Sep 08

Mystery Buyer Of US Treasurys Revealed (ZeroHedge, Sep 8, 2015):

While we already knew that China was selling – and following the record selling of FX reserves in August, so does everyone else – an even more interesting question emerged: who is buying? Thanks to the WSJ we now know the answer: “A little-known New York hedge fund run by a former Yale University math whiz has been buying tens of billions of dollars of U.S. Treasury debt at recent auctions, drawing attention from the Treasury Department and Wall Street.

But the biggest risk by far is that now that the “mystery buyers” has been exposed, it won’t take long for the other, much bigger players – i.e., all the central banks who have been desperate to push yields lower to “confirm” the self-fulfilling narrative that the economy, and inflation, are growing – to inflict the proverbial “max pain” upon Element. In fact, if Talpins is indeed very long TSYs, and has lot of leverage embedded in the trade, one may expect a concerted shorting effort to find out just how much leverage is incorporate in the trades, and push it to the point of breaking. After all, hedge funds exposed with massive positions rarely survive an onslaught by their peers who seek to do just that – inflict “max pain” (see Ackman and Herbalife).

If so, China’s selling of TSYs may very soon inflict precisely the kind of damage on US paper not because it is selling, but because the biggest “mystery” buyer of US paper has just been revealed and whose continued ability to keep buying unimpeded is now suddenly very much in question.

What’s worse, if the result of a coordinated attack on Talpins leads to an LTCM-type blow up, hang on to your hats because the recent volatility in the equity market will be nothing compared to what is coming to the MOVE, TYVIX and US Treasurys…

Tags: , , ,

One Response to “Mystery Buyer Of US Treasurys Revealed”

  1. Marilyn Gjerdrum Says:

    I wonder……Players are going to do any and everything they can to profit off this new information…….The growth of the US stock market since 2001 has coincided with the elimination of millions of jobs…….Until NAFTA, corporations paid workers good wages which reflected well in the community where they lived. A top good employees in all departments were treated well. good workers and skills were essential to growth.
    After NAFTA came the huge exodus of good jobs going overseas, and millions upon millions lost their jobs and careers. For every good job lost, seven more are put at risk…..

    Corporations were able to shave the 60% of human resources costs from their expense sheets. As they laid off thousands, they were able to cut millions….All of those job eliminations (went to slaves overseas) savings were shown as profit………thus the big show of profits since the Crash of 2001-03…..and many of those losses were hidden in a real estate bubble….which exploded in 2008-09. The job losses and resulting contraction in the consumer based economy has resulted in an incredible depression for the entire western civilization.

    Foolishly the west looked to China to pull us out of this endless economic malaise we have suffered since. Our fool government blares the endless “recovery” nonstop since 2009……….79% of Americans no longer believe anything government says……too many lies. A very few get richer while the rest slowly sink into the abyss……

    I am fortunate, I will soon be out of it thanks to an incurable illness that will soon take my life……..I am so sorry to see the mess we are leaving behind….America slept too long, and now, it is too late…..the entire western economy is breaking apart.

    The irony isn’t the fact that China built its economy on lies…….They are changing the rules of the economic game……The west won’t like it one bit. They have all our technology thanks to greedy corporations……They are going to be a real problem.

Leave a Reply