Saturday, September 16, 2006

More Intentional Misdirection

You have read numerous posts on this blog relating to how our government manipulates economic data – in order to ‘spin’ the data to show more positive trends. We’re now seeing the same thing with U.S. Treasury auctions.

In the article below by Karl Denninger – you’ll notice that the U.S. Treasury made a significant change in the way it accounts for indirect Treasury Bond bids on June 1st, 2009. Until June 1st, foreign purchases of Treasury bonds were classified as indirect bids – so that investors could accurately evaluate foreign demand. Since the U.S. depends heavily on foreign purchases of Treasury bonds – it’s easy to see that this is an important metric for Treasury bond investors.

Now – additional types of buyers are classified as indirect bids – making it impossible to evaluate if foreign demand for Treasurys is declining. Based on the deceptive way in which this change was made (no mainstream media articles that I can find) – I’m guessing that his change was made because foreign purchases are declining rapidly.

Once again – we see our leaders using deceptive means to disguise the truth of what is happening.

jg – July 5, 2009

More Intentional Misdirection

Thursday, June 25. 2009

Posted by Karl Denninger in Bonds at 08:38

About a week ago I wrote a Ticker about my astonishment that foreign central banks would want 50% of a 30 year Treasury issue, and mused that these foreigners must be expecting (and might be intending to impose) crushing deflation.

It turns out that my skepticism was well-warranted, for a different reason:

But in a little-noticed switch on June 1, the Treasury changed the way it accounts for indirect bids, putting more buyers under that umbrella and boosting the portion of recent Treasury sales that the market perceived were being bought by foreigners.

The new definitions are deep in the arcane world of Treasury auctions. The change involves buyers who place orders through primary dealers. Those had been counted as direct buyers, but as of June 1 they were classified as indirect buyers, making that group larger than before.

Because investors view that group as being dominated by foreign buyers, they assumed foreign demand was higher.

Very nice.

So now we have the Treasury Department changing the rules so that the investing public cannot determine what sort of actual appetite foreigners have for our Treasury Debt by obscuring what had, up until then, been a very reliable gauge of their sentiment.

This sort of intentional game-playing is obscene and pervasive in our financial system and government over the last twenty years, with this being just the latest insult.

Treasury, of course, knows the interest level of foreigners in our government debt.

Why are they suddenly afraid of letting every market participant see the same information?

Do we have a "little problem" here that someone doesn't want to talk about?

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