determines the "flow" at any given moment does. Kinda like what happens when a momentum stock hits an all time high then a few seconds later trades at 52 week lows.

Thu, 01/12/2012 - 23:21 | 2060545 The Monkey
The Monkey's picture

True for equities and commodites, not so much for treasuries. Treasuries move based on sentiment, but generally not much day-to-day. Long treasuries have continued to appreciate since 1982. Personally, I think we have another 100 bps to go.

Fri, 01/13/2012 - 00:40 | 2060677 Central Bankster
Central Bankster's picture



Can you explain that again.  Im not sure I've seen a momentum stock trade at a 52 week high and then seconds later trade at a 52 week low?

Thu, 01/12/2012 - 21:54 | 2060355 SillySalesmanQu...
SillySalesmanQuestion's picture

Oh my...what will the SEC regulators and most of Wall St. do to pass the time if they outlaw porn...?

Fri, 01/13/2012 - 00:10 | 2060623 Teamtc321
Teamtc321's picture

Have you not heard? Moving it to there own private boy's sopa cloud. 

Fri, 01/13/2012 - 00:12 | 2060627 Ben Dover
Ben Dover's picture

What makes you think it will be outlawed for them?

Thu, 01/12/2012 - 21:57 | 2060361 myTPisUSD
myTPisUSD's picture

Well, this is what happens when the bag of shit (aka popped bubbles) gets moved onto the balance sheet of "last resort". Epic treasury bubble bursting at the seems. Bennie and the inkjets are getting ready to fire up QE3.




Got physical?

Thu, 01/12/2012 - 21:57 | 2060363 Bumblebee Tuna
Bumblebee Tuna's picture

Nothing a swift downturn in the markets can't fix.  Metals would likely follow suit:

Scare everybody back into the USD and treasuries, meanwhile, with the markets down, it justifies the QE3 everybody's gagging for.



Thu, 01/12/2012 - 21:57 | 2060364 pakled
pakled's picture

But at least the mass dump in Treasurys explains the $100 swing higher in gold in the past month.


Really? There's actually an explanation for such moves?

Thu, 01/12/2012 - 22:01 | 2060371 4D
4D's picture

From Prof Michael Pettis, Peking University:

"One of the more absurd fears that still pops up every few months is the panic over the possibility that foreign central banks (i.e. the Chinese) might stop “lending” to the US government.? If they ever decide to stop buying US Treasury bonds, the argument goes, US interest rates would soar and the US government would suddenly find itself unable to fund its fiscal deficit.

