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The Federal Reserve reports foreign investors selling $23B in Treasurys in the week ended Dec....
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Friday, December 30, 2011, 8:02 AM ETThe Federal Reserve reports foreign investors selling $23B in Treasurys in the week ended Dec. 28, bringing their holdings down to $2.67T. Looking at the data series which goes back to 2002, it's the 2nd highest total of weekly sales ever, and brings net sales over the past month to $69B.
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We know the game is rigged yet we scratch our heads when it does not make sense, when the game makes sense the rules have to change otherwise everyone could win.
For someone to win someone has to loose, just like Vegas...
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It isn't disconnected from the fundamentals. Treasuries reflect fear and equities reflect earnings.
Only cult followers believe the End of the World is Imminent.
Didn't know that ....
When I wake up in the morning I can tell where the stock market will open based on the gold and silver price because they are moving in the same direction. That should not be happening in this environment.
Didn't know that ...."
Lol I was thinking the same thing.
Either one ushers in The Collapse. Choose your demon.
The relevant measure is not Fed purchases as a percent of net issuance, but Fed purchases as a percentage of all purchases. I guarantee that will be a lot smaller percentage.
In order for the Fed to suppress yields, it would be necessary for them to be in the market everyday. The Fed is not in the market today, yet even when its absent, yields do not move higher.
A much better explanation of bond yields is fear.
That right, I meant to say in an earlier post that the fed AND pd's are dominating the market. And of course, PD's HAVE to bid on treasuries at auction.
Most of what they buy is resold.
So what is driving demand is end users, not intermediaries.
Since Treasury yields have varied dramatically over the last forty years and the current primary dealer has system has been in place the entire time, the primary dealers don't explain variations in Treasury prices.
What point did I miss? I know they're dealers...but when the pds buy treasuries at auction that impacts the price...DUH
When they flip them to the fed that impacts the price...DUH
Therefore, the fed's buying of treasuries drives down rates. I can't believe I'm even typing this out right now.
I'm not even sure what you're saying. The fed's buying of treasuries lowers treasury yields ceteris paribus. You might as well argue that the earth is flat if you want to disagree with this point
The primary dealers have been major market players - so they do not explain today's low rates.
Treasury bond yields are not surprising given the balance sheet recession from which the world just emerged. We see in America today many of the problems experienced by Japan after its balance sheet recession. Same set of problems - ultra low interest rates, stubbornly high unemployment, inability of the Central Bank to lower interest rates, etc.
"inability of the Central Bank to lower interest rates, etc."
What do you mean? The fed controls interest rates through reserve balances.
What are you smoking over there in paris.
Der der der. The fed's zirp is DIRECTLY responsible. So if you want to play semantic games I guess you could say the pd's aren't directly responsible. They just play a ROLE in the process because they have to bid at auctions. I can't believe I'm even having this conversation.
I thought all this china taking over the world crap would end. I guess not.
If we had a Republican in the WH I do think Ben would be brought up on charges ! He should be !
And, my comments concerning the US reserve will come to pass and if you don't think that two enemies like China an Japan coming together an signing a swap agreement without the US reserve is a monstrous wake up call. Add that to the BRICs are already dollar less..An OPEC wanting agreements without US dollar an now Iran sanctions ! I will be the canary and I am prepared ! Luck to all, pok
And, US grade schools are now teaching Chinese in huge numbers. And that is great and every student in the US should be fluent in English an Spanish as NAFTA should force us to join with out Latin Neighbors to compete with EU an Asia !
There is nothing really socialist about the United States. It is paradise for entrepreneurs.
Would you be Mr. Multinational apartment flipper if it was so good in the US?
Since you have a degree in Economics and are vested in the status quo can you explain the practices of Front Running coupled with High Frequency trading and the practice of "Black Pools".
In a fair and honest economic system why are practices like this allowed to continue?
The us is a paradise for entrepreneuers? You're talking out of your ace you socialist piece of garbage.
And of course, in order to hire myself as an employee I had to send a copy of my university diploma to the Hungarian Work Authority.
EW! At least you have crepes and art though.
Your logic seems to go like this:
'The US is more entrepreneurial than where I have worked in europe.
Therefore, the US is an entrepreneurial paradise!
Did I mention I've never started or owned a business in the US? der der der'
What kinda drugs are you doing over there comrade
That is why Geitner begs the EU an ECB to PRINTTTTTTTTTTTTTTTT.. If the PIIGS go the EU big banks all go an an US big banks are holding the whole ball of wax !
Me........ I have gone big into 10 year Brazil bonds over 12% and compounding in 6+% bank accounts...........
I am very sure by the time they mature the Real will increase in value over the dollar an the Fed's plan it to weaken it. Maybe EU's problem will rally the dollar short term,but 9/10 years out Brazil's commodities will drive them into the top economic 3 from number 6 as they just passed England.......
Note : Yes there is a 6% foreign investment tax now,but, I have an established account from the 80s and for new investers making the trip to buy an open an account is tax deductable an will offset quite a large bond buy.....