market call is pretty provocative … is there good data on treasury auction bid depth and bidder profiles? for example long end of the curve is mostly insurance companies, no? do we know at the prior auctions how much were regional banks buying and what was the cover bid from alternative buying sources? seems like there should be good data to answer the question empirically of how much demand has gone offline and who the cover bid was that would be next in line i’m to buy
One interesting new bidder is stablecoin issuers. Potentially huge untapped new source of demand for USTs if the USG could just get out of their own way, meaning promote stablecoin adoption instead of try to thwart it. Can basically turn global demand for dollars from unbanked individual savers directly into demand for USTs.
It shows they own $53 billion in t-bills and another $16 billion in other short-term deposits. Not enough to fill the gap overnight, but in the medium to long-term a potentially relevant source of funding (and also route to the extinction of most LatAm currencies, not to mention other western fiat currencies. Why hold local currency in a world where USD is accessible and accepted everywhere via stablecoins?)
Side note: Tether's Q1 profit was $1.5 billion. Goldman's was $3.2 billion.
Tether is 9 years old and has 48 employees. Goldman is 150 years old and has 48,000 employees.
market call is pretty provocative … is there good data on treasury auction bid depth and bidder profiles? for example long end of the curve is mostly insurance companies, no? do we know at the prior auctions how much were regional banks buying and what was the cover bid from alternative buying sources? seems like there should be good data to answer the question empirically of how much demand has gone offline and who the cover bid was that would be next in line i’m to buy
Couldn't find auction level data with a cursory google search. Link below gives monthly accounting of major foreign holders of treasury securities so you can see the change in foreign central bank holdings over time: https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html
One interesting new bidder is stablecoin issuers. Potentially huge untapped new source of demand for USTs if the USG could just get out of their own way, meaning promote stablecoin adoption instead of try to thwart it. Can basically turn global demand for dollars from unbanked individual savers directly into demand for USTs.
Tether just released their most recent quarterly "attestation of assets and liabilities" today: https://tether.to/en/tethers-latest-q1-2023-assurance-report-shows-reserves-surplus-at-all-time-high-of-244b-up-148b-in-net-profit-new-categories-for-additional-transparency-reveals-bitcoin-and-gold-allocations/
It shows they own $53 billion in t-bills and another $16 billion in other short-term deposits. Not enough to fill the gap overnight, but in the medium to long-term a potentially relevant source of funding (and also route to the extinction of most LatAm currencies, not to mention other western fiat currencies. Why hold local currency in a world where USD is accessible and accepted everywhere via stablecoins?)
Side note: Tether's Q1 profit was $1.5 billion. Goldman's was $3.2 billion.
Tether is 9 years old and has 48 employees. Goldman is 150 years old and has 48,000 employees.