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Fed Coy As Panic Boosts Treasuries – Professional Edition

The mortgage applications data released on Tuesday continues to cast doubt on the NARs data showing a recovery or stabilization in the housing market. I don’t question their data, but the MBAAs data and Zillow’s data do not support it. See https://wallstreetexaminer.com/2009/09/01/more-little-lies-and-big-spin-gains-or-blips

The Treasury completed 3 bill auctions this week with buying at panic levels, including some of the highest bid/covers I have ever seen. Indirect bidding strengthened. The FCBs are apparently back in the game, at least for a little while. One of the things that we’ve always known is that there’s nothing like a little stock market selloff to get the fear juices going to send a tidal wave of cash into Treasuries.

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1 Comment

  1. Lee Adler

    No sooner did I post this than the Fed announced its tentative schedule for the next 2 weeks. http://www.ny.frb.org/markets/operation_schedule.html

    So it looks like they will do just one next week, then 2 the following week when the $54 billion in new notes and bonds settle. That should exhaust the $300 billion. The question becomes what happens after the 15th. They said they would extend until 10/31, so that means they either won’t, or they’ll overshoot. Stay tuned.

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