  "I apologize for repeating an argument I have made many times before in this newsletter, but aside from the fact that Chinese “lending” to the US government is not a discretionary decision that they can choose or not choose to do – it is the automatic consequence of a growth model that requires a trade surplus to absorb domestic overcapacity – the idea that the US government needs foreign funding is based on a very fundamental misunderstanding of the balance of payments.? The US government does not need foreign buyers for its bonds.? On the contrary, it is in Washington’s best interest that foreign central banks sharply reduce their purchases of USG bonds."   "US interest rates have very little to do with foreign purchases of US government bonds.
  Why? Because foreigners do not fund fiscal deficits. They fund current account deficits, and as an accounting requirement the size of the current account deficit is exactly equal to the net foreign funding.? Capital account inflows must exactly match current account outflows.   The direction of causality can go either way.? If investment in the US is so high, for example, that it is impossible for US savings to supply the full demand (as occurred during much of the 19th Century), then the US must import foreign capital to make up the shortfall.? The difference between domestic US investment and domestic US savings, of course, is equal to the net amount of foreign savings imported into the US, and is also equal to the US current account deficit.? In this case soaring US investment causes the US to have a current account deficit and leads foreigners to fund this excess investment."   "
But whether for good reasons or bad reasons there is no escaping the fact that net capital imports into the US, whether pulled by domestic needs or pushed by foreign needs, must be accompanied by a rising US current account deficit – this is just arithmetic.? So what happens if foreign central banks and other foreign investors pull back their purchases of US government bonds – won’t interest rates rise and the economy collapse?   No, on the contrary, the economy will actually grow faster and, to the extent that interest rates are high because of default worries (as they are in Spain), interest rates might even decline.? Why? Because if there is a reduction in net foreign capital inflows there must also be a reduction in the US current account deficit.? This can happen in good ways or in bad ways.? In Spain, for example, it will happen as a collapse in domestic demand and high levels of unemployment.   What is more plausible, in the case of the US, is that reduced capital inflows reduce the value of the dollar, causing exports to rise and imports to drop.? If this happens in an orderly way, US unemployment will drop and US business profits will rise.   What will happen to US Treasury rates?? They are likely to remain unaffected for two reasons.? First, the decline in US unemployment will result in a decline in fiscal expenditures since the main reason for fiscal expansion is to reduce unemployment.? Second the reduction in unemployment and the increase in business profits will increase tax revenues.? Lower spending and higher revenues means less borrowing, and so fewer foreign purchases of US government bonds will be matched by fewer US government sales of bonds.   Remember that saying that the US needs more foreigners to buy US government bonds in order to keep interest rates low is exactly the same as saying the US needs a bigger current account deficit in order to keep interest rates low.? This cannot be true.   Are foreigners (i.e. China) likely to buy fewer US government bonds in the next year or so? It depends on whether or not China continues to run a large current account surplus, and this is hard to predict since it is based more on political factors than economic ones.? China’s current account surplus has contracted quite dramatically in the past four years, not because of domestic rebalancing, of course, but because of forced foreign rebalancing, and there are many who think the trade balance may actually go into deficit next year."

Thu, 01/12/2012 - 22:17 | 2060400 Global Hunter
Global Hunter's picture

Interesting post, I don't see US unemployment going down any time soon though.

Thu, 01/12/2012 - 22:18 | 2060407 trebuchet
trebuchet's picture

The Prof's analysis to be correct depends on a host of elasticities and confidence 

Fri, 01/13/2012 - 01:40 | 2060763 RockyRacoon
RockyRacoon's picture

Those pesky things that keep the field of economics from being a science... and, thereby, useful.

Thu, 01/12/2012 - 22:35 | 2060444 Sizzurp
Sizzurp's picture

That makes no sense to me ...... probably the biggest pile of rubbish I have ever read.  Now I know why we are so screwed, it's morons like this guy making decisions.  There are a number of false assumptions in that piece, probably the biggest is the idea that corporate profits rise with a falling dollar.  What happens when input commodity and labor costs go up as a result of dollar decline, doesn't that hurt profits?

Thu, 01/12/2012 - 23:00 | 2060512 Geruda
Geruda's picture

In your speaking you are saying you can not be making sense of what the peoples who wrote it is saying. The thinking I am having is that you are being stupids by saying it is rubbish because if you are not having understanding of what he is speaking you are not having as many understandings that peoples need to be having to be able to be making judgements.   If the judgements you are having are good judgements about the speaking or if the judgements you are having about the speaking are bad judgements, the judgements you are having are meaning nothing because you are having no understanding to be making judgements if it is true what you are saying that the speaking you are judging is making no sense to you.   If you are hearing a man who is talking about physics and you are not understanding the physics he is talking you are being a stupids if you are saying because you can't understand the physics he is saying the physics he is saying is rubbish.  

Thu, 01/12/2012 - 23:07 | 2060524 infinity8
infinity8's picture


Thu, 01/12/2012 - 23:08 | 2060525 Sizzurp
Sizzurp's picture

I think you need to slap your english teacher.  I understand what the prof. is trying to say, however his assumptions are wrong and therefore his entire argument is flawed.

Thu, 01/12/2012 - 23:22 | 2060550 Bubbles_2.0
Bubbles_2.0's picture

As chinas growth slows, and the building bubble burst, the imput commodities as you speak of will be sold off like cheap toys at flea mart.

