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Geithner Vs Gross Round 2: Is The Latest "Market Normalization" Proposal By The Treasury A Warning Shot Fired Straight At Alarmist PIMCO?

Tyler Durden's picture


For months Bill Gross has been very vocally antagonizing the US Treasury by telling anyone who cared to listen that US debt is nothing short of the world's biggest ponzi and that Ben Bernanke is satan. For the longest time Tim Geithner took this effrontery peacefully, always willing to offer the other cheek. Until last night. In what is quite possibly a direct warning shot fired straight at Pimco's primary revenue driver, the Treasury has made it clear Bill may want to focus on unicorns and rainbows in his next monthly letter.

What happened?

Earlier this week, The Treasury Borrowing Advisory Committee ("TBAC"), a advisory group chaired by JP Morgan's Matt Zames and Goldman Sachs, which also counts PIMCO among its members, basically made it clear that the hedge fund crew is firmly behind the debt ceiling hike, as an alternative would result in fire and brimstone falling from the sky - in other words the end of the Ponzi would mean the end of the world. And they should know: after all it is the same Matt Zames of whom JPM's John Hogan said back in 2007: “For whatever it[’]s worth, I am sitting at lunch with Matt Zames who just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a [P]onzi scheme.” Considering how right Zames was about Madoff, perhaps we should take his word for that far, far bigger ponzi scheme, the United States. In other words, the TBAC made a mortal enemy out of living within one's means (let alone austerity): surely such a mindboggling concept would be the end of Wall Street (which urgently needs to double world GDP to $200 trillion by 2020 to keep record bonuses flowing). Oddly enough the TBAC's sister organization at the New York Fed: the Treasury Market Practices Group ("TMPG"), which has most of the same member firms (except for PIMCO, relevant in a second, and also "curiously: has Matt Zames presiding on that particular group) may have made a comparable, though far more powerful enemy, out of PIMCO, after it proposed the introduction of fails charges for MBS trades, an action that is a direct affront to none other than Bill Gross' PIMCO, one of the world's most active managers of MBS/Agency securities. Should the proposal by TMPG, which as Bloomberg's Jody Shenn summarizes would affect traders in agency debt and mortgage bonds, forcing them to pay as
much as 3 percent in penalties in the case of trade fails, be enacted, PIMCO will not be happy. In fact, PIMCO has already said this fee "would damage the market." In other words, we now have the group that has perfected MAD to an artform, seeing splinters within it, which are warning of itheir own version of MAD. In yet other words, PIMCO is now threatening with MAD if the debt ceiling is hiked and if MBS traders are forced to actually pay for delivery failures. How long before one actually runs out of MAD cards? And did the Treasury just directly take on the $1.4 trillion bond manager which has made its feelings about US debt all too clear over the past few months.

So just what has gotten PIMCO's panties in a bunch? Bloomberg explains:

The U.S. central bank’s decision to hold benchmark interest rates at record lows has encouraged failures by reducing the cost of uncompleted trades, while its purchase of $1.25 trillion of mortgage bonds through March 2010 has made it more difficult to find bonds to settle contracts in a timely manner.

Uncompleted trades in agency mortgage securities remain elevated after rising to a record of almost $2.4 trillion during a week in November, according to Fed data.

Failures to receive or deliver the securities, which totaled $1.5 trillion in the week ended April 20, averaged about $330 billion weekly over the past 10 years, according to Fed data. The tallies are inflated by incomplete trades that continue over multiple days and are increased by strings of failures that can occur when a single party doesn’t settle a contract.

So, as a result, in order to "normalize" the market suddenly even though this has been happening for a long, long time...

The Treasury Market Practices Group, which the Federal Reserve Bank of New York helped form in 2007 to offer advice on debt markets, today proposed [that] Dealers and investors that fail to complete trades in agency debt and mortgage bonds may pay as much as 3 percent in penalties. That followed the introduction of a similar practice for U.S. government bonds that the organization backed in 2009...[This is] a fee Pacific Investment Management Co. says would damage the market.

More on a proposal that is so overdue, one can't help but wonder "why now."

The new charges could be as much as 3 percent of the trade size, with the formula based on a similar system for U.S. government debt, said Wipf, also a Morgan Stanley banker, in a telephone interview. The daily charge would be reduced by the Federal Open Market Committee’s lowest current target for the federal funds rate and divided by 360.

The answer to the above question comes when reading PIMCO's response:

The fail charge is too high and will be counter- productive,” Scott Simon, Newport Beach, California-based Pimco’s mortgage-bond head, said in an e-mail. “While it will reduce intentional fails, we believe it will sharply reduce liquidity and incent accounts to attempt short squeezes.”

