Who Is the ‘One Big Bidder’ For US Treasuries?
by ilene - January 14th, 2010 7:09 pm
Who Is the ‘One Big Bidder’ For US Treasuries?
Courtesy of Jesse’s Café Américain
There are a number of possibilities for the identity of the non-primary dealer domestic source of enormous purchases at the longer end of the yield curve in recent US Treasury auctions.
It could be a misclassification, a branch of a bank representing a foreign power. The problem with this theory is that [they] have a particular reluctance to buy the long end of the curve.
It also could be a legitimate domestic purchaser like a pension fund compelled to match duration of obligations, as is required by a little noted ruling of the US government a couple of years ago. They might be shifting out of other long term instruments with similar durations but more risk.
It might even be PIMCO. They certain have the money as the world’s biggest bond fund, and they do offer two Treasury ETF’s which although not directly related to the buys might be relevant on a cross trade. And they have recently been talking down Treasuries in favor of corporates, which doesn’t mean anything since traders often ‘talk their book.’ Still, unless its for the ETF it is hard to justify buying the long durations straight up in size. And while PIMCO says they do not like Treasuries, Benny and the Fed said they are buying long to keep interest rates lower. Why doubt them?
And of course, it might very well be the Federal Reserve Bank, or the Treasury via the Exchange Stabilization Fund.
It could also be the one big bidder who comes in with some regularity and smashes down the price of precious metals with the obvious intent of manipulating the market like clockwork just after the PM fix in London.
It might even be the big bidder who stands ready to buy the SP futures market at every turn, maintaining a floor on the market and a steady drift higher in prices with no change in fundamental underpinnings. Their hand in the market is apparent.
It is less probable, given the state of market manipulation by a few big proprietary trading desks riding another wave of cheap FEd money, but it might even be the party that entered the US equity market yesterday at 12:03 PM with a HUGE order (228,000…
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Manipulation: How Markets Really Work
by ilene - May 31st, 2009 7:10 am
Click here to sign up for a free subscription to the PSW Report. It’s easy! – Ilene
Don’t miss reading this enlightening article. "Thank yous" to author Stephen Lendman ("we need a mass public awakening determined to change a very ugly system"), and Tyler Durden for finding.
Manipulation: How Markets Really Work
By Stephen Lendman, posted at Steve Lendman’s Blog and at the Baltimore Chronicle
Wall Street’s mantra is that markets move randomly and reflect the collective wisdom of investors. The truth is quite opposite. The government’s visible hand and insiders control markets and manipulate them up or down for profit – all of them, including stocks, bonds, commodities and currencies.
It’s financial fraud or what former high-level Wall Street insider and former Assistant HUD Secretary Catherine Austin Fitts calls "pump and dump," defined as "artificially inflating the price of a stock or other security through promotion, in order to sell at the inflated price," then profit more on the downside by short-selling. "This practice is illegal under securities law, yet it is particularly common," and in today’s volatile markets likely ongoing daily.
Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it "pump(ing) and dump(ing) of the entire American economy," duping the public, fleecing trillions from them, and it’s more than just "a process designed to wipe out the middle class. This is genocide (by other means) – a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts."
Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it "pump(ing) and dump(ing) of the entire American economy," duping the public, fleecing trillions from them, and it’s more than just "a process designed to wipe out the middle class. This is genocide (by other means) – a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts."
Fitts explains that much more than market manipulation goes on. She describes a "financial coup d’etat, including fraudulent housing (and other bubbles), pump and dump schemes, naked short selling, precious metals price suppression, and active intervention in the markets by the government and central bank" along with insiders. It’s a government-business partnership for enormous profits through "legislation, contracts, regulation (or lack…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.