The consumption rate by the locals as part of gdp has droped 25% over the last ten years. The country has 14 trillion in local govt bad debt and the manufactures not ready for austerity.

Your teacher is a moron

Thu, 01/12/2012 - 23:44 | 2060580 Geruda
Geruda's picture

When you are saying judgements after you are saying you are not understanding what peoples are talking then you are talking stupids.   I am not understanding what he is saying but I am not understanding what you are saying.  If the judgements you are having are having no proofs why you are having them then you should not be wasting peoples times telling us how you are feeling.   I am not caring what the feelings you are having are inside of you.   You should be talking about what peoples should be hearing to know if they should be having feelings like you are having.   If you know he is making assumptions that he should not be making assumptions about then you should be telling peoples what those assumptions are and you should not be trying to make us know the feelings you are having instead.   I am not caring if you are not liking the foods people are asking you to eat unless you are telling me informations about the food that I was not knowing so maybe I won't like it too.  Americans talk so stupids because they are thinking generalities is like talking about something when it is really meaning nothing.  It is like stupids who are politicians who are saying they know how to make more jobs but they are never talking about what the knowing they think peoples will believe they are having is.      

Fri, 01/13/2012 - 00:32 | 2060661 Teamtc321
Teamtc321's picture


When you are saying stupids I am understanding the judgements and I have the prooofs. But you should be having talkings to assumptions to be knowing american englishes. So if something you think will peoples believe is saying in englishes with assumptions you maybe knowing. So the caring feelings you peoples making in amaerikan englishes migh be judgemented proofs.  

And as I was reading your englishes assumption's from caring feeling's, I spoowed pepsi from my nose to keyboard, again. 

Fri, 01/13/2012 - 00:47 | 2060688 Sizzurp
Sizzurp's picture

I was beginning to think my judgements were to jugementalis in making assumptions judgment thingys followed by more awfulness and proffs that it was because of various judgments.  There now I have escaped the ZH twilight zone and hopefully avoided an international incident.

Fri, 01/13/2012 - 00:55 | 2060698 infinity8
infinity8's picture

Jeezuz key-riste I thought I was heavy into the sauce tonight - you guys are killing me!

Fri, 01/13/2012 - 08:28 | 2060974 hardcleareye
hardcleareye's picture


Fri, 01/13/2012 - 08:27 | 2060975 hardcleareye
hardcleareye's picture


Fri, 01/13/2012 - 01:03 | 2060712 DeadFred
DeadFred's picture

Gladly was I that Pepsi was not from my nose spewing also. Riotously.

Fri, 01/13/2012 - 20:05 | 2063650 mqg25
mqg25's picture

You should never write when your stoned. ...but I got what your saying mon.

Fri, 01/13/2012 - 01:42 | 2060769 CapitalistRock
CapitalistRock's picture

When the dollar falls all things rise in nominal terms, including corporate profits. In real terms that is not likely the case. That's what Zimbabwe was all about. Profits, when counted in the local currency, went through the roof. But standards of living went down.

This is why you better own real assets, like gold, silver, or real estate. Even stocks. A lower dollar will price all that higher in dollar terms, but not necessarily in real terms.

Fri, 01/13/2012 - 09:53 | 2061121 Red Raspberry
Red Raspberry's picture

What happens when input commodity and labor costs go up as a result of dollar decline, doesn't that hurt profits?


They cut their staff and the stock goes up.

Fri, 01/13/2012 - 13:09 | 2062070 matrix2012
matrix2012's picture


"What happens when input commodity and labor costs go up as a result of dollar decline, doesn't that hurt profits?"

"They cut their staff and the stock goes up."


Then what the redundant staffs will do to make a living? 

If there are no jobs, then unemployment will be up... 

and they will have to rely on on e-coupons to meet their basic ends.

If so, how can the economy be getting improved??? LoL


Gotcha! just keep all the dirts under the rugs!


