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Frank Hovis

Massive Sell-Off In Us Treasuries

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....either that graph has been made by someone with enormous thumbs or we`re all in trouble.

When I say `all` I don`t include the UK of course.

Edit... prefered the second one..it had that certain something.

Edited by council dweller

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....either that graph has been made by someone with enormous thumbs or we`re all in trouble.

When I say `all` I don`t include the UK of course.

We are special you mean? Outside the normal economic paradigms due to our Great Leaders guile and special monetary skills?

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We are special you mean? Outside the normal economic paradigms due to our Great Leaders guile and special monetary skills?

Well no, I was referring to Paul Daniels...he`s sure to have a trick up his sleeve.

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I think he's got his knickers in a twist.

Prices / yields barely moved. Certainly nothing like he implies they should have. If someone sold then someone also bought (by definition).

http://scharts.co/1d5kITs

Or Russia, which may be dumping USTs to support the ruble...

Sounds plausible. Rouble hammered, they're forced to sell reserves to buy roubles.

This is about Russia/China, not about the US. ZH going into over-drive now in the propaganda war, following Russia Today losing two of its anchors. Where's their chart of the Central Bank of Russia bond asset holdings? Surely they want to show their readers what's going on in Russia don't they? It's far more serious......

Edited by R K

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I think he's got his knickers in a twist.

Prices / yields barely moved. Certainly nothing like he implies they should have. If someone sold then someone also bought (by definition).

This doesn't make sense then. According to ZH foreign treasury bill holdings dropped by $104billion. If prices barely moved and someone (by definition) bought them, then that someone must have been a domestic buyer. So which domestic buyer could and would buy that many treasuries - just to keep prices stable?

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This doesn't make sense then. According to ZH foreign treasury bill holdings dropped by $104billion. If prices barely moved and someone (by definition) bought them, then that someone must have been a domestic buyer. So which domestic buyer could and would buy that many treasuries - just to keep prices stable?

Someone with deep pockets and a keen interest in keeping prices stable? The BoE, for instance??

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Someone with deep pockets and a keen interest in keeping prices stable? The BoE, for instance??

Not deep pockets - a printing press.

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This doesn't make sense then. According to ZH foreign treasury bill holdings dropped by $104billion. If prices barely moved and someone (by definition) bought them, then that someone must have been a domestic buyer. So which domestic buyer could and would buy that many treasuries - just to keep prices stable?

These fallacious arguments. Yes, there is a buyer in every sale, but it is nonesense to extrapolate that the price remains stable. It depends on how badly the parties want to buy and sell and what price each is willing to accept and how many buyers and sellers are bidding and asking.

It is all about the buying and selling pressure. And that moves prices, sometimes radically.

apologies, that was directed at R.K.

Edited by evetsm

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The FT had an article about this. What the graph actually shows is the total held in custody by the Fed itself. What appears to be happening is that some large holders of US Debt, e.g. Russia, are moving their holdings to other custodians in case of Crimea related sanctions, asset freezes etc.

edit to add:

WSJ has it too: http://blogs.wsj.com/moneybeat/2014/03/14/did-russia-just-dump-its-treasury-holdings/

Edited by TheBlueCat

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These fallacious arguments. Yes, there is a buyer in every sale, but it is nonesense to extrapolate that the price remains stable. It depends on how badly the parties want to buy and sell and what price each is willing to accept and how many buyers and sellers are bidding and asking.

It is all about the buying and selling pressure. And that moves prices, sometimes radically.

apologies, that was directed at R.K.

I think RK was pointing out that, despite the huge sell off,the price barely moved last week. These two points, if the charts are reliable, appear to be facts and not "fallacious arguments".

I would think it quite remarkable that such a sudden and large foreign pressure to sell US Treasures is matched by an exactly equal, sudden and large, domestic pressure to buy.

I agree that such a situation is not impossible, but don't you smell a rat?

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The FT had an article about this. What the graph actually shows is the total held in custody by the Fed itself. What appears to be happening is that some large holders of US Debt, e.g. Russia, are moving their holdings to other custodians in case of Crimea related sanctions, asset freezes etc.

edit to add:

WSJ has it too: http://blogs.wsj.com/moneybeat/2014/03/14/did-russia-just-dump-its-treasury-holdings/

I've just read the WSJ article and things are no clearer. The implication is that the Russian CB has hidden their holdings of US Treasures. Not sold them. $104 billion of them. Truly bizarre. If true, I would say a very serious breakdown in US/Russian relations.

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I agree that such a situation is not impossible, but don't you smell a rat?

There ain't no rodent, it's called a depot transfer in the business. Last month Russia (or maybe just Russians) held its US bonds at the Fed, this month it moved the holdings to, say, Euroclear. There were no buys or sells, just an asset move.

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I've just read the WSJ article and things are no clearer. The implication is that the Russian CB has hidden their holdings of US Treasures. Not sold them. $104 billion of them. Truly bizarre. If true, I would say a very serious breakdown in US/Russian relations.

They don't trust the US government not to freeze them, I don't see anything odd about that. I wouldn't trust them with my assets either.

Not sure if this will help, but think about owning shares. Your options are to keep them in a brokerage account or, if you want to pay a bit more, your own CREST account. When you hold them in the brokerage account they're co-mingled with a load of other people's shares. The information about who owns what is all still there but it's a lot harder to get at. This is like Russia taking its bonds out of its own CREST account and moving them to a CREST account owned by, for example, VTB where they'll be mixed up with all sorts of other people's bonds.

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They don't trust the US government not to freeze them, I don't see anything odd about that. I wouldn't trust them with my assets either.

Not sure if this will help, but think about owning shares. Your options are to keep them in a brokerage account or, if you want to pay a bit more, your own CREST account. When you hold them in the brokerage account they're co-mingled with a load of other people's shares. The information about who owns what is all still there but it's a lot harder to get at. This is like Russia taking its bonds out of its own CREST account and moving them to a CREST account owned by, for example, VTB where they'll be mixed up with all sorts of other people's bonds.

Do you mean they will offload US debt if sanctions are used against them, but couldn`t risk having the holdings frozen before they could start a sell off?

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