Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

[c1ue]

http://finance.yahoo.com/news/Foreig...4&asset=&ccode=

Foreign demand for long-term U.S. financial assets rose in August even though China trimmed its holdings of Treasury securities.

Foreigners purchased $28.6 billion more in assets than they sold in August, according to Treasury data released Friday. That followed a net increase of $15.3 billion in July, and $90.2 billion in June.

The Treasury Department is auctioning record amounts of debt to cover a deficit estimated to have hit $1.41 trillion for the budget year that ended in September. Some economists worry that if overseas buyers don't keep buying U.S. debt, interest rates could rise. Inflation eats away at the purchasing power of a currency.

China trimmed its holdings by $3.4 billion to $797.1 billion in August, but still remained the largest foreign holder of Treasury securities.

Japan, the second largest foreign holder, boosted its Treasury securities to $731 billion, from $724.5 billion in July.

Another look at the raw data:

http://www.sifma.org/uploadedFiles/R...etIssuance.pdf

http://www.treas.gov/tic/mfh.txt

US Treasuries and Gross Issuance
		Bills			Coupons			Bills & Coupons
Month/Year	Gross Issues	Gross Retirement	Net	Gross Issues	Gross Retirement	Net	Gross Issues	Gross Retirement	Net	Foreign net purchases
2009
Jan	618.7	686.8	-68.1	16.7	6.8	-20.2	635.4	693.6	-88.3	-4.7
Feb	527.4	340.4	187	143.4	62.7	80.7	670.8	403.1	267.7	89.8
Mar	550.4	502.4	48	166.8	61.7	105.1	717.2	564.1	153.1	103.3
Apr	553.8	592.4	-39	172.7	38.8	133.9	726.5	631.2	94.9	-2.7
May	585.3	514.5	70.9	83.6	64.7	18.8	668.9	579.2	89.7	30.6
Jun	500.4	559.3	-58.9	277.2	59.5	217.7	777.6	618.8	158.8	89.5
Jul	685.4	671.4	14	192.1	36.9	155.2	877.5	708.3	169.2	45.3
Aug	657.4	509.4	148	198.9	94.8	104.1	856.3	604.2	252.1	21.4
numbers in billions

So in other words - foreigners bought less than 10% of the gross issuance in August 2009.

Compare with February where they bought over 33%.

[metalman]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

http://finance.yahoo.com/news/Foreig...4&asset=&ccode=



Another look at the raw data:

http://www.sifma.org/uploadedFiles/R...etIssuance.pdf

http://www.treas.gov/tic/mfh.txt



So in other words - foreigners bought less than 10% of the gross issuance in August 2009.

Compare with January where they bought over 33%.

itulip charted the foreign purchase data up to jul 09...



as you say, da bullhorn makes it sound like a steady uptrend in foreign purchases... not.

the only steady uptrend is issuance... $557 bil in aug. :eek:

[Down Under]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

So in other words - foreigners bought less than 10% of the gross issuance in August 2009.

Compare with February where they bought over 33%.

This is getting quite serious; surely, something has to give, and if this trend continues, I'd say within the next 6 months.

[cjppjc]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

This is getting quite serious; surely, something has to give, and if this trend continues, I'd say within the next 6 months.

Not to worry, you give these guys at the Fed and Treasury six months notice there is nothing they can't accomplish with taxpayer money.

[Diarmuid]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

Hi c1ue

Sorry for my ignorance once again here but these figures do not tally for me with the piece.

I would appreciate some help in understanding if you have the time

I see a month on month decrease of Net Foreign purchase from June to August from 89.5 to 21.4 and decrease of Foreign purchase as percentage of Net Bills and Coupons declining from 56% to 8.5%. they seem to be wholly unrelated to the data below in the article, I know I am probably missing something obvious - thanks

Foreigners purchased $28.6 billion more in assets than they sold in August, according to Treasury data released Friday. That followed a net increase of $15.3 billion in July, and $90.2 billion in June.