Thu, 01/12/2012 - 22:02 | 2060373 SAME AS IT EVER WAS

Tyler, what about the record sale of U.S. paper mentioned here on ZH a few days ago; and,  how can you explain the massive consumer activity(sporting events, concerts, long waits at resturants on a weekday, insane traffic, packed malls...) if the economy is so bad?


Thu, 01/12/2012 - 22:11 | 2060387 lolmao500
lolmao500's picture


Thu, 01/12/2012 - 22:37 | 2060461 The Monkey
The Monkey's picture


Thu, 01/12/2012 - 22:14 | 2060393 fonzannoon
fonzannoon's picture

I think the whole point is if you think what your eyes see is sustainable then you should probably just ignore everything about this site.

Thu, 01/12/2012 - 22:31 | 2060443 SAME AS IT EVER WAS

What is not sustainable, the petro?

Thu, 01/12/2012 - 23:43 | 2060574 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Have you studied how the USTs are auctioned to Private Dealers who then flip the said USTs to the Fed T+1?

Thu, 01/12/2012 - 22:18 | 2060406 surf0766
surf0766's picture

No packed malls here. No insane traffic. Traffic has never even gotten close to what it was in 2007. Habitat for Humanity is a new "store " in the local mall. Long waits in resturants... Define long. 5 minutes? New food pantry just opened up to help feed needy families.

Thu, 01/12/2012 - 22:25 | 2060429 The Monkey
The Monkey's picture

Pretty much what things looked like toward the end of 3rd quarter 2008. It's all good. No worries.

Thu, 01/12/2012 - 22:45 | 2060483 Dr. Engali
Dr. Engali's picture

I don't know where you live, but I can tell you it's nothing like that where I live. I haven't seen a packed mall or crazy traffic in a couple years. As a matter of fact I was out with a group of friends last night, and the main topic of discussion was how oddly quiet it's become.

Fri, 01/13/2012 - 02:28 | 2060812 Tyranny is Love
Tyranny is Love's picture

When it gets quiet its time to leave.

Thu, 01/12/2012 - 22:50 | 2060497 luna_man
luna_man's picture


"SAME AS IT EVER WAS"...It's probably the 1%'s!

But more likely, don't worry, be happy crowd!



Fri, 01/13/2012 - 01:10 | 2060721 DeadFred
DeadFred's picture

"how can you explain the massive consumer activity(sporting events, concerts, long waits at resturants on a weekday, insane traffic, packed malls...) if the economy is so bad?"

I think Krugman's aliens may have arrived. This guy is seeing a different planet than I see"

Fri, 01/13/2012 - 01:29 | 2060750 Central Bankster
Central Bankster's picture

Depends what part of the country you're in?  You live in DC?  The politicians sure haven't gotten leaner during hard times.

Thu, 01/12/2012 - 22:06 | 2060378 fonzannoon
fonzannoon's picture

The ten year is 1.9% The dow is on auto pilot. Gold is too unstable to be considered a rational investment. Things are going to plan. Go get yourselves an SUV and start looking into your summer rental in the hamptons. You worked earned it.

Thu, 01/12/2012 - 22:24 | 2060424 SAME AS IT EVER WAS

I've been a ZH fan for almost 2 years, and sign in mulitple times a day.

I'm sure as hell not trolling, but I just can't understand all of the economic activity all around me if the economy is so bad.

Can someone plase explain what i'm not seeing.

Thu, 01/12/2012 - 22:29 | 2060435 The Monkey
The Monkey's picture

We'll if you like math and physics, you might consider derivitives (rate-of-change) and black holes. Things looked great in April 1930 too.

Thu, 01/12/2012 - 23:08 | 2060526 cocoablini
cocoablini's picture

Where do you live. Do you have a job? What you see is reality. In the 30s unemployment was 25% or more( real.) but that leaves 75% with jobs- who have money and maybe didn't get over levered. 50 mill on food stamps is also a way to print dollars off the books and push it into a depressionary deflation. So, breadlines are not as visible. The numbers are the same, but this country is hiding it with social programs and media manipulation. Plus 1929 was the first of numerous drops in the markets- but again the Pomo manipulation is running a hologram of a strong stock market with no volume

Thu, 01/12/2012 - 23:18 | 2060538 infinity8
infinity8's picture

Great post. I would add that expectations of standard of living and ownership of anything of value have been lowered gradually, but steadily, over the last 30 yrs or so. With MSM bullshit marketing no small factor in the equation.