A 1 percent fee “would be a much better level,” said Simon, whose firm manages the world’s largest bond fund.

Well, it may not lead to "market wide" short squeezes. But it will certainly lead to pain for the biggest private market participant in the space.

As for "why now" the TMPG has this laughable reason:

Reducing uncompleted trades is necessary because for individual companies, “fails can increase operational costs and counterparty credit risk, absorb scarce capital through regulatory charges, and damage customer relations,” the TMPG said in a paper released today.

“More generally,” the group added, “the prospect of persistent settlement fails at a high level can cause market participants to temporarily withdraw from the market, or even exit the market, adversely affecting market liquidity and stability.”

Uh, we have had record fails for an unprecedented amount of time, but yes, "customer relations" could be impaired. Especially if these are the same customers who listen to PIMCO and dump their securities.

And the most ironic thing is that at its core, this "customer relations" problem  again the fault of none other than the Fed.

The Fed’s decision to hold its target for the federal funds rate in a range of 0 percent to 0.25 percent since 2008 has helped encourage fails because it lowers the cost of not receiving cash in exchange for the promised securities. In a higher-rate environment, dealers would lose more because that cash could be invested at higher yields.

Lower rates boost the incentives for investors or dealers that want to “short,” or bet against, mortgage-bond prices to delay delivering bonds into sales contracts, according to the group’s paper.

Most transactions in the mortgage-bond market are conducted through so-called To Be Announced trading, which also adds incentives to fail on those contracts. TBA contracts can be filled through delivery of securities with a range of characteristics, rather than specific bonds

So while it is somewhat amusing that now according to the Fed's two way sock puppets, the market which is now beyond manipulated by the Fed, needs to promptly eradicate this one side effect of its endless meddling, a far more exciting possibility is that the Treasury has now taken a direct jab at PIMCO, which is certainly Tim Geithner's way of telling Gross to shut up with his endless Ponzi scheme references about the US economy, and satanic comparisons for Ben Bernanke. We expect to have the leaked data of PIMCO's April TRF holdings within the week. We will inform readers then if this tactic of unprecedented bullying by Tiny Tim has worked. But far more importantly, if this action was indeed taken with PIMCO (and an appropriate warning) in mind, it means that things are really starting to unravel.


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Sat, 04/30/2011 - 12:50 | 1224085 Silver Bug
Silver Bug's picture

Bill Gross has become the only vocal bond vigilantes, in a time when we desperately need them. Now Gross does have a tendency and a history to talk his books. Now that is much better than Tiny Tim's history, which consist of blatant lies, and nothing else.

Sat, 04/30/2011 - 13:10 | 1224108 pan-the-ist
Sun, 05/01/2011 - 05:07 | 1225121 Rikki-Tikki-Tavi
Rikki-Tikki-Tavi's picture

Perhaps the issue of mistrust can be addressed by changing the comp package of Timmy, Bernankrupt and all the regional FED presidents to 90% of salary paid in long dated US treasuries vested for 5 years?

Mon, 05/02/2011 - 03:49 | 1228484 Anonymouse
Anonymouse's picture

This is a new issue to me.  Is this a penalty above the make-whole amount?  There is a make-whole provision for a broken trade, isn't there?  There should be

Sat, 04/30/2011 - 17:31 | 1224087 michigan independant
michigan independant's picture

So the Guy is walking the turf smacking heads. Better deal than the ruble or renminbi or a news paper wrapping a fish sent to the loved ones.

to promptly eradicate this one side effect of its endless meddling, a far more exciting possibility is that the Treasury has now taken a direct jab at PIMCO, which is certainly Tim Geithner's way of telling Gross to shut up

In the long run there is no unpopular Government but they can be nasty along the way. The SWF Inc. will print it appears.

Sat, 04/30/2011 - 12:56 | 1224091 lolmao500
lolmao500's picture

In other news, this is the week they have to raise the debt ceiling.

Sat, 04/30/2011 - 13:05 | 1224101 Fail2Deliver
Fail2Deliver's picture

The .gov did the same thing when the banks were getting hammeredd by short sellers a few years ago; they outlawed naked short selling. Only for the banks mind you. Game was still on for the poor other companys not so well connected.

Fed needs BUYERS of these bonds. China must have told them to go to hell. Japan surely isn't interested. The Fed will now outlaw all short-selling of .gov bonds. Thus eliminating the Fed competition of selling.

