Bulletin! Treasury Paying Down $55 BILLION RIGHT NOW to AVERT CATASTROPHE!

This is big.

In a panic over the surge in the 10 year Treasury yield and the attendant fall in Treasury note and bond prices, the US Treasury announced today that it would pay down $55 billion in outstanding T-bills.

The funds will settle a week from today, on February 23.

This is cash that will go directly into the accounts of the dealers, banks, and investors who hold the expiring paper. The paydown of the expiring paper will simultaneously create a shortage of paper in which to reinvest cash.

The Treasury’s goal is to force the former holders of the short term bills to reinvest the cash further out on the yield curve in order to stem the rise in yields and the fall in bond prices.

The declining bond prices are crushing the leveraged portfolios of Primary Dealers, with the resulting collateral calls. There’s an imminent threat of contagion into stocks, and ultimately a systemic crash, within the next few days if the plunge in bond prices is not reversed.

I have been warning about this approaching catastrophe for months. It now appears to be upon us.

See these reports for more details, as well as strategy viewpoints.

Free Report – Proof of How QE Works – Fed to Primary Dealers, to Markets, To Money

Liquidity Trader Subscriber Reports –

Primary Dealers are Already Dead – Free Summary

Primary Dealers are Dead – Part 2 – Springtime Coming for Hibernating Bears – Free Summary

KNOW WHAT’S HAPPENING NOW, before the Street does, read Lee Adler’s Liquidity Trader risk free for 90 days!

Act on real-time reality!

Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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