It it widely known that in June the treasury made accounting changes to its Treasury Auction process that likely boosted the amount of indirect bidders (considered a proxy for foreign interest).

From a Reuters article:

"The Treasury's changes, contained in a June 1 entry to the Federal Register, relate to what it considers a "guaranteed bid." Under the previous arrangement, once a primary dealer offered securities at a pre-specified level to its customer, that bid was considered to be the dealer's own.



The matter was technical enough to confuse even industry veterans.



"We are not precisely sure what this all means," said Ward McCarthy, managing director at Stone & McCarthy Research Associates in Princeton, New Jersey.



"We spoke with some very seasoned market players with decades of experience on dealer trading floors who were similarly unsure what to make of the contents of the Federal Register.

...

The Treasury was not immediately available for comment."



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Cue to the sale of 5 year treasuries on July 29:



Bloomberg: "Indirect bidders bought 36.7 percent of the five-year notes, down from 62.8 percent of the securities at the June sale, the highest since December 2004."



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So... after a magical and massive increase in 'indirect bidders' in June (which qualmed market fears that foreign interest was waning), we go back to "normal" levels of ~35%...

Unfortunately, thanks to the accounting obfuscation we have come to rely upon from our friends at the Fed & Treasury & Co., the already elusive 'foreign interest' is further enshrouded in mystery. We don't really know if foreign interest is up, down or stagnant from its level one year ago.

We do know, however, that experts widely attributed the massive increase in 'indirect bidders' in June largely to the accounting manipulation change and not likely due to vastly increased foreign interest. So, ceteris parabis, could we not at least hypothesize that the fall from 62.8% to 36.7% in indirect bidders represents quite a significant fall in foreign interest?

Oh what am I saying, I'm sure my fears are irrational and unfounded. Our Dear Leaders (Fed & Treasury) have already proven themselves to be bastions of accounting consistency. True believers in 'tellin' it like it is.'

I mean, it's not like the Fed abused hedonic adjustments and geometric averaging to downwardly adjust the CPI to rationalize the government's desire to pay out less for social security. Or conveniently neglects millions of people in unemployment statistics. Or uses dollar swaps and liquidity programs to fudge the dollar's exchange rate. Okay, nevermind.