Sat, 04/30/2011 - 13:06 | 1224103 Ned Zeppelin
Ned Zeppelin's picture

I would like to hear a layman's version of this story. 

Sat, 04/30/2011 - 13:21 | 1224122 Seer
Seer's picture

Too many holes in the dyke, not enough fingers...

The big fish are starting to realize that their feeding habits are colliding.

Buffett/Sokol skirmish small potatoes...

PIMCO merges with Fed (or Fed merges with PIMCO- no idea which way it'll go, but since there is now only consolidation possible [growth is dead], consolidation WILL happen).

Sat, 04/30/2011 - 13:42 | 1224162 ebworthen
ebworthen's picture


Turf war between punks who beat up seniors for their SS checks and shake kids down for their lunch money.


Sat, 04/30/2011 - 14:08 | 1224211 Piranhanoia
Piranhanoia's picture

After the fact guess?

"You mean in the old days there were places people could, what did you call it, shop?, at different places.  what was that like gramps?

Sat, 04/30/2011 - 17:42 | 1224373 Ura Bonehead
Ura Bonehead's picture

I’ll play along….  The layman’s version is:


Omega Theta Pi House (TMPG) has had the run of campus with impunity and with (unofficial) endorsement of Dean Vernon Wormer (Geithner).  But, for his own reasons the elitist and smooth talking Omega member, Gregg Marmalard (Gross), develops a hint of morals (we assume) and, over a few beers, goes pubic and rats out the Dean and his ruinous ways to the press.


Well, this does not please Dead Wormer or the Omega order.  To seek order, the Dean orders Omega member and campus ROTC commander, Doug Neidermeyer, to shave Gregg’s head and cover his balls in hot sauce.  [Frats do this kind of stuff’]


The (unwritten) Epilogue:


But does this public act to silence dissidences deter the likes of Delta man, John “Bluto” Blutarsky (Tyler D)?  Heavens no!  He steps forward and gives an impassioned speech to rally his fellow Deltas (ZH-ers) to save the day.  Fellow Delta outcasts like Otter, Boon, Pinto, D-Day and Flounder build a rogue parade float into a fighting machine to wreak havoc on Dean Wormer’s annual homecoming parade.


But Gregg survives his ordeal with the help of the Delta boys, Katy and Boob live happily ever after, and Bluto runs off with the stuck-up Mandy Pepperidge (played by Meredith Whitney).


Hope this helps.  :)


“Seven years of college down the drain.”

Sat, 04/30/2011 - 20:59 | 1224709 NOTaREALmerican
NOTaREALmerican's picture

HA!!   Too funny. 


Sat, 04/30/2011 - 21:08 | 1224661 Miles Kendig
Miles Kendig's picture


Here it is.  The major players in the servicing and formulation of MBS are busy conducting in depth and belated QC of the each underlying mortgage in each pool.  This process is to determine which mortgages are total junk, partial junk and those that can actually pass court muster.  With $$$ chasing yield these primary TBTF's are reworking pools of mortgages into severely junktified - newly spectacular super senior.  A side effect of this process, besides offloading all the junktified to yeild chasing suckers (echoes of 2005-2008 anyone?) is that there are quality golden opportunities presenting to both long & short the MBS space with heretofore drill down data unavailable to even the road kill known as the PMI's.  Since the former securities have yet to be fully stripped, reworked , pooled et al for proper due diligence by the buy side we have the "like structured" securities gaping hole just waiting for the butt plug of the "Big Boy Letter".  Since PIMCO is "managing" the feds holdings, but BAC, JPM et al are riding the crew to work extra hours on the Déjà Vu road show ( aka the contract strip joints adding a layer of deniability to the TBTF's while providing the ability to say "we don't rightly know for sure at present, but are looking at a variety of alternatives" yadda  yadda  yadda.  So the FRBNY and the TBAC decided to try and get PIMCO to not only suck up the longs on the newly made junktification, but pony up a 3% fee when the TBTF's fail to deliver the reworked crap, sprinkled with just enough Mezz +1 to keep it juicy for PIMCO to margin on speculation the fed will be forced to do another round of MBS QEX. 

THIS is the barrel of the action Ned.


Sat, 04/30/2011 - 22:54 | 1224736 michigan independant
michigan independant's picture

Thanks for the steering wheel on the topic. I assume some buckets will produce and I assume what we will get as the producing class. Again thank you.

The weighted-average maturity (WAM) of a passthrough MBS is the average of the maturities of the mortgages in the pool.

