Treasury To Sell 10 Year Bonds two Hours After Fed Buys... 10 year Bonds

[Letsbereal]

Treasury To Sell 10 Year Bonds At Record Low Yield Two Hours After Fed Buys… 10 Year Bonds
13 June 2012, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/news/treasury-sell-10-year-bonds-record-low-yield-two-hours-after-fed-buys-10-year-bonds

Excerpt:

Where things get patently surreal, however, is when one takes a look at today’s POMO operation conducted by the Fed (remember those).

Because as can be seen on the table below from the NY Fed, at 11 am today, so precisely 2 hours before when the Treasury will complete its own sale, bought $4.8 billion of… wait for it… 10 Year bonds.

To summarize:

At 11:00 am Fed buys $4.8 billion in 10 Year bonds

At 1:00pm the Treasury sells $25 billion in 10 Year bonds

Only in non-monetizing America, ladies and gents.

[Letsbereal]

The Absurdity Continues: Fed Buys 30 Year Bonds Two Hours Before Treasury Sells 30 Year Bonds
14 June 2012, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/news/absurdity-continues-fed-buys-30-year-bonds-two-hours-treasury-sells-30-year-bonds

Excerpt:

Yesterday we noted the supreme absurdity of having the Fed buy 10 year Bonds two hours before the Treasury sold 10 year bonds

(which obviously priced at terrific terms as there was a $4 billion hole created courtesy of the Fed if only for 2 hours).

Today, the lunacy continues.

The Fed has just bought $2 billion in 30 year bonds just two hours before the Treasury sells $13 billion in 30 year paper.

The ponzi has become so glaring they don't even care to hide it any longer.

[Jackson Holly]

The Absurdity Continues: Fed Buys 30 Year Bonds Two Hours Before Treasury Sells 30 Year Bonds
14 June 2012, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/news/absurdity-continues-fed-buys-30-year-bonds-two-hours-treasury-sells-30-year-bonds

Excerpt:

Yesterday we noted the supreme absurdity of having the Fed buy 10 year Bonds two hours before the Treasury sold 10 year bonds

(which obviously priced at terrific terms as there was a $4 billion hole created courtesy of the Fed if only for 2 hours).

Today, the lunacy continues.


The Fed has just bought $2 billion in 30 year bonds just two hours before the Treasury sells $13 billion in 30 year paper.

The ponzi has become so glaring they don't even care to hide it any longer.

Explain to me what this means ....

[Letsbereal]

Explain to me what this means ....

What this means in short is 'Eating your own dogfood'. So the government sells bonds but buys them as well.

That's not how it suppose to go. Companies and other than the government themselves should buy these treasury bonds.

But because there are not as many buyers out there the government who sells buys as well. Not good.

They do it cause they are very afraid for rising interest rates which would make US debt payments so much higher and unsustainable in the end.

US debt is unsustainable anyways but by 'eating their own dogfood' they hope to kick the can down the road for a while.

As a result they create a giant bond bubble ready to explode any time. When rates rise that will happen eventually.

Can take a year or three, nobody knows exactly when but it's sure to happen in some point in time.

[Jackson Holly]

^ ^ ^ ^

Thanks Letsbereal ... so they are trying to keep interest rates down?


Also ..."So the government sells bonds but buys them as well."

Are we considering the FEDERAL RESERVE to be US Government?
Doesn't sound like an actual 'legal' purchase of the bonds to me.


 ... just trying to understand.

[Letsbereal]

^ ^ ^ ^

Thanks Letsbereal ... so they are trying to keep interest rates down?


Also ..."So the government sells bonds but buys them as well."

Are we considering the FEDERAL RESERVE to be US Government?
Doesn't sound like an actual 'legal' purchase of the bonds to me.


 ... just trying to understand.

They've been doing this for quiet some while now but via so-called special vehicles/proxies.

These are special institutions errected by the government to play the markets and act as bond buyers with taxpayers money given to them by the FED.

They must be very afraid and desperate enough to conduct these kinda operations in the open now.

They also had the idea (or maybe they already are doing it) to give the banks taxpayers money under the condition they buy government bonds with it.

In essence the same thing but in a diffirent way 'eating your own dogfood' indeed with the only goal to keep interest rates low.

They painted themselves in the corner with this because if interest rates rise the US debt payments become unpayable immediately and that is the end of it.

So they are lieing when the FED discusses dates in the future when they are supposely are going to higher interest rates.

They can't and they won't! It's a scam.

[Jackson Holly]

Sounds like a scam to just prop up the dollar ...
borrowing from Peter to pay Paul. But for sure,
it is all a scam, the way they shuffle around all
that worthless 'currency'.

[fred.greek]

Re: "... the government sells bonds but buys them as well... "

You all do know that the "Federal Reserve Bank" is NOT a government entity...

It is a collection of PRIVATELY owned banks that the government has handed power to over other banks...