80% of US debt purchased by the Fed in 2009?!
- Thread starter DrPepper
- Start date
The Fed is Wall Street. They are one and the same.
There are multiple crises going on right now. One is Federal Spending, which is unavoidable when you have a system where money is created thru debt.
The other crisis is the financial meltdown and the subsequent questionable Fed actions that benefitted those that collapsed the system.
There's a reason for anger at the Fed. It's justified.
I am trying to add them up.
In the last yr (ending 9/30), depository institutions are only holding an extra 50B in securities.
Edit: SIFMA issuance #s are gross. Net issuance was 1.3T
So that is 500B from International, 300B from the Fed, 50B from banks. That leaves 450B for local investors, correct?
Got a good resource that shows domestic investors' net holdings of US treasuries q/q ? I recall a while back one government organization putting out something on net assets/holdings, but forget the name of the report right now.
Right now member banks are loaning 1.1B back to the Fed (c/o of the MBS program). Obviously not lending because they aren't incentivized, as the Fed is short circuiting the money multiplier by not 1) penalizing excess reserves and 2) paying interest on reserves loaned back to the Fed.
Here is more information on it.
"In 2009 the government issued $1.92 trillion in Notes while redeeming $605 billion, for a net annual issuance of $1.3 trillion. The chart indicates that the three busiest months for the Treasury were November, June and March, when $313 billion, $266 billion and $254 billion, respectively, were issued ($221 billion, $206 billion, and $193 billion net of redemptions). If this patterns will repeat we should expect a substantial ramp up in Note issuance in 2010. In January 2009 only $64 billion in Notes and Bonds was issued: we believe we will likely double this total with the very first 2010 auction alone. In 2009, the average monthly Note issuance was $160 billion gross and $110 billion net: another set of numbers which will easily be surpassed in the coming year.
Finally, the combination of Bills, Notes and Bonds net monthly issuance can be seen on the chart below: 2009 was truly a busy year for Tim Geithner. All in all $1.26 trillion of net new govvies found buyers. Of this, a sizable amount was acquired by the Federal Reserve and Primary Dealers. "
http://www.zerohedge.com/article/trending-us-sovereign-issuance-2009
"In 2009 the government issued $1.92 trillion in Notes while redeeming $605 billion, for a net annual issuance of $1.3 trillion. The chart indicates that the three busiest months for the Treasury were November, June and March, when $313 billion, $266 billion and $254 billion, respectively, were issued ($221 billion, $206 billion, and $193 billion net of redemptions). If this patterns will repeat we should expect a substantial ramp up in Note issuance in 2010. In January 2009 only $64 billion in Notes and Bonds was issued: we believe we will likely double this total with the very first 2010 auction alone. In 2009, the average monthly Note issuance was $160 billion gross and $110 billion net: another set of numbers which will easily be surpassed in the coming year.
Finally, the combination of Bills, Notes and Bonds net monthly issuance can be seen on the chart below: 2009 was truly a busy year for Tim Geithner. All in all $1.26 trillion of net new govvies found buyers. Of this, a sizable amount was acquired by the Federal Reserve and Primary Dealers. "
http://www.zerohedge.com/article/trending-us-sovereign-issuance-2009
Investment funds (hedge funds, investment pools, etc) based in London perhaps? So that represents investor demand at least partially, right?
The UK is broke. They don't have any money to buy anything with.
I think we are giving them the money, sort of like we gave AIG the money to pay off GS and the other thieving Banks.
Makes sense. I just found this is from Barry Ritholz's blog:
Foreign purchases of long term US assets exploded higher in Nov by $127b, well above expectations of $25b and were led by net purchases of US Treasuries totaling $118b, an all time record high for one month. Buying from the UK, which could have been foreign central banks and/or hedge funds purchasing US debt thru UK based banks, led the way, increasing net purchases by $47.4b. Japan, the 2nd biggest foreign holder, was the 2nd biggest buyer, at $11.4B. The Chinese however were net sellers by $9.3b and their long term holdings are at the lowest since June. Net purchases of GSE bonds rose by $5.9b following net selling of $5.4b in Oct. Selling of corporate bonds totaled $4.6b and foreigners have been net sellers for 7 of the last 8 months but they keep buying US stocks as purchases totaled $9.7b and have been buyers ever since the March low. US investors were net buyers of foreign bonds but sellers of foreign stocks.
http://www.ritholtz.com/blog/2010/01/foreign-purchases-of-us-treasuries-exploded-higher-in-nov/