Next week will be interesting to see how the money printers keep the duck tape on the markets, especially on the interest rate front. The Treasury needs to sell $22 billion in 3 yr Old Maid Cards on Monday, 11/8, then $15 billion 5 yr on Tuesday, followed by $14 billion 10 yr clown bucks on Wed. Then on Tues, the 16th we get an unlocking of 39.08 billion in GOOG "instant millionaire" shares, that's $6.64 billion at $170. Of course the big event that the cognoscenti breathless await for, is the "words and language" from the Land of Oz at Wed the 10th's FOMC meeting.
Meanwhile here's a glance at how the printers managed to get Bush reelected, and con voters with the 10 point increase in the Rasmussen consumer confidence in the month before the election. You will notice that the Fed, and the dealers/boyz were in full court printing press mode. The Fed monetized $1.637 billion a week over the last seven weeks, versus an average $927m over the last year. However, even that $927m is up from the yoy back in late August when it was $787m. Even more remarkable is the $11.201 billion in permanent injections since Sept. 20th.
Foreign CBs have been more erratic and not nearly as "helpful" of late, as clearly they have a different agenda (currency manipulation) rather than helping the US sell more clown buck Old Maid Cards, or getting Bush reelected. Are they backing away from intervention? Would seem so judging from their activity and the USD swoon lately.
futures.tradingcharts.com
tfc-charts.w2d.com
Foreign CBs only averaged $829m a week in purchases, versus the 52 week average of $5.74 billion. Although the foreign CBs came back in spades in the October 13-27 period, there is evidence of a new dynamic at work: US going it alone? Incidentally, a revealing "says it all" number for tattooing on one's forehead: the Fed and foreign CBs (not private buyers) have purchased $347.1 billion in US debt in the last 52 weeks. You need to print money to do that, pure and simple. Don't be surprised if we continue getting a helluva inflationary hangover from all this over the next several months or longer.
Fed debt monetization: I ask, "what bond vigilantes?" A source for tracking for alert people who actually care about such things, see "securities held outright":http://www.federalreserve.gov/releases/h41/Current/
11-3 1.858 b
10-27 2.504
10-20 1.05
10-13 911 m
10-6 2.089
9-29 1.578
9-22 1.461
7 week avg 1.460 b
52 week avg 927 m
Permanent OMO injections (cheap loans to dealers, cronies, boyz, and potential bagholders):
11-3 421 m
11-2 1.203 b
10-26 1.593
10-21 802
10-20 1.396
10-14 994
10-4 1.19 b
9-29 1.702
9-22 400
9-20 1.5
Foreign custody holdings (more potential bagholders, how's that "portfolio" doing lately Tokyo?). CBs now hold $1.300.8 billion, split between 1.052.6 treasuries, and 248.2 agencies:
11-3 1.718 b
10-27 4.839
10-20 6.052
10-13 -3.907
10-6 +517
9-29 +1.389
9-22 -450
7 week average: 829m
52 week average: 5.740 billion |
