Submitted by Tyler Durden on 06/10/2011 11:35 -0400
* Agency MBS
* Consumer Credit
* Federal Reserve
* Goldman Sachs
* Mortgage Loans
Either we have just gotten yet another confirmation of just how worthless the Flow of Funds "household" plug category is, or there is something very, very wrong with conventional wisdom. According to a detailed breakdown of the Z.1 from Goldman Sachs the biggest seller of US Treasurys to the Fed in Q1, at an annualized rate of $1.1 trillion, were... US Households. We have to wonder how this news makes even remote sense when confronted with the ongoing dumping of stocks by retail investors. On the other hand, if indeed the Fed is correct then the entire paradigm of retail jumping into the safety of US paper may have to be reevaluated. And not only that, but if this activity has continued into Q2, it may present even greater risks for the Fed's unwind of QE2: should households persist in their Treasury dispositions with only dealers left to pick up the pieces, Gross' thesis may be proven right much faster than we expected, Fed Treasury puts notwithstanding.
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http://www.zerohedge.com/article/according-fed-q1-us-households-sold-11-trillion-annualized-treasurys-federal-reserve
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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