Reality Is Walking Up To The Front Door

Dig this tidbit showing that our three biggest lenders have stopped lending for now.

Data showed that China, the largest holder of U.S. Treasury securities, maintained its holdings at 798.9 billion dollars in October.

Japan, the second-largest holder of Treasury debt, decreased its holdings to 746.5 billion dollars in October from 751.5 billion dollars a month ago.

Next on the list, Britain decreased its holdings to 230.7 billion dollars from 249.5 billion dollars.

Now check out this bit of info.

The Treasury auctions will start Monday with $44 billion of two-year notes, followed by $42 billion of five-year notes on Tuesday and $32 billion of seven-year paper scheduled for Wednesday.

The volume matches records set in November, when demand was strong and sufficient to lower the government's cost of borrowing in each case.

The success of this next batch is less assured given the timing and longstanding concerns that the government's record-breaking debt issuance—which targets around $1.4 trillion in the fiscal year ending in September—is spoiling the appeal of U.S. assets.

Political arguments will continue in the current vein until reality intrudes.