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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: ItsAllCyclical who wrote (229951)11/23/2009 1:38:12 PM
From: ChanceIsRead Replies (1) of 306849
 
>>>but of course China owns a bunch of agency debt that we backed up so the real figure is much higher than 800 bil. <<<

Yes and no. I read a little while ago - but barley understood - that a lot (all) of US debt instruments (Treasuries, Agencies, etc.) which are owned by foreigners (sovereigns only?) are held in custody (street name?) by the US Treasury. I don't know the original intent, but I saw some data which suggested that the foreign ownership of Agencies was decreasing while their ownership of Treasuries was increasing. Geithner was apparently pumping cash into the Treasury to buy the Agencies from the foreigners. The foreigners retained all of their original Treasuries but added to those, new Treasuries in an amount equal to their original Agency holdings.

The author of the article suggested - and I agreed - that this allowed foreign Treasury ownership to increase w/o any foreign cash crossing the borders. IOW - the foreigners were not seen to be showing up at Treasury auctions.

I thought that there might have been an ulterior motivation. The jury is still out on whether the US will make good on the Agency debt. Certainly in the summer of '08 our gubbermint got a lot more explicit that it would make good. Regardless only a fool would rather hold one Treasury and one Agency vice two Treasuries. There is no ambiguity as to whether the US has to make good on the Treasuries. Whether it will or not.................

Will you kiss me?

I like to be kissed while someone is doing sex to me...

Do I look like Mrs Obama??????
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