								Bills & Coupons
							Gross Issues	Gross Retirement	Net	Foreign net purchases
							635.4	693.6	-88.3	-4.7
							670.8	403.1	267.7	89.8
							717.2	564.1	153.1	103.3
							726.5	631.2	94.9	-2.7
							668.9	579.2	89.7	30.6
							777.6	618.8	158.8	89.5
							877.5	708.3	169.2	45.3
							856.3	604.2	252.1	21.4

[Slimprofits]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

Carib money laundering center purchases have gone down steadily since March...

It looks like Brazil and Ireland are slowly backing away.

On the other hand, Hong Kong picking up some of the slack.

[c1ue]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

Sorry for my ignorance once again here but these figures do not tally for me with the piece.

I would appreciate some help in understanding if you have the time

I see a month on month decrease of Net Foreign purchase from June to August from 89.5 to 21.4 and decrease of Foreign purchase as percentage of Net Bills and Coupons declining from 56% to 8.5%. they seem to be wholly unrelated to the data below in the article, I know I am probably missing something obvious - thanks

The Excel snapshot I posted shows the following categories:

1) Gross Treasury Bill issuance and retirement
2) Gross Treasury coupon issuance and retirement
3) Gross Treasury issuances (Bills & coupons)
4) Net foreign holdings change from previous month

The first 9 columns are from the first link (sifma.org) with the 9th column showing the Gross total issuance. Note that the Gross total issuance is the number we care about as it represent new overall Treasury supply.

The amount auctioned/issued is somewhat of a misnomer because there are always Treasuries maturing and thus being retired. Another way is for Treasuries to be bought back directly as happened with many/most of the 1985 16% 30 year coupons, but of course that hasn't happened in quite a long time.

In the case of short term Treasury bills, the issuance and retirement numbers can be highly different.

I included the detail to show how the short term Treasury bills behaving very differently than the longer term coupons.

The 10th column is derived from the 2nd link (treas.gov) and is the different month to month in total foreign treasury holdings. Note this number is derived from the sum total of ALL foreign holders thus including China, Japan, UK, as well as the ubiquitous Caribbean money centers.

The point is that there is a relationship between gross issuances and foreign ownership.

In more concise form:

Gross Net Issuance	Foreign net purchases	Foreign coverage of gross issuances
-88.3	-4.7	5.32%
267.7	89.8	33.55%
153.1	103.3	67.47%
94.9	-2.7	-2.85%
89.7	30.6	34.11%
158.8	89.5	56.36%
169.2	45.3	26.77%
252.1	21.4	8.49%
1097.2	372.5	YTD 2009
Delta	724.7

The point is we've just had the 2nd largest net issuance month of 2009 in August ($252.1B in Treasuries vs. $267.7B in February), and the foreign coverage of this issuance is only 8.49%.

This might be an anomaly - April was also a very low coverage month. But April only saw $97.6B not bought by foreigners while August saw $230.7B.

Or put another way: I've noted in other posts how the deficit spending of Obama is at the official pace of $3B/day with actual numbers being $5B/day or more.

Well, the amount of Treasuries issued in August which were not bought by foreigners was $7.7B/day out of $8.42B/day issued.

Total issuances not bought by foreigners YTD in 2009 is about $3B/day: $724.7B

Note half of this was actually bought by the Fed's $300B Treasury buying program.

Any day now I expect the new Fed Treasury buying program...as EJ and iTulip have also clearly forecast.

[ThePythonicCow]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

Not to worry, you give these guys at the Fed and Treasury six months notice there is nothing they can't accomplish with taxpayer money.

It's not taxpayer money. It's the Fed's money, monetizing our (the taxpayer) tax revenue, via Treasury debt.

