After Dumping 30% Of Its Treasury Holdings In Half A Year, Russia Warns It Will Continue Selling US Debt

From Zero Hedge
After Dumping 30% Of Its Treasury Holdings In Half A Year, Russia Warns It Will Continue Selling US Debt
Just in time for the end of QE2, when the US needs every possible foreign buyer of US debt to step up to the plate, we get confirmation that yet another major foreign central bank has decided to not only not add to its US debt holdings, but to actively sell US Treasurys. The WSJ reports that “Russia will likely continue lowering its U.S. debt holdings as Washington struggles to contain a budget deficit and bolster a tepid economic recovery, a top aide to President Dmitry Medvedev said Saturday. “The share of our portfolio in U.S. instruments has gone down and probably will go down further,” said Arkady Dvorkovich, chief economic aide to the president, told Dow Jones in an interview on the sidelines of the St. Petersburg International Economic Forum.” Well, with Russia out, at least we have China and Japan continuing to buy US debt…. Oh wait, China is contemplating dumping two thirds of its debt you say? And the biggest buyer of Japanese bonds is now in the process of selling Japanese bonds in the open market for the first time (so not really in the market of US bonds). Well, surely US households will step up to the plate. After all they all have so much “cash on the sidelines” courtesy of the RecoveryTM ©® that they can’t wait to dump it all into paper yielding less than 3% a year, and has negative real rates of return. Wait, what’s that: according to the Fed, in Q1 US “households” sold $1.1 trillion annualized in Treasurys to the Fed? So, let’s get this straight: China, Japan, and now very much openly Russia, the three countries with the largest financial reserves in the world, are threatening, if not already dumping US bonds, just in time for US households to sell their holdings of US paper to Brian Sack. And this is happening 2 weeks before QE2 ends… Um… Are we and Bill Gross (and certainly not Morgan Stanley) the only ones to see a problem with this?
More on the latest confirmation that the time of US superpower supremacy has ended…
Asked if U.S. dollar was as solid an investment now as it was 10 years ago, Mr. Dvorkovich said: “On an absolute basis, yes. On a relative basis, compared to other investments, of course not.”
“When we take decisions and compare, we’re not thinking in absolute terms,” he said.
Russia’s financial reserves—which stood at $528 billion as of June 10—are the world’s third largest, after China and Japan’s. As of May, according to Russia’s central bank, 47% of reserves were in dollars and 41% in euros, compared with 45.2% in dollars and 43.1% in euros on Jan. 1.
The central bank recently diversified the stash to include the Canadian dollar, which makes up 1% of the total, and plans to put 0.8% into the Australian dollar starting in September.
And next, presenting the monthly status update of the second cold war, which is now held entirely between central bank trading accounts. Russia has now cut 30% of its Treasury holdings in the past 7 months. When the caption above the blue thingy hits zero, the “Evil Empire” wins.
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J.P. Morgan, HSBC sued for silver manipulation

NEW YORK (MarketWatch) — Two separate lawsuits filed in federal court in Manhattan Wednesday allege that banks J.P. Morgan Chase & Co. (JPM 37.60, +0.06, +0.16%) and HSBC Holdings Inc. (HBC 51.99, -0.29, -0.55%) manipulate the price of silver futures by “amassing enormous short positions.”



The suits allege that by managing giant positions in silver futures and options, the banks have influenced the prices of silver on the New York Stock Exchanges’ Comex Exchange since early 2008.



The Commodity Futures Trading Commission has been in the midst of a high-profile, two-year-old investigation of the silver market.



J.P. Morgan declined to comment on the lawsuits. HSBC wasn’t immediately available to comment.



A suit filed by Peter Laskaris, who traded COMEX silver futures and options contracts, says the banks colluded on the silver market and informed each other of large trades. It says the banks used their large positions to effect the market by “flooding” it with a disproportionate number of orders.



The suit says J.P. Morgan and HSBC in August 2008 together held 85% of the net short position in silver and by the first quarter 2009 held $7.9 billion in precious metal derivatives.



According to the other lawsuit filed by Brian Beatty, who also traded silver contracts, says he was hurt by J.P. Morgan’s alleged anticompetitive acts and market manipulation. Specifically, the suit said Beatty, a Connecticut resident, bought and sold silver contracts on Aug. 14 and Aug. 15, 2008, when the price of silver suffered an 18% drop from $14.86 to $12.23.



Laskaris, a New York resident, also was hurt by the alleged “artificial market in COMEX silver futures” from June 2008 to June 2009, according to the lawsuit.



The suit by Laskaris further alleges that when the public began complaining about the banks’ high positions and the government began an investigation in March silver prices, silver went from underperforming to outperforming the price of gold.



The silver market, no stranger to controversy, has long been the focus of manipulation theorists. At a CFTC hearing Tuesday to consider new rules to strengthen its commodity-enforcement powers, commissioner Bart Chilton said market players have made “repeated” and “fraudulent efforts to persuade and deviously control” silver prices.



J.P. Morgan and HSBC traditionally have been big players in the silver market. A CFTC weekly report for Oct. 19, the most recent period, shows that less than four market players hold 24.3% of all net bearish bets in the silver market. J.P. Morgan and HSBC are among those market participants, The Wall Street Journal reported, citing silver traders and a person close to the investigation.



In recent months, however, the banks with large futures positions have sharply reduced the size of their holdings.



The lawsuits request the banks’ “unjust” enrichments from the collusion and manipulation

Gallup Survey Shows Unemployment Jumps From 9.4% to 10.1%

Mike Shedlock

As economists up their forecasts for tomorrow's jobs report, I am lowering mine.


First, the recent ADP report suggests private nonfarm employment dropped by 39,000 with expectations of a gain. Second, Gallup Finds U.S. Unemployment at 10.1% in September

Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September -- up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month -- the unemployment rate was 9.4% in mid-September -- and therefore is unlikely to be picked up in the government's unemployment report on Friday.


The increase in the unemployment rate component of Gallup's underemployment measure is partially offset by fewer part-time workers, 8.7%, now wanting full-time work, down from 9.3% in August and 9.5% at the end of July.


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