Thu, 01/12/2012 - 23:31 | 2060558 The Monkey
The Monkey's picture

Good explanation. Problem: if you don't capitulate, people still believe times are "as they were", few lessons are learned, etc.

Politics is the big variable that inevitably throws a monkey wrench into central planning.

"We need to cut deficits."
"Umm. No we can't do that now."
"Why not?"

Truth eventually wins, like a kid vs Santa Clause.

Thu, 01/12/2012 - 23:55 | 2060596 Westcoastliberal
Westcoastliberal's picture

Normalcy bias. People try until the very end to keep things as they were.  The underlying rot creeps onto the scene as they run out of resources.  Almost every family has at least one member who is out of work.

Fri, 01/13/2012 - 00:50 | 2060682 slewie the pi-rat
slewie the pi-rat's picture

Can someone plase explain what i'm not seeing.

most likely, you're not seeing beyond your immediate enclave, which may be booming

for example, the "beltway" around DC is reportedly doing just swell!  certain areas around large educational facilities may be doin better than elsewhere;  "parts" of larger areas may be more vital than more depressed areas nearby

a friend in SF says restaurants are booming;  people with decent jobs and regular paychecks still exist;  if they don't owe more than they make, they may be having a heluva lotta fun!

in general, there are more people reported struggling;  the poor seem to be getting poorer;  doesn't mean they are naked and starving, perhaps, but maybe just that they have somewhat less than a few years ago, overall

some people have finished their educations and fear they may never earn enuf to pay off the debts for school!

there were some local "counts" of homeless persons last summer;  the trends were not very encouraging, but there were indications that people were able to get help;  how effectively they were able to use the help is another question for many

Fri, 01/13/2012 - 03:51 | 2060863 KickIce
KickIce's picture

Exactly, I live in an area that has several government contractors and with 3 wars we have not yet experienced the pain that many area have felt.  I think most around here like the ponzi because it gives the illusion of prosperity,

Fri, 01/13/2012 - 03:40 | 2060855 KickIce
KickIce's picture

Take a look at the amount of debt taken on during the Bush / Obama years.   Then you need to consider that the only real growth has come through increasing the size of government which burdens the private secror even more.  Another thing that I don't think gets near enough attention is the amount of property that is now owned by the Fed and CBs through foreclosures, this housing "crisis" has resulted in one of the largest land grabs ever.  And yet another consideration is the amount of government intrusion through Homeland Security, the Healthcare Act, the NDAA not to mention the TSA and EPA.  The noose is getting tighter and most do not even realize what is happening.

Thu, 01/12/2012 - 22:21 | 2060380 Global Hunter
Global Hunter's picture

time to get concerned?

No way everything is fine...(edit)...the Bernank has created the best economic models of like all time and everything is going to plan after all so why bail now?...right?

Thu, 01/12/2012 - 22:12 | 2060389 The Axe
The Axe's picture

ZH has mentioned this a few times over the years...but the markets are broken,,not just broken but fucking broken beyond repair... No one...and I mean NO one can read a current banks financial statement...or a REITS   just lies upon lies..bad marks, upon bad marks... Natural Gas is on its way south...maybe .99 cents  I have no clue...but its down beyond crazy...yet no one takes a markdown.. I you guys know   go on and on...the true structure of the economy has no current reality to equities at all...period... they are broken...

Thu, 01/12/2012 - 23:38 | 2060568 Bob Sacamano
Bob Sacamano's picture

Which main line REIT has unreadable financials??  Curious.  I would focus on the income statement (& cash flow) and the right side of the balance sheet.