Artist: Classic Country Song: Sixteen Tons - Tennessee Ernie Ford Album: Classic Country: 1950-1964

Some people say a man is made outta mud
A poor man's made outta muscle and blood
Muscle and blood and skin and bones
A mind that's a-weak and a back that's strong

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

[Diarmuid]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

The Excel snapshot I posted shows the following categories:

1) Gross Treasury Bill issuance and retirement
2) Gross Treasury coupon issuance and retirement
3) Gross Treasury issuances (Bills & coupons)
4) Net foreign holdings change from previous month

The first 9 columns are from the first link (sifma.org) with the 9th column showing the Gross total issuance. Note that the Gross total issuance is the number we care about as it represent new overall Treasury supply.

The amount auctioned/issued is somewhat of a misnomer because there are always Treasuries maturing and thus being retired. Another way is for Treasuries to be bought back directly as happened with many/most of the 1985 16% 30 year coupons, but of course that hasn't happened in quite a long time.

In the case of short term Treasury bills, the issuance and retirement numbers can be highly different.

I included the detail to show how the short term Treasury bills behaving very differently than the longer term coupons.

The 10th column is derived from the 2nd link (treas.gov) and is the different month to month in total foreign treasury holdings. Note this number is derived from the sum total of ALL foreign holders thus including China, Japan, UK, as well as the ubiquitous Caribbean money centers.

The point is that there is a relationship between gross issuances and foreign ownership.

In more concise form:



The point is we've just had the 2nd largest net issuance month of 2009 in August ($252.1B in Treasuries vs. $267.7B in February), and the foreign coverage of this issuance is only 8.49%.

This might be an anomaly - April was also a very low coverage month. But April only saw $97.6B not bought by foreigners while August saw $230.7B.

Or put another way: I've noted in other posts how the deficit spending of Obama is at the official pace of $3B/day with actual numbers being $5B/day or more.

Well, the amount of Treasuries issued in August which were not bought by foreigners was $7.7B/day out of $8.42B/day issued.

Total issuances not bought by foreigners YTD in 2009 is about $3B/day: $724.7B

Note half of this was actually bought by the Fed's $300B Treasury buying program.

Any day now I expect the new Fed Treasury buying program...as EJ and iTulip have also clearly forecast.

Thanks C1ue - much appreciated, although I had read as much myself in the spread sheet data, my confusion arose from

"Foreigners purchased $28.6 billion more in assets than they sold in August, according to Treasury data released Friday. That followed a net increase of $15.3 billion in July, and $90.2 billion in June.3"

The figures between the two (the article and the spread sheet) do not correlate - where are they coming from? I find the English non descriptive, extremely vague and hence meaningless. I realize this may well be due to my own stupidity or maybe intended by the author :p

Thanks Again

[santafe2]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

Another look at the raw data:

So in other words - foreigners bought less than 10% of the gross issuance in August 2009.

But Norway's got our back. I think we're good if they can keep this up for 2-3 more years....:rolleyes:

TFH.jpg

[c1ue]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

Thanks C1ue - much appreciated, although I had read as much myself in the spread sheet data, my confusion arose from

"Foreigners purchased $28.6 billion more in assets than they sold in August, according to Treasury data released Friday. That followed a net increase of $15.3 billion in July, and $90.2 billion in June.3"

Sorry, been dealing with Americans too long :eek:

I don't know where the Yahoo data came from. Mine came straight from the Treasury web site.

[Diarmuid]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

Sorry, been dealing with Americans too long :eek:

I don't know where the Yahoo data came from. Mine came straight from the Treasury web site.

Thanks C1ue - sets me wondering, have they moved from spin to just making it up as they go along

[icm63]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

LONG TBT (inverse of TLT)

[cjppjc]

Re: Gotta Love the Bullhorn: Foreign Demand Rises for long-term US assets

LONG TBT (inverse of TLT)

Tried that a few times with PST. No harm no foul. No real gains, no real losses. I'm with you on TBT. Sooner or later it will pay off.