On the Treasury front, this week’s paydowns will be only $13 billion, and next week the Treasury will swing to a huge negative as it dumps mass quantities of new supplies of 3, 5 and 7 year notes on the market. It will not be pretty and it will only get worse for the next 6 weeks. That may be why the Treasury market has again sold off in spite of another round of Fed direct purchases totaling $7 billion today. The Fed has one more buy scheduled for Thursday in the Treasury market. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.
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From the 3rd last paragraph of Chris Whalen’s report this past Friday. The implications are directly relevant to your work.
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
” Foreign bond holders, like the government of China, have reportedly told the Obama Administration that further losses to debt holders of US banks will result in a boycott of US Treasury auctions.”