Thu, 01/12/2012 - 22:16 | 2060395 comacho2012
comacho2012's picture

Hmmm....I wonder what they could possibly be converting ALL those USD into???

Have you seen the increase in Chinese gold and silver purchases lately?

Thu, 01/12/2012 - 22:17 | 2060401 Pants McPants
Pants McPants's picture

Nothing to worry about here.....after all, the US gov will eventually force retirement accounts to pick up for this slack in demand.

It won't be pretty, but eventually .gov will get after those 401ks and IRAs.  It will be considered a US citizen's "patriotic duty" to purchase .gov paper.  Those who refuse will be branded terrorists.

Fri, 01/13/2012 - 01:40 | 2060761 Things that go bump
Things that go bump's picture

Cashed mine in and spent it all.  I will not be paying for this.

Thu, 01/12/2012 - 22:25 | 2060403 Randall Cabot
Randall Cabot's picture

Frank Nitti discusses foreigners:

Fri, 01/13/2012 - 11:47 | 2061581 SomethingWicked
SomethingWicked's picture

Nice article.  Helped me understand the motivation and profit behind the manipulation angle; the ability to place 'unlimited' escalating bets to the short side, then push over weak margin longs.


Thu, 01/12/2012 - 22:29 | 2060436 laosuwan
laosuwan's picture

selling to whom?

Thu, 01/12/2012 - 22:38 | 2060466 jomama
jomama's picture

the music is still playing, bitchez!

Thu, 01/12/2012 - 23:44 | 2060578 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

On the Titanic

Fri, 01/13/2012 - 00:44 | 2060685 Falcon15
Falcon15's picture

Time to rearrange the deck chairs!

Thu, 01/12/2012 - 22:45 | 2060482 RobotTrader
RobotTrader's picture

Paper, Bitchez!!


The slightest whiff of a "Risk Off" event sends everybody and their brother clamoring for Treasuries and Muni-Bonds!!

Thu, 01/12/2012 - 23:53 | 2060594 riphowardkatz
riphowardkatz's picture

Negative real interst BITCHEZ!

Thu, 01/12/2012 - 23:57 | 2060601 The Monkey
The Monkey's picture

Or, the polar opposite.

Fri, 01/13/2012 - 00:34 | 2060666 Central Bankster
Central Bankster's picture

Hey and Sun Micro Systems went to the moon..... until it didn't.

Fri, 01/13/2012 - 00:55 | 2060697 Teamtc321
Teamtc321's picture

Move along Robo Troll. Have you ever mixed purple with pearl?


Sound Money Bitcheez!!

Thu, 01/12/2012 - 23:04 | 2060519 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The chart had the same trendline until a change started in September.  It could have held up if there was a reprise during November, but the selling continued.  December saw a usual cyclical buying trend, but now that the selling is back things have changed.  This is an ugly chart, and it looks like the top of a bubble.  The top is a double, yet surprisingly not too bearish.  But when we consider the importance of the UST market, especially right now when global turmoil (Europe, Iran, China) is in full swing, shows a level of desperate manipulation that is "all in".

Thu, 01/12/2012 - 23:12 | 2060532 tarsubil
tarsubil's picture

Maybe I'm missing something, but a lot of them are at 0. Isn't that basically maxed out? I don't see how they have any other choice but to sell. The Fed buys, they all approach 0, more selling by China et al, and then dump their dollars into tangible assests, inflation to the moon, dollar is done. Like I said before, we've already seen the flash and we are waiting for the shockwave. It's already happened. Or maybe I'm missing something.

Thu, 01/12/2012 - 23:21 | 2060546 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Please be more clear:  What is at zero?  What is maxed out?

Fri, 01/13/2012 - 00:22 | 2060644 slewie the pi-rat
slewie the pi-rat's picture

the interest rate or the effective ROI, most likely, is approaching or at zero return

so, maybe the price is "maxed out" and ready to come down as money moves out of bonds and into other assets, especially those which are inflation-sensitive

or maybe something else i don't see;  hard to tell, sometimes...