The weighted average coupon (WAC) of a passthrough MBS is the average of the coupons of the mortgages in the pool, weighted by their original balances at the issuance of the MBS.

I assume no (WAC) for the short list.

Convexity is a risk management figure, used similarly to the way 'gamma' is used in derivatives risks management; it is a number used to manage the market risk a bond portfolio is exposed to. If the combined convexity and duration of a trading book is high, so is the risk. However, if the combined convexity and duration are low, the book is hedged, and little money will be lost even if fairly substantial interest movements occur. (Parallel in the yield curve.)

I need help on that Elapsed Coupons old buddy ; )

Minsky broke down the process from stability to instability into three types of debt phases: hedge, speculative, Ponzi.

 The hedge phase describes that buyer’s cash flows cover interest and principal payments for borrowers who obtain a debt to buy an asset. This way, the debt is self-liquidating, fully hedged, so it is a stabilizing factor in this economic phase. The speculative phase is a step further on the risk side. In this phase, cash flows cover only interest payments, but not enough to amortize the principal.

In order to take over failing banks some good banks said they did NOT want to but behind closed doors you know how that goes as weighted. I guess a few hookers will be set on fire.

Theme song as they screw us again.

Who is that in the rear view mirror?

Sat, 04/30/2011 - 13:25 | 1224126 Seer
Seer's picture

Climbing aboard UFOs?

Sat, 04/30/2011 - 13:45 | 1224170 Hephasteus
Hephasteus's picture

There goes robo's lulu.

Sat, 04/30/2011 - 16:31 | 1224408 Hansel
Hansel's picture

Is this any different than any other week for the last couple years?  OM

Sat, 04/30/2011 - 13:12 | 1224112 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Who gives a s**t about about this theater.

America is coming to end, it's only a matter of when and how many are going to suffer and whether the perpetrators will get away with it again as history shows they always do. 

Sat, 04/30/2011 - 13:36 | 1224151 tickhound
tickhound's picture

All right on schedule and by design.

Sat, 04/30/2011 - 15:54 | 1224371 RockyRacoon
RockyRacoon's picture

It appears to be the jockeying of prime positions on the first few lifeboats off the Titanic.   They could care less about the steerage passengers.   Women and children be damned.

Sat, 04/30/2011 - 19:43 | 1224618 Vlad Tepid
Vlad Tepid's picture

The children in this analogy are being lashed together by TPTB and used as flotation devices.

Sat, 04/30/2011 - 21:02 | 1224713 NOTaREALmerican
NOTaREALmerican's picture

HA!   Good one.   The cynism level is unusually good today! 

Sun, 05/01/2011 - 16:36 | 1225922 kumquatsunite
kumquatsunite's picture

This really fries me; it is irresponsible and a disgrace to this country to say, "America is coming to an end." By your writing here, one can presume you are of a certain age...let's say above 35? If you have children, grandchildren, sisters, brothers, friends, and/or a spouse, to your spouting of prognostications that "America is coming to an end" belies every breath you take. If you actually think so, then saddle up and head for Mexico or wherever. As to me, I didn't participate in any of the ponzi/fraud/scwew our children, take for today like we are third worlders, live in a house that I can't afford, schemes.

The "perpetrators" of this are every single American: the liberals who decided that their self-aggrandizing munificence would drive every company that had to pay taxes offshore where they could offset their stolen, excessive, and redistributed to the mouth-breather, taxes via third world labor. Then there are the conservatives who failed to "conserve" anything, especially a sense of propriety and decency that would have kept this country's "pants" up (moral sense and fiscal sense go hand in hand). Instead, the liberals and the conservatives combined to serve up to our children a miasmic trough of financial calamity, sexual waste (both figuratively and literally...really...oh it's Sunday, no need to be explicit, even the animals haven't performed the kind of acts your children have been told are "normal" in the last decade) and overt acts of indecency that, by all accounts, should have ended careers: really: are women so stupid that flashing their bits is just another way to obtain publicity? Must men go on in the 21st century about "obtaining" a woman? Seriously? That sexual freedom has so worked. Not.

We will revert to the mean, meaning time to learn how to do things for yourself again. My brother always mowed the lawn with a push mower. My mother stood in a hot kitchen cooking Sunday fried chicken (no air conditioning!), and my sister worked as a dishwasher, and none of them complained about doing these things. We are being told we are too lazy to mow our own lawns and too stupid for our children to be given the slots in colleges and universities that we pay for as taxpayers, so engineers, doctors, and educated must be "inshored". Really, funny thought WE went to the moon. Thought WE created computers. Thought WE were the best medical system in the world (at least until affirmative action got ahold of the American Medical Association, and by the way, just who is it letting all those foreign docs practice at our hospitals? More than one-half the doctors at hospitals are now foreign; you can pull up the list of doctors on any hospital website and see who they are and where they are from. What is that about? Can you say foreign docs are more likely to pull the plug on the over-fifty crowd? Hmmmmm...

