luvwulfs : CNN reporting 7,000 US companies have lost $1.2 billion in last 3 years due to hackers. Be careful folks
EF: Well the market ended in red just like we suspected look for Sunday night on Forex and other interesting thing next week should be a wild and bumpy ride
Isa52bc: 100% of all RV's since 1985 have occurred in April or September
Red: If it walks like a duck if it quacks like a duck if it is shaped like a duck folks I think it is a duck, we have a duck on our hand folks
Sarek: I think it is super huge that Tony shared about not making any travel plans right now....I think that's the first time I've ever heard him recommend that
Mangelo: serek that's true, I never heard him say that before....so that is diffidently a great sign that this is going to happen this week....
1DesertRat: Super huge!!...I'm listening to the call now....in past when anyone has asked tony about traveling....he has responded in a variety of ways based on the timeline....but never advised not to travel, but rather stay in close...whereby you could be back in a few days....this is the first time I've heard him essentially say...stay put, another words
ManinC56: ***Bank and Math up date...2 in one crazy Bank story...Houston
So I have gotten a few friends to understand enough to listen to Tony and realize our dream...one was at WF in Houston 2 weeks ago (don't ask I can't say) he went in to purchase some Rupiah on my suggestion to get plan "B" revved up... asking the tell to purchase 10,000,000 she said that will be $170,000 US....he about crapped his pants... he excused him self and got on the phone...
''Holy Moly it's happening....''Go back in...you have a note in your wallet like I told you to carry!" sadly NO and of course by the time returned...the rate had changed.
I did not post it then but will now because the other friend...spoke to WM at the same Bank last week about the rates that day...the WM went in and checked the log... he has never given them more than 5 minutes...they are meeting him for lunch tomorrow out side the Bank...I will up date tomorrow afternoon...
WF and the number 2 WM in their system...he met them...off Bank property...acknowledged the RV and Currency reset...spoke of different plans to help them with their goals...and BOUGHT THEIR LUNCH...gave them his personal cell and permission to call at any hour....
Pat: It's Official: China Confirms It Has Begun Liquidating Treasuries, Warns Washington
It's Official: China Confirms It Has Begun Liquidating Treasuries, Warns Washington / Submitted by Tyler Durden on 08/27/2015 23:27 -0400
On Tuesday evening,we asked what would happen if emerging markets joined China in dumping US Treasurys. For months we’ve documented the PBoC’s liquidation of its vast stack of US paper. Back in July for instance, we noted that China had dumped a record $143 billion in US Treasurys in three months via Belgium, leaviing Goldman for once.
We followed all of this up this week by noting that thanks to the new FX regime (which, in theory anyway, should have required less intervention), China has likely sold somewhere on the order of $100 billion in US Treasurys in the past two weeks alone in open FX ops to steady the yuan. Put simply, as part of China's devaluation and subsequent attempts to contain said devaluation, China has been purging an epic amount of Treasurys.
But even as the cat was out of the bag for Zero Hedge readers and even as, to mix colorful escape metaphors, the genie has been out of the bottle since mid-August for China which, thanks to a steadfast refusal to just float the yuan and be done with it, will have to continue selling USTs by the hundreds of billions, the world at large was slow to wake up to what China’s FX interventions actually implied until Wednesday when two things happened: i) Bloomberg, citing fixed income desks in New York, noted "substantial selling pressure" in long-term USTs emanating from somebody in the "Far East", and ii) Bill Gross asked, in a tweet, if China was selling Treasurys.
Sure enough, on Thursday we got confirmation of what we’ve been detailing exhaustively for months. Here’s Bloomberg:
China has cut its holdings of U.S. Treasuries this month to raise dollars needed to support the yuan in the wake of a shock devaluation two weeks ago, according to people familiar with the matter.
Channels for such transactions include China selling directly, as well as through agents in Belgium and Switzerland, said one of the people, who declined to be identified as the information isn’t public. China has communicated with U.S. authorities about the sales, said another person. They didn’t reveal the size of the disposals.
The latest available Treasury data and estimates by strategists suggest that China controls $1.48 trillion of U.S. government debt, according to data compiled by Bloomberg. That includes about $200 billion held through Belgium, which Nomura Holdings Inc. says is home to Chinese custodial accounts.
(go to link to see chart)
The PBOC has sold at least $106 billion of reserve assets in the last two weeks, including Treasuries, according to an estimate from Societe Generale SA. The figure was based on the bank’s calculation of how much liquidity will be added to China’s financial system through Tuesday’s reduction of interest rates and lenders’ reserve-requirement ratios. The assumption is that the central bank aims to replenish the funds it drained when it bought yuan to stabilize the currency.
Now that what has been glaringly obvious for at least six months has been given the official mainstream stamp of fact-based approval, the all-clear has been given for rampant speculation on what exactly this means for US monetary policy. Here’s Bloomberg again:
China selling Treasuries is “not a surprise, but possibly something which people haven’t fully priced in,” said Owen Callan, a Dublin-based fixed-income strategist at Cantor Fitzgerald LP. “It would change the outlook on Treasuries quite a bit if you started to price in a fairly large liquidation of their reserves over the next six months or so as they manage the yuan to whatever level they have in mind.”
“By selling Treasuries to defend the renminbi, they’re preventing Treasury yields from going lower despite the fact that we’ve seen a sharp drop in the stock market,” David Woo, head of global rates and currencies research at Bank of America Corp., said on Bloomberg Television on Wednesday. “China has a direct impact on global markets through U.S. rates.”
As we discussed on Wednesday evening, we do, thanks to a review of the extant academic literature undertaken by Citi, have an idea of what foreign FX reserve liquidation means for USTs. "Suppose EM and developing countries, which hold $5491 bn in reserves, reduce holdings by 10% over one year - this amounts to 3.07% of US GDP and means 10yr Treasury yields rates rise by a mammoth 108bp ," Citi said, in a note dated earlier this week.
In other words, for every $500 billion in liquidated Chinese FX reserves, there's an attendant 108bps worth of upward pressure on the 10Y. Bear in mind here that thanks to the threat of a looming Fed rate hike and a litany of other factors including plunging commodity prices and idiosyncratic political risks, EM currencies are in free fall which means that it's not just China that's in the process of liquidating USD assets.
The clear takeaway is that there's a substantial amount of upward pressure building for UST yields and that is a decisively undesirable situation for the Fed to find itself in going into September. On Wednesday we summed the situation up as follows: "one of the catalysts for the EM outflows is the looming Fed hike which, when taken together with the above, means that if the FOMC raises rates, they will almost surely accelerate the pressure on EM, triggering further FX reserve drawdowns (i.e. UST dumping), resulting in substantial upward pressure on yields and prompting an immediate policy reversal and perhaps even QE4."
Well now that China's UST liquidation frenzy has reached a pace where it could no longer be swept under the rug and/or played down as inconsequential, and now that Bill Dudley has officially opened the door for "additional quantitative easing", it would appear that the only way to prevent China and EM UST liquidation from, as Citi puts it, "choking off the US housing market," and exerting a kind of forced tightening via the UST transmission channel, will be for the FOMC to usher in QE4.
BGG “...the reforms launched by Prime Minister Haider al-Abadi, on Friday, is a big step and real achievement for him...”
Reforms launched by al-Abadi today a clear signal of the seriousness of reforms...the reforms are real and MOVING.
tman23 FIRST and FOREMOST...Need the Fed Court Law...We should be seeing soon.
Medhat al-Mahmoud the courts Cheif Justice...AND... Ismail Moshen (aka Ali Alak) the CBI Governor being replaced...
The Party Law that just passed will put into super sonic gear the rest of the reforms.