Thu, 01/12/2012 - 23:05 | 2060521 papaswamp
papaswamp's picture

Worried?....everyone will go Japan and buy their own debt. Europeans are now doing it hence the successful Spanish and Italian auctions. This is the new normal. Debt can continue to grow because everyone buys their own debt and no one else calls them on it. The citizens certainly won' who else is there? 

Thu, 01/12/2012 - 23:23 | 2060551 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Japan had the public buy their debt.  There is a big diference. 

Fri, 01/13/2012 - 00:43 | 2060681 Falcon15
Falcon15's picture

Um, sorry to break it to you, LH, the US Households are the 3rd largest holder of US debt. Social Security is #1, The Fed is #2. China is way down the chart at #4. If you really wanted to be "technical" the US Taxpayer is the largest holder of American Debt because the US Taxpayer funds Social Security.

Fri, 01/13/2012 - 01:13 | 2060725 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Oh, oh yeah.  I forgot.  The household number.  And who would this be?  The Greatest Generation getting negative real return on money they earned 30 years ago....

Oh, and offshore hedge funds.  Them too.

Fri, 01/13/2012 - 08:10 | 2060960 Sandy15
Sandy15's picture

How can the citizens call them on it?  I personally have called the NY Fed and said it's not right they trade the market when they can print their own money.  They ignore and move on.

Thu, 01/12/2012 - 23:26 | 2060554 Jlmadyson
Jlmadyson's picture

More they churn out the more they will need every single month.

Thu, 01/12/2012 - 23:48 | 2060572 slewie the pi-rat
slewie the pi-rat's picture

stuff happens


not very often, granted, but here we had a shortage of dollars here & there and a surge in the dollar index and bond prices.  sell the bonds;  get FRNs;  enjoy!

what if the bonds  have not been "sold" but re-hypothecated for EU shenanigans.  would that change the FED accounting here and move the digits out of the "Custody" account?  [L0L!!! the FED has "lost custody"?]

or maybe the bonds were shorted;  and "dumped to cover"/delivered which would = sold

Thu, 01/12/2012 - 23:48 | 2060585 non_anon
non_anon's picture

last one out is a ...

Thu, 01/12/2012 - 23:48 | 2060587 Westcoastliberal
Westcoastliberal's picture

Where to stash your cash right now kinda reminds me of the people running around looking for a "safe" place as the Titantic was sinking and the lifeboats were already full. Capt Bernanke at the helm with Bosun Geithner at his side.

Thu, 01/12/2012 - 23:57 | 2060600 HD
HD's picture

More "self censoring" at CNBC.  I'd love for Tyler and company to take a hard look at that. Cramer admitted it on SOTS (and then back pedaled with all his heart).

10 CNBC sells advertising time to money managers.

20 CNBC interviews the same money manager/advertisers and asks, "where should viewers put there money?"

30 Money manager talks his book. CNBC runs his commercial.

40 Go to 10

Fri, 01/13/2012 - 00:31 | 2060654 Central Bankster
Central Bankster's picture

The funniest shit about CNBC is that they keep peddling the same ideas over and over:  "High Quality dividend paying stocks". " High Quality domestic companies with international exposure".  "High quality muni bonds" etc.  These trades are so damn crowded by the "value" investor.  Whatever that shit means.

Fri, 01/13/2012 - 00:05 | 2060614 Bansters-in-my-...
Bansters-in-my- feces's picture

A little off topic.
Gold just got HAMMERED....
Fuck you's Ben and Timmy....

Fri, 01/13/2012 - 02:12 | 2060800 jimmyjames
jimmyjames's picture

Gold just got HAMMERED....



Gold just broke out of a perfect bull flag pattern-

Fri, 01/13/2012 - 00:28 | 2060651 Central Bankster
Central Bankster's picture

Total Treasury in custody: Lower high, Lower low and an increasing rate of issuance = Ruh Roh.

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