Article

2012-05-22 Economy

U.S. lets China bypass Wall Street for Treasury debt orders

Reuters: China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government. This means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world. China is preserving the value of specific information about its bidding habits. By bidding directly, China prevents Wall Street banks from trying to exploit its huge presence in a given auction by driving up the price.

It is one of several courtesies provided to a buyer in a class by itself in terms of purchasing power. Although the Japanese, for example, own about $1.1 trillion of Treasuries, their purchasing has been less centralized. Buying by Japan is scattered among institutions, including pension funds, large Japanese banks and the Bank of Japan, without a single entity dominating.

Granting China a direct bidding link is not the first time Treasury has gone to great lengths to keep its largest client happy.

Posted by Anguper Hupomosing9418 2012-05-22 02:15|| || Front Page|| [11135 views ] Top

#1 It would appear to me that some checks and balances are in order. Perhaps business as usual. No budget, Health care passed without review. My concern is should we have a genuine attempt at spending cuts, like Greece and Spain we will have a major backlash. Should Obama lose this election he could return offering hope and change in four years. Should government cuts bite, then revenues will drop. Very difficult time to manage this mess with little or no wiggle room.

Posted by Dale 2012-05-22 10:55|| 2012-05-22 10:55|| Front Page Top

#2 Our "Manchurian Candidate" has opened the gates wider for the Han "Trojan Horse".

Posted by borgboy 2012-05-22 13:43|| 2012-05-22 13:43|| Front Page Top

#3 Very difficult time to manage this mess with little or no wiggle room. Yes, indeed. Things just look stable. Our ~~feck~~fearless leaders are kicking the can down the road as far as they can.

Posted by Anguper Hupomosing9418 2012-05-22 14:43|| 2012-05-22 14:43|| Front Page Top

#4 Open the kimono.

Posted by Perfesser 2012-05-22 20:43|| 2012-05-22 20:43|| Front Page Top

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