The Fed’s own holdings of MBS shrank $8.357 billion and foreign central banks’ holdings of MBS fell a similar amount, which wouldn’t be surprising if most of the latter turns out to have been attributed to the “foreign” bits of the NY Fed (Where’s Ron Paul’s audit when we need it? ) Meanwhile, you’ll now have to go back seventeen weeks, all the way to when IAEA was still giving Fukushima updates, to see a similar level of foreign central bank holdings of Treasury Debt. Whether it’s Japan’s 3/11 struggles, the eurozone crisis or Chinese rebalancing the cenbanks’ redemption of dollar-denominated assets is clearly gaining momentum.

This week’s Reuters report¹ is, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.² Here is Doom’s updated CSV version³ of the agencies and treasuries foreign central bank holdings data set.

The trajectory of the yellow line now clearly indicates a top has been passed.

Treasury Debt holdings continued their losing streak, falling at a record rate of $25.255 billion.

Agencies also got crushed, shrinking by a large $8.900 billion.  Twist has resized the scale to show the relation between these amounts and the treasuries chart.

*Agen-FM: The dotted line is the foreign central banks’ Agency Debt holdings reduced by the level of the Fed’s own MBS holdings. Since the FRBNY itself is a lightly audited peculiar amalgam of foreign & domestic, central and private bank I think it might be useful to consider the hypothesis that for a while starting in January 2009 the Fed’s MBS holdings were being quietly deemed to be “foreign.” That is, for the first half of ’09 the dotted line seems more sensible than the red one.

The net of US obligations plunged $34.155 billion.

Twist’s ratio graphs at least were fairly quiet.

The Setzer agencies number went down strongly and the treasuries number was positively crushed, capturing the dramatic deterioration in cenbank uptake compared to a year ago.

________________________

Notes and References

[1]: “Foreign central banks’ US debt holdings fall – Fed”, by Nick Olivari, Reuters, September 29, 2011.

[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 (includes Fed’s own MBS holdings).

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