Pile of unwanted Treasuries shows cracks in market

New York

THE world's biggest bond dealers are getting saddled with Treasuries that they cannot seem to easily get rid of, adding to evidence of cracks in the US$13.3 trillion market for US government debt.

The 22 primary dealers held more Treasuries last month than any time in the last two years, Federal Reserve Bank of New York data show. While at first glance that may suggest a bullish stance, the surge in holdings is more likely the result of investors including central banks dumping the debt on the firms, said JPMorgan Chase & Co strategist Jay Barry. Foreign official accounts sold a net US$105 billion of the securities in December and January, an unprecedented liquidation, Treasury Department data show.