A Big Clumsy Player

Clumsy (def)- lacking dexterity, nimbleness, tact, subtlety and/or grace.

The latest stats show a 69B decline in Treasury holdings a new monthly record. The prior record was from Sept. at 56B. The Fed also sold 52.6B of short end securities. Primary Dealer's 3 year and under holdings, usually pulled low at year end, were a record 48B. The Central Bank now owns over 60% of more than a half dozen issues.

The nagging question, there's a plenty of debt, is there any liquidity? More importantly, is there any real benefit of a transfer mechanism for foreign central banks facilitated through the dealer community? What is the purpose of the awkward information in the minutes yesterday in this context? There is no possibility of exit and the "held to maturity" date is being extended. Interest rate decline was the key benefit to bond buyers last year, an impossible do over from here. This is an ugly accident waiting to happen.

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