PDA

View Full Version : Calling all treasuries



orion
10-03-08, 04:49 PM
I saw what I thought was a crazy comment from a financial website (not a major one) saying that BIS told US to bring home treasuries so they can blow up at home. But this idea has grabbed more of my attention especially after reading this post from ContraryInvestor.com;

http://safehaven.com/article-11433.htm

The article talks about our foreign supporters reducing their purchases of US assests. Add to this as the markets drive more US citizens to look for security in treasuries, wouldn't this be the time for foreigners to start selling? My back of envelope numbers (from a New York Times article on orders of magnitude values) show 4 trillion in treasuries and 22 trillion in equities. By selling 20% of equities you could buy out the treasuries. Maybe this is why longer term treasuries have been so hard to sell, when panick hits what is the best thing to sell, why short term, no?

I hope I haven't totally screwed up on something here, comments?

jtabeb
10-03-08, 11:19 PM
I saw what I thought was a crazy comment from a financial website (not a major one) saying that BIS told US to bring home treasuries so they can blow up at home. But this idea has grabbed more of my attention especially after reading this post from ContraryInvestor.com;

http://safehaven.com/article-11433.htm

The article talks about our foreign supporters reducing their purchases of US assests. Add to this as the markets drive more US citizens to look for security in treasuries, wouldn't this be the time for foreigners to start selling? My back of envelope numbers (from a New York Times article on orders of magnitude values) show 4 trillion in treasuries and 22 trillion in equities. By selling 20% of equities you could buy out the treasuries. Maybe this is why longer term treasuries have been so hard to sell, when panick hits what is the best thing to sell, why short term, no?

I hope I haven't totally screwed up on something here, comments?

Keep it up, good work! (looks about right to me)

c1ue
10-04-08, 06:25 PM
Orion,

It has already been noted in earlier articles on iTulip that private purchases (foreign or otherwise) of Treasury and agency bonds has fallen off dramatically.

It has been the foreign central banks who have been buying the vast majority in the past few years.

The question is: what will they do now?

phirang
10-04-08, 06:47 PM
Orion,

It has already been noted in earlier articles on iTulip that private purchases (foreign or otherwise) of Treasury and agency bonds has fallen off dramatically.

It has been the foreign central banks who have been buying the vast majority in the past few years.

The question is: what will they do now?

Keep it up or let the beast die.