Doomer V, who sent it along, thinks that this has a most fragrant odor to it. We’re not sure what it means that yesterday the Fed started loaning out agencies, but given that the cenbank Agency Debt holdings number we’ve been following here turned into custard 6 months ago it’s highly likely some further mischief is afoot. Meanwhile, the rather quaint post- 9/18 ’08 spectacle of early 1930s Soviet-style central planning by committees of Wall Street financial lobbyists is proceeding as usual. Twist sends this announcement of FHFA’s first Five Year Plan (PDF). This story arc would be funnier if there wasn’t such a potential for ordinary people getting badly harmed.
Clearly there are some real reporters working for the service, so why does the weekly Reuters report [1] that we’ve been following here have to read like the sports scores? Although if, as in this case, the numbers were the equivalent of Bulls 14, Lakers 12 and even the sleepiest of late-night TV sports reporters might be forgiven for at least raising an eyebrow. The report was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.[2] Here is Doom’s updated CSV version of the agencies and treasuries foreign central bank holdings data set.[3]
The weekly change in net foreign central bank holdings of Treasury Debt crashed from a 3rd highest figure ever last week to a small dump of $0.892 billion. Meanwhile, the slow leak of agencies continued. Cenbanks sold a net $2.001 billion last week.
Obviously the lines in the raw numbers graph barely moved. However, a visible trend down is starting to develop in agencies, even if it hasn’t yet broken through the bottom of the Tube of Bogosity.
Twist’s ratios graphs went precisely sideways, of course.
Not much action in Setser’s 52-week change graph. We’re just a year since the Lehman analyst’s report that destroyed the market’s faith in agencies, so the red line here is scheduled to rebound up in the near future.
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Notes and References
[1]: "Foreign c.banks’ US Treasury holdings down in week – Fed", by Burton Frierson, Reuters, July 9, 2009.
[2]: "H.4.1 Factors Affecting Reserve Balances", Federal Reserve Statistical Release (weekly), Federal Reserve Bank of New York.
[3]: The updated data set as a Comma Separated Value (CSV) file is here.
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