"Lending" a Helping Hand

Discussion in 'Economy' started by gonegolfin, Aug 4, 2009.

  1. gonegolfin
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    gonegolfin Member

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    The results for the Fed scheduled purchase of 8/5/09 are in. $7.248 billion of treasuries maturing between 12/31/2013 and 4/30/2016 were purchased. What is interesting is that the largest purchases made were of securities recently auctioned.

    The below constitutes the largest securities purchases in this operation ...

    - $4.14 billion of the 5-year Notes (CUSIP 912828KV1) maturing on 5/31/14 were purchased. These Notes were issued by the Treasury on 6/1/09.

    - 1.669 billion of the 5-year Notes (CUSIP 912828KN9) maturing on 4/30/14 were purchased. These Notes were issued by the Treasury on 4/30/09.

    - 879 million of the 7-year Notes (CUSIP 912828DV9) maturing on 5/15/15 were purchased. These Notes were issued by the Treasury on 10/15/08.

    - 206 million of the 5-year Notes (CUSIP 912828LC2) maturing on 7/31/14 were purchased. These Notes were auctioned last week and issued by the Treasury on 7/31/09.

    Tomorrow, purchases of treasuries maturing between 5/15/16 and 5/15/19 will be made. It will be interesting to see if some of these purchases are from the 7-year Treasury auction that took place last Thursday (which went so well). If they are not from last Thursday, they will likely be from the May or June 7-year auctions.

    There will probably be some purchases of 10-year and maybe 30-year treasuries as well. $23 billion of 10-year Notes will be auctioned on 8/12 and $15 billion of 30-year Bonds on 8/13. They may attempt to soften up that auction.

    Brian
     
  3. gonegolfin
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    As expected, the $7.0 billion in treasury purchases by the Fed this morning did include the 7-year Treasury Notes auctioned by the Treasury last Thursday. The amount was significant in that $4.753 billion of the 7-year Treasury Notes auctioned last Thursday and issued on Friday were snapped up by the Federal Reserve this morning. Again, there is no surprise that these auctions are going well when the Fed is snapping up substantial amounts of these offerings in close proximity to the auctions. The Fed has now purchased $243.518 billion in treasuries since the purchase program commenced on 3/25/09. However, experts feel that the Fed will remove this prop in September when it does not extend its treasury purchase program. As discussed, sans an increase in investor demand for these longer term debt securities, this will require the Treasury to either curtail its issuance of longer term debt or higher long term interest rates will result.

    Below is a breakdown of today's significant purchases in the $7.0 billion purchase operation of treasuries maturing between 5/15/2016 and 5/15/2019.

    - $4.753 billion of the 7-year Notes (CUSIP 912828LD0) maturing on 7/31/16 were purchased. These Notes were auctioned by the Treasury on 7/30/09 and issued by the Treasury on Friday 7/31/09.

    - 1.657 billion of the 10-year Notes (CUSIP 912828FQ8) maturing on 98/15/16 were purchased. These Notes were issued by the Treasury on 9/15/06.

    - 310 million of the 7-year Notes (CUSIP 912828KZ2) maturing on 6/30/16 were purchased. These Notes were issued by the Treasury on 6/30/09.

    - 160 million of the 30-year Bonds (CUSIP 912810DW5) maturing on 5/15/16 were purchased. These Bonds were issued by the Treasury on 8/15/86.

    - 112 million of the 30-year Bonds (CUSIP 912810EA2) maturing on 5/15/18 were purchased. These Bonds were issued by the Treasury on 5/16/88.

    Background article ... "Lending a Helping Hand" is here ...
    http://www.financialsense.com/fsu/ed...2009/0804.html

    Brian

     

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