My latest ...
http://www.financialsense.com/fsu/ed...2009/0804.html
The prior week's article, "Fed Exit Strategy?" can also be found on the Financial Sense website here ...
http://www.financialsense.com/fsu/ed...009/0729a.html
Brian
"Lending" a Helping Hand
My latest ...
http://www.financialsense.com/fsu/ed...2009/0804.html
The prior week's article, "Fed Exit Strategy?" can also be found on the Financial Sense website here ...
http://www.financialsense.com/fsu/ed...009/0729a.html
Brian
Last edited by gonegolfin; 08-04-2009 at 11:30 AM.
Hey Brian. Nice to see you again. The link appears to be broken.
Dilige et quod vis fac. ~ Saint Augustine
Hello Deborah.Originally Posted by Deborah K
I am not having any problems with the link in my post (IE or Firefox). Is anyone else having a problem?
Brian
Can't get it to work.
Dilige et quod vis fac. ~ Saint Augustine
It's working here.
"Molon Labe"
The link works for me. Good article. I remember all of the "happy surprise" that the auctions went better than expected. So the Fed is buying them back on the secondary market, in one of those behind the scenes deals Ron Paul wants exposed?
Yes, the Fed is buying a combination of 1) some of the paper being auctioned during the time period discussed and 2) outstanding paper in the treasury debt market auctioned well in the past (before the time period discussed).
It may be "behind the scenes" deals because it is done with a wink and a nod to the primary dealers. That is, the Fed implies that they will purchase a certain percentage of debt, at a certain time, if they participate (in the auction) at a certain level. Meanwhile, the primary dealers make their fees, commissions, and ultimately profits from these massive auctions.
However, I do not consider it to be "behind the scenes" from the standpoint that the actual data is there for all to see. You simply need to know where to dig and perform the actual digging. You do not need an audit for this.
Brian
The results for the Fed scheduled purchase of 8/5/09 are in. $7.248 billion of treasuries maturing between 12/31/2013 and 4/30/2016 were purchased. What is interesting is that the largest purchases made were of securities recently auctioned.
The below constitutes the largest securities purchases in this operation ...
- $4.14 billion of the 5-year Notes (CUSIP 912828KV1) maturing on 5/31/14 were purchased. These Notes were issued by the Treasury on 6/1/09.
- 1.669 billion of the 5-year Notes (CUSIP 912828KN9) maturing on 4/30/14 were purchased. These Notes were issued by the Treasury on 4/30/09.
- 879 million of the 7-year Notes (CUSIP 912828DV9) maturing on 5/15/15 were purchased. These Notes were issued by the Treasury on 10/15/08.
- 206 million of the 5-year Notes (CUSIP 912828LC2) maturing on 7/31/14 were purchased. These Notes were auctioned last week and issued by the Treasury on 7/31/09.
Tomorrow, purchases of treasuries maturing between 5/15/16 and 5/15/19 will be made. It will be interesting to see if some of these purchases are from the 7-year Treasury auction that took place last Thursday (which went so well). If they are not from last Thursday, they will likely be from the May or June 7-year auctions.
There will probably be some purchases of 10-year and maybe 30-year treasuries as well. $23 billion of 10-year Notes will be auctioned on 8/12 and $15 billion of 30-year Bonds on 8/13. They may attempt to soften up that auction.
Brian
Last edited by gonegolfin; 08-05-2009 at 11:38 AM.
Brian, did you see this one? It's from another thread...
http://www.ronpaulforums.com/showthread.php?t=203099
A fuse was lit this week when traders noted China's apparent absence from direct participation in two Treasury bond auctions. While China may have bought Treasurys just before the auctions, market participants read the country's actions as a worrying sign that China and other foreign investors may be ratcheting back purchases at a time when the U.S. is seeking to fund a $1.8 trillion budget deficit.
This week alone, the U.S. deluged the bond market with more than $200 billion in record-size sales. The U.S. has had little trouble finding buyers in recent months. But that demand is fading, and the Treasury market has become volatile."
Uncle Sam is goosing the bond market just like he is the stock market. Take a look at Treasury's latest bit of chicanery which was stuffed in the back pages of the Wall Street Journal back in June:
"The sudden increase in demand by foreign buyers for Treasurys, hailed as proof that the world's central banks are still willing to help absorb the avalanche of supply, mightn't be all that it seems.
When the government sells bonds, traders typically look at a group of buyers called indirect bidders, which includes foreign central banks, to divine overseas demand for U.S. debt. That demand has been rising recently, giving comfort to investors that foreign buyers will continue to finance the U.S.'s budget deficit.
But in a little-noticed switch on June 1, the Treasury changed the way it accounts for indirect bids, putting more buyers under that umbrella and boosting the portion of recent Treasury sales that the market perceived were being bought by foreigners." ("Is foreign Demand as Solid as it Looks, Min zeng)
Nice touch, eh? So, someone doesn't want you and me to know when foreign demand drops off a cliff, so they just bend-and-twist the definitions so they meet the Fed's requirements. How's that for transparency?. Apparently, Bernanke et al. don't believe the Chinese have translators who can make sense of all this subterfuge. That may be a miscalculation, however, given recent rumblings from the Orient.
Yes, I referenced this re-classification in the first paragraph of my article. Nobody really understands the details of what has happened. The results from this are speculation at this point.
Brian
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