The Economic Populist - Speak Your Mind 2 Cents at a Time Mon 2009-09-21 14:33 EDT

Fed accounts for 50% of treasury purchases

There once was a time when the Federal Reserve abhorred the idea of monetizing debt. That day is long over. In the second quarter, the most recent for which data is available, the Fed bought $164 billion out of the $339 billion in net new Treasurys sold. In the mortgage-backed debt markets, the Fed has been buying upward of 80% of the bonds issued by agencies such as Freddie Mac and Fannie Mae. ZeroHedge helps to put this number into perspective: the Fed was a greater factor in UST demand than all three traditional players combined: Foreigners, Households and Primary Dealers, which amounted to a $158 billion in net Q2 purchases.

50; economic populist; Fed Accountable; Mind 2 Cents; speaking; Time; Treasury purchases.

Bruce Krasting Fri 2009-09-04 19:39 EDT

On Fed Intervention and the Blogs

Bruce Krasting

A week ago a great debate was stirred in the financial blog world. As is often the case Zero Hedge was in the middle of the fracas. Mr. Durden penned a piece that suggested that the Fed was manipulating the auctions in such a way as to benefit the primary dealers. It got to be a very sophisticated discussion that brought in some thinking from Yves Smith at Naked Capitalism and John Jansen at Across the Curve. The debate is over is far as I am concerned. The Treasury had another successful auction today of the 30 year. But in order to make it a success the Fed bought $27 billion of 15-30 year mortgage paper. The curve is the curve...This is timed intervention. That is a polite way to say manipulation. Federal Reserve manipulating Treasury auctions; quantitative easing.

Blog; Bruce Krasting; Fed intervention.