NASDAQ.com: Something Very Strange is Happening with Treasuries
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Ian Shlasko wrote:
One occurrence doesn't make a trend... If this repeats, well, it'll be something to watch out for.
Yes, highly agreed on this point, so I do hope that this is just an abberation and an exaggeration on my part. I would love to be shown that I was wrong, and I'll be praying for it.
Ian Shlasko wrote:
Again, the majority of the buyers are PRIMARY DEALERS. They're the ones setting the absurdly-low rate. Primary dealers are non-Fed banks and broker-dealers (list[^]). The "indirect" ones are usually foreign buyers, but could potentially be the Fed "sneaking" some bids in.
From what I remember, primary dealers actually take stock in the Federal Reserve system, correct? Therefore, they have interest in the status quo as well, therefore they have a vested interest to set their yield at 0% if the situation calls for it. So I don't see any difference in what I said, though I should have been more specific.
josda1000 wrote:
From what I remember, primary dealers actually take stock in the Federal Reserve system, correct?
No, the regional Federal Reserve banks are obligated to buy stock in the Fed system. The Primary Dealers are only obligated to "participate" in auctions... As in, they have to buy T-Bonds. This can't be because of reluctance, though, because they're taking LOW yields, not demanding higher ones. It's like offering $100,000 for a used Toyota with a busted accelerator :) If these were 10 or 30-year bonds, I'd be a little more concerned... But this is short-term paper.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of Guardians of Xen (Sci-Fi/Fantasy novel) -
josda1000 wrote:
From what I remember, primary dealers actually take stock in the Federal Reserve system, correct?
No, the regional Federal Reserve banks are obligated to buy stock in the Fed system. The Primary Dealers are only obligated to "participate" in auctions... As in, they have to buy T-Bonds. This can't be because of reluctance, though, because they're taking LOW yields, not demanding higher ones. It's like offering $100,000 for a used Toyota with a busted accelerator :) If these were 10 or 30-year bonds, I'd be a little more concerned... But this is short-term paper.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of Guardians of Xen (Sci-Fi/Fantasy novel)Ian Shlasko wrote:
If these were 10 or 30-year bonds, I'd be a little more concerned... But this is short-term paper.
Agreed, but like you said, if this kind of trend continues, I'm going to start worrying.
Ian Shlasko wrote:
No, the regional Federal Reserve banks are obligated to buy stock in the Fed system.
Thanks for the clarification.
Ian Shlasko wrote:
As in, they have to buy T-Bonds. This can't be because of reluctance, though, because they're taking LOW yields, not demanding higher ones.
That's where my whole main argument comes from, though. They're definitely not being reluctant. Most people with any common sense would ask for at least some kind of profit off of the loan/buying mechanism. I myself would ask for 5 percent if I were to do some kind of trade like that. So this is just where my basis for "the Fed's playing the game" comes from. But yeah, there's always hope. Meaning, hopefully this is just a one time thing.
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[punches air] YES. I am DARK TRIAD. Fear me !!!!! Why triad ? Why not diad, or parallelogram ?
Christian Graus Driven to the arms of OSX by Vista. Read my blog to find out how I've worked around bugs in Microsoft tools and frameworks.
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JHizzle wrote:
...Really?
What do you mean? Are you referring to my website? It will be completed by spring.
Watch the Fall of the Republic (High Quality 2:24:19)[^] Sons Of Liberty - Free Album (They sound very much like Metallica, great lyrics too)[^]
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Yeah, it was a long and involved reboot cycle... Involved lots of... well... Picture yourself in a boat on a river, with tangerine hills and marmalade skies... I kid, I kid... I don't shoot up on LSD before bed... Or do you shoot that up or snort it? I don't even know... But given the kind of dreams I usually have, you might think I do...
Proud to have finally moved to the A-Ark. Which one are you in?
Author of Guardians of Xen (Sci-Fi/Fantasy novel)You swallow it or absorb it thorugh your skin. Common doses are in microgram quantities (less than a milligram). One milligram will send you to the edge of the universe. Never tried it myself.
Watch the Fall of the Republic (High Quality 2:24:19)[^] Sons Of Liberty - Free Album (They sound very much like Metallica, great lyrics too)[^]
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thats a very specific little known reference, it is as if someone has mentioned it to css, maybe some professional? maybe hes doing a bit of transference here, applying his own issues on others?
Smile and the world smiles withyou, laugh and they think you are a nutter
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Ian Shlasko wrote:
If these were 10 or 30-year bonds, I'd be a little more concerned... But this is short-term paper.
Agreed, but like you said, if this kind of trend continues, I'm going to start worrying.
Ian Shlasko wrote:
No, the regional Federal Reserve banks are obligated to buy stock in the Fed system.
Thanks for the clarification.
Ian Shlasko wrote:
As in, they have to buy T-Bonds. This can't be because of reluctance, though, because they're taking LOW yields, not demanding higher ones.
That's where my whole main argument comes from, though. They're definitely not being reluctant. Most people with any common sense would ask for at least some kind of profit off of the loan/buying mechanism. I myself would ask for 5 percent if I were to do some kind of trade like that. So this is just where my basis for "the Fed's playing the game" comes from. But yeah, there's always hope. Meaning, hopefully this is just a one time thing.
josda1000 wrote:
Agreed, but like you said, if this kind of trend continues, I'm going to start worrying.
Yep.
josda1000 wrote:
That's where my whole main argument comes from, though. They're definitely not being reluctant. Most people with any common sense would ask for at least some kind of profit off of the loan/buying mechanism. I myself would ask for 5 percent if I were to do some kind of trade like that. So this is just where my basis for "the Fed's playing the game" comes from.
Agreed... It's kind of odd that the broker-dealers are doing that. I can think of plenty of potential reasons, but none of them really add up... There might be some back-room dealing going on, or maybe they're expecting a market collapse in the next four weeks (Zero gains is better than non-zero losses)... Whatever the case, we don't have enough information to determine their motivation.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of Guardians of Xen (Sci-Fi/Fantasy novel) -
Josh Gray wrote:
When do you expect this to happen?
Personally I'd say two years, but it is a prediction.
Josh Gray wrote:
it wont happen, and in three months when I ask you why it didn't happen you will point to another article, video, book or blog as new proof it's about to happen.
I'm not trying to necessarily prove it'll happen, it's a prediction. One with much historical backing, and Austrian economic thought.
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Josh Gray wrote:
What's Austrian economic thought?
Never heard of Mises and his 10 commandments?
Bob Emmett @ Ynys Thanatos
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Christian Graus wrote:
watching conspiracy videos on the web all day is not going to get you a job.
It didn't prevent me from getting one, either. Definitely not a cause/effect type of relationship.
Well, CSS spends ALL day, literally. Which doesn't leave time for self improvement. Sure, if you know to keep your left of centre views to yourself, and you present well in an interview, there's no cause/effect there.
Christian Graus Driven to the arms of OSX by Vista. Read my blog to find out how I've worked around bugs in Microsoft tools and frameworks.