Monday, March 16, 2009

The Debts of the Spenders: January 2009 TIC Data - A Complete 180

What a massacre. How could the treasury get it so wrong?

From a projection of NET +44 BILLION vs. a reality of -43 BILLION. That is a complete 180.

After reviewing the TIC data, it looks like China sold SOME treasuries. But the biggest sellers were in Europe and the Caribbean.

Total Europe -11,706
Total Caribbean -23,623
China, Mainland -3,450
Japan 6,056
Brazil 7,844
Mexico 1,099

These are just some highlights. For the complete data:

No wonder the Chinese were so angry last week. They were afraid of becoming bagholders.

Unsurprisingly, the Japanese continue to demonstrate their colonial mentality by blindly buying US bonds. The same goes for Mexico and Brazil. All 3 nations have strong trade ties to the US and faced large stock market routs earlier in the year.

As for the massive dumping in the Caribbean and Europe, I can only attribute that to hedgie payout redemptions and/or hedgies that got caught on the WRONG side of the trade (e.g. net short in the 1st half of the month and then net long in the latter half after European banks collapsed under the FTSE short ban expiration catalyst in the mid-month).


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