From my post at Doom North HQ I can just hear the faint sound of fireworks celebrating D250.
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September Madness
A big hat tip to my sister-in-law for sending me this "September Madness" chart. I think it describes the situation beautifully. [Even though the author, not my sister-in-law, spells 'Barclays' with a "K".] The image is larger than I usually like to display- my apologies if it doesn’t work with your monitor, but it was unreadable when I tried to shrink it. If you can’t read it, click here.
Foreign Central Banks Smash Weekly Treasuries Buy Record
Anyone get the number of that truck? Foreign central banks were net buyers of agency debt for the third time in ten weeks,[1] adding a healthy $2.51 billion to their holdings. But in a record-shattering acquisition, they bought an astonishing $43.93 billion of treasuries. This news comes from FRBNY’s weekly statistical release H.4.1 [2] and Doom has again added the last week’s data to our CSV file going back to early 2000.[3]
Many thanks to Twist who has worked her usual magic creating additional figures to help show the significance of this week’s move.
Let’s put this into some sort of perspective. Here’s a bar graph covering the last few weeks of net foreign central bank purchase (or sale) of treasury debt. Note the enormous jump representing the most recent week (9/25 to 10/1 2008). That’s the biggest net purchase we’ve ever seen, and the second bar from the left (week ended 8/6 2008) is the second biggest ever!
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And here’s the chart of the "top ten" all time high volume week-to-week buy / sell moves for our data set going back to February 2000 (date is the last day of the seven day period covered).
Even though central banks added to their agencies holdings for the third straight week, the gigantic purchase of treasuries has the agencies / treasuries ratio continuing to decline.
This actually accelerates the trend significantly.
