Insight and investigations from our expert reporters
A Reuters exclusive today describes a method China used recently to hide some of its U.S. Treasury purchases – “US caught China buying more Treasuries than disclosed.”
Treasury officials said they were simply modernizing outdated procedures two years ago when they revamped the rules for participating in government bond auctions.
The real reason for the change, a Reuters investigation has found, was more serious: The Treasury concluded that China was buying much more in U.S. debt than was being disclosed, potentially in violation of auction rules, and it wanted to bring those purchases into the open – all without ruffling feathers in Beijing.
Stephen Culp, Reuters graphics editor, came up with a handy visual explanation for the practice that allowed China to mask billions of dollars worth of U.S. debt purchases at auctions. China placed its bids informally through primary dealers, who then placed their bids at Treasury auctions without naming China as a customer. The Treasury outlawed the practice in June, 2009, but kept the reason for the rule-change under wraps.
By Ben Berkovitz
Diplomacy is a complex thing, and it gets even more complicated when diplomats are trying to act as salesmen.
A series of State Department cables, obtained by WikiLeaks and provided to Reuters by a third party, demonstrates just how intertwined American political and commercial interests really are. (See special report “Weapons, frozen chicken, and the art of diplomacy“)
Washington economics correspondent Emily Kaiser delves into plutonomies and what pollster John Zogby calls the “Dreamless Dead” for her special report on income inequality in the United States.
Here are some interesting numbers from the OECD on how the wealth gap in America compares to other countries. (Full disclosure — I’m British)
Mark Hosenball has been in Delaware and Pennsylvania reporting on the midterm election campaign for our special report “Conservative donors let Christine O’Donnell sink.”
If that’s not enough O’Donnell for you, here’s his report from a bastion of conservative thinking in Delaware:
We’re getting a lot of good feedback on our special report on cozy ties between Wall Street and the Fed. As one Wall Street economist put it: “I’ve never seen the ‘Fed Alumni Association’ used more extensively for back-channel communications with the Street than has been the case since June.”
The story pulls back the veil on the privileged access that Federal Reserve officials give to big investors, former Fed officials, money market advisers and hedge funds.