Ever wonder how the Fed does it?

[jschurchin]

It's something called "Household Sector". And it is FRAUD. We are so fucked.

To our surprise, the only group to actually substantially increase their purchases in 2009 is defined in the Federal Reserve Flow of Funds Report as the "Household Sector". This category of buyers bought $15 billion worth of treasuries in 2008, but by Q3 2009 had purchased a whopping $528.7 billion worth. At the end of Q3 this Household Sector category now owns more treasuries than the Federal Reserve itself.

The rest here: http://www.industrymailout.com/Industry/View.aspx?id=182081&q=173576285&qz=d2a48f

We are so FUCKED.

[Zynx]

1. That is a very volatile data set.

Part of the reason is that in that group is included domestically based hedge funds. They have been playing Treasuries all year as both dollar plays as well as repositories for safe money. Also, households have been huge net accumulators of bond funds throughout the year, so there is that factor too. One other thing to look at is the huge net drop in holdings of agency and GSE securities. My guess is that mutual funds that had invested in those have changed to treasuries. These changes would be reflected in the household sector balance sheet as well.

http://federalreserve.gov/releases/z1/Current/z1.pdf

Look at page 111 of the pdf. Holdings are about $250 billion above where they were in the mid-2000s. Hardly unreasonable given everything that has gone on. Before shouting conspiracy, look at the data and think about everything that has gone on.

[clear eye]

2. Article said that mutuals was a different sector -

bond funds and other mutuals can not be a factor.

OPer is not "shouting conspiracy" (and that language is a lame attempt to discredit the messenger w/o having to disprove the message), the article cited says that the Fed is buying Treasuries w/ money it's printing to prevent their collapse.

Disbelieve at your own risk.

I, for one, thank jschurchin for making an excellent catch and informing DU.

[Statistical]

4. Hedge fund is not a mutual fund.

They are considered private money and thus part of "household" purchases.

[clear eye]

5. You wrote "bond fund" & "mutual funds" as well as "hedge fund".

Check your post.

[Statistical]

6. Well *I* didn't write bond fund seeing as I didn't write the post.

I am just telling you hedge funds (which can consists of bond funds, option funds, equity funds, commodity funds, etc) are treated differently than mutual funds (which consist of bond, option, equity, commoidity, treasury, etc funds).

Hedge funds are private money and not subject to public disclosures that mutual funds are.

This hedge funds (regardless of type) are private money.

[clear eye]

7. You're not telling me anything I didn't know.

There was no need to "correct" me, as you would have seen if you'd read my post and the post I responded to carefully.

[jschurchin]

8. Zynx. I am not saying anything about a conspiracy,

What I am saying is really a question. Who is funding our spending spree?
For years it was foreign governments and central banks. They would buy our debt, and that enabled us to spend like drunken sailors on shore leave. Well they are no longer buying our debt, as they see us as being a risky play. On top of that, our coupons are paying shit. They can get the same return stuffing their money in a mattress, without the risk of default.

Explain to me who in their right mind would buy U.S. treasury's right now? Would you? I won't. And it's not because I don't believe in and love my country. It's because, in a 5 year coupon, I can do 200 basis points better in a annuity than I can in treasury's.

You claim it's hedge fund's. If you were running a hedge fund, would you buy into these yields?

1 Month .04%
3 Month .17%
12 Month .40%

Yeah, I know. Neither would I.

[clear eye]

3. Thanks. We better start taxing the wealthy for real, SOON.

Added on edit: They got us in this pickle, and they darn well better be made to play a part in getting us out of it.