The Honorable J. Danforth Quayle
http://www.treas.gov/offices/domestic-finance/debt-management/gsr92rpt.pdf

The Federal Reserve now engages in spot-checking of customer bids in Treasury
auctions for authenticity

The Treasury and the Federal Reserve are instituting a new system of
confirmation by customers receiving large awards (over $500 million), to verify
the authenticity of customer bids.

While continuing to seek creditworthy counterparties, and while enhancing its market
surveillance capabilities, the FRBNY plans to discontinue the "dealer surveillance" now
exercised over primary dealers through the monitoring of specific Federal Reserve standards and
through regular on-site inspection visits.

Reopenings could occur
either through standard auctions, through "tap" issues whereby the Treasury offers
securities to the market on a continuous basis, or through other means.

> Sorry, had to toss that in.

The Honorable J. Danforth Quayle
http://www.treas.gov/offices/domestic-finance/debt-management/gsr92rpt.pdf

The Federal Reserve now engages in spot-checking of customer bids in Treasury
auctions for authenticity

The Treasury and the Federal Reserve are instituting a new system of
confirmation by customers receiving large awards (over $500 million), to verify
the authenticity of customer bids.

While continuing to seek creditworthy counterparties, and while enhancing its market
surveillance capabilities, the FRBNY plans to discontinue the "dealer surveillance" now
exercised over primary dealers through the monitoring of specific Federal Reserve standards and
through regular on-site inspection visits.

Reopenings could occur
either through standard auctions, through "tap" issues whereby the Treasury offers
securities to the market on a continuous basis, or through other means.

> Sorry, had to toss that in.

Beginning in 1960, Treasury sometimes refinanced maturing debt by issuing new debt inone or more subscription offerings and using the proceeds to redeem the maturing debt. These operationswere called “cash refundings.” See Gaines (1962, pp. 174-176) and Banyas (1973, pp. 8-10 and 27-30). The subscription offerings in a cash refunding were not different from the subscription offerings used tofund a budget deficit.

Drawbacks to Exchange Offerings. In setting the terms of an exchange offering,Treasury bore the risk that it might set the yields on its new issues too low and that investors might choose to redeem an unexpectedly large fraction of the maturing debt. This could expose Treasury to a cash flow crisis as it scrambled to meet investor demands for cash redemption.

On at least two occasions the Federal Reserve directly supported floundering exchange offerings. In November 1955, Treasury offered either a 1-year certificate of indebtedness or a 2-year 6-month note inexchange for $12.2 billion of securities maturing on December 15 (FRBNY Circular No. 4286, November 25, 1955). When market conditions deteriorated sharply on the last day of the subscription period, theFederal Reserve purchased $167 million of the certificates on a when-issued basis for the System Open Market Account.

Ok, I’m really sick of myself, have a nice day!

http://www.g7.utoronto.ca/g20/20031026_cs_usa.pdf

To achieve the $5 billion redemption, SOMA will purchase $7,126,019,000 of the 2/21/08 26-week Treasury bill (912795C82), $5,239,824,000 of the 11/23/07 13-week Treasury bill (912795B34), and will not participate in the 9/20/07 4-week Treasury bill (912795A27) auction. As with all SOMA purchases in the Treasury auctions, the amounts purchased are “add-ons” to the amounts publicly announced and issued by Treasury.

The good news is that M1 and M2 have finally expanded. This may not last; the
Fed has been taking $29 billion out of the financial system every day for about two weeks. I assume that these “reverse repos” are an effort to balance the $700 billion rescue plan.

http://timingthemarket.blogspot.com/

What are these guys doing??

Treasury is like OPEC looking for price stability, so one would think that Treasury would be like OPEC and decrease the inventory to increase the yield. Thus, maybe the at of imposing a premium penalty, Treasury takes the wind out of speculation and then they don’t have to touch inventory because policy acts as intervention … huh, huh, what think for free opinion bullcrap??

Re: "A day after Ramanathan’s warning, the Treasury said it was reviewing the trading of two- and five-year notes after a scarcity in the securities led to rising fails. The Treasury has conducted at least nine such reviews, known as “large position reports,” to monitor against market manipulation since 1997.

A week later the Treasury Market Practices Group recommended imposing a penalty rate that equals either 3 percent minus the Fed’s target rate for overnight loans between banks, or zero, whichever is greater. The central bank’s target is 1 percent. The TMPG said it plans to discuss by Jan. 5 a potential plan to implement the measures."

WHAT this is like is this (this is a special treat, so no need to thank me, as usual {punk}):

From the Yves treasure vault:

http://www.nakedcapitalism.com/2008/06/one-method-to-flush-out-oil-speculators.html

Daniel Dicker, a former oil trader writing at TheStreet.com, contends that there is a way to test the hypothesis that speculation is influencing oil prices (a view that Dicker supports). Exchanges could impost a "liquidiation only" requirement, which was last used to break the Hunt brothers' attempted corner of the silver market in the early 1980s (hat tip reader Michael).

In one instance, however, the speculation premium was "successfully" tested – in the silver markets in 1980 when the Hunt brothers attempted to corner the market. As silver approached $50 an ounce in January 1980, the commercial participants asked for relief from the enormous margin calls from ever-rising prices. The CFTC and the Comex (the predecessor to the Nymex) responded effectively by imposing "liquidation-only" trading — traders were allowed only to close existing positions and not permitted to initiate new positions.

This forced purely speculative positions to be closed rapidly, as they could no longer be "rolled" into future months at expiration. This caused the price of silver to drop by $12 the day after it was imposed, a decrease of over 20%! Over the course of the next three months, as contract months expired, the price dropped over 50%.

>> Huh, huh,,, huh?

Tsy Direct or cash account, cash settlement for Tsy security at broker.

It is likely the larger banks and dealers who were promising more Treasuries than they could deliver and juggling their inventory between their open positions; as Anonymous above said, effectively unsecured lending. I see this shift as helping the Treasury funds but putting more pressure on the big banks and dealers; so I’m not sure if this was really intended to benefit anybody as much as to stop the monkey business.

http://financialtraders.blogspot.com/2008/11/carry-trade-is-back-how-to-take-your.html