Hmmmm.....'Glitch' Blocked Goldman at Treasury Auction.

Hmmmm.....'Glitch' Blocked Goldman at Treasury Auction.HT:  Wall Street Journal:

The Treasury is investigating the glitch, said people familiar with the situation. A spokeswoman at the New York Fed referred questions to the Treasury Department.

The mishap is the latest in a string of technical hiccups in U.S. financial markets that have raised anxieties among investors about losing money because of balky computers. The glitches are coming as banks and regulators push for trading to become more automated and electronic.
The orderly processing of debt auctions is critical to funding U.S. government programs and obligations. The Federal Reserve Bank of New York gathers and processes orders for Treasury auctions several times a month.

A glitch in a computer system at the center of the $11.6 trillion market for U.S. government debt last week blocked Goldman Sachs Group Inc.’s multibillion-dollar order at an auction of Treasury bills, leaving the bank empty-handed and altering prices in the U.S. debt market.

The Treasury Department on Sept. 9 sold $30 billion of bills that mature in three months. Goldman was left out when its order didn’t go through the computers at the Federal Reserve Bank of New York, which conducts debt auctions for the Treasury. When Treasury officials noticed the botched order, they manually allotted Goldman more T-bills that mature in six months than the bank had asked for in a simultaneous auction.
The Treasury Department has released few details about what happened, saying only that it suffered “a technical issue” in its web-based portal that “resulted in one bidder being unable to access the 3-month auction,” according to a statement on its Web site last week. The Treasury didn’t identify Goldman as the bidder.

Obama 'Administration' lets China bypass Wall Street for Treasury orders.

Obama 'Administration' lets China bypass Wall Street for Treasury orders.(Reuters).China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters. The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world. The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions. China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary. The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.
China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market. The granting to China of direct bidder status may be controversial because some government officials are concerned that China has gained too much leverage over the United States through its large Treasury holdings.For example, economist Brad Setser, who is a member of the National Economic Council and has also served on the National Security Council, has argued China's large Treasury holdings pose a national security threat. Writing for the Council on Foreign Relations in 2009, Setser posited that China's massive U.S. debt holdings gave it power over U.S. policy via the threat of a swift, large sale of U.S. debt that could send the market into turmoil and drive up interest rates.Hmmmmm.........YU SO PHUKT?Read the full story here.