So, the mess is here and now it is time to clean it up. Here's the rules to start: Erase every tattoo...ohh painful. Too bad so sad. Eat with your mouth closed. STand up straight and sit up straighter. Children should be polite and say "Yes,mam and No, Sir." And above all, if you are an employee, do your job or get out. I don't need you wasting my time with sand bagging me while you are clicking the clock. America will be great again. So kiss China's cheap stuff goodbye and let's save this country! God Bless America and God Bless Donald Trump who is the ONLY guy who has said let's tell China to shove it! Tariffs! Tariffs! Tariffs! That'll bring the cost of gas down real fast.

Sun, 05/01/2011 - 21:45 | 1226821 i-dog
i-dog's picture

That rant is nothing but a series of regurgitated propaganda ... ending with "Trump is the solution"? WTF?!!

Someone has laced your Geritol with serious mind-altering substances, or it is sending you blind.

Sat, 04/30/2011 - 13:18 | 1224117 unclebigs
unclebigs's picture

So far Gross is Losing His Ass shorting treasuries.  LMFAO!!!!!!!

Sat, 04/30/2011 - 22:08 | 1224801 buzzsaw99
buzzsaw99's picture

+1 suck it long tbt junkers.

Sun, 05/01/2011 - 18:02 | 1226017 adeptish
adeptish's picture


Sun, 05/01/2011 - 23:26 | 1227613 Orly
Orly's picture

He never said he was short.  He said he sold them long.  In cash.

Sat, 04/30/2011 - 13:23 | 1224127 Boilermaker
Boilermaker's picture

This two assholes are sitting together at Bernak's back yard deck having a top-shelf martini and laughing their asses off together.

Sat, 04/30/2011 - 13:33 | 1224144 abc123
abc123's picture

That's definitely "next-level" cynicism.  I like it.

Sat, 04/30/2011 - 13:45 | 1224176 dark pools of soros
dark pools of soros's picture

remember, PIMCO isn't risking any of Bill's cash - they could be the next Lehman to be sacrificed

Sat, 04/30/2011 - 13:36 | 1224149 DavidC
DavidC's picture

I'd sooner trust Gross, who has his and his clients' money on the line, even if he does talk his own book, than an intellectual half-wit who won't even pay his taxes despite his high income.

Unravel? Good, let it, it might return the system to some semblance of reality and not hammer people who rely on interest/annuity income, and don't rely on inflation (in other words 90% of the population), to survive this almighty mess.


Sat, 04/30/2011 - 13:46 | 1224171 Gold 36000
Gold 36000's picture

Very few people rely on interest income or any form of capital returns.  Most people are always in debt.  Hence inflation and soft money help the high end and the low  end.  It is always the preferred solution.  The small number of people who have self discipline and leave beneath their means are the ones punished.

Majority rule, eh?   Skittle?

Sat, 04/30/2011 - 13:49 | 1224180 Seer
Seer's picture

You think that Timmy doesn't have clients?  Sorry, but Timmy's clients are more substantial than Gross's.

As far as "relying" on interest/annuity income, you might want to look long and hard as to what this really means (making money w/o being productive, which, in essence, is the very thing that you're accusing the govt of doing).

Sat, 04/30/2011 - 15:15 | 1224314 DavidC
DavidC's picture

So you're suggesting that responsible pensioners, who have saved into pension schemes so that they can live in retirement are making money without being productive, despite having been so (in most cases) for the majority of their working lives? I'm not talking of public sector, index linked pensions.


Sat, 04/30/2011 - 15:34 | 1224344 Seer
Seer's picture

So, you're suggesting that our children have to pay for this, even if it means their enslavement?

Listen, because I say things that aren't favorable (coated in skittles) doesn't mean that's the way that I want them to be.  It's the way things ARE!

Reality check: 2/3 of the world's population lives on $3/day or less.  These people aren't likely going to retire.  And, That's how it's been for the overwhelming majority of people throughout human history.  This entire notion of "retiring" was perpetuated by TPTB (and abetted by cheap energy) as one big Ponzi.

I've paid into the System.  And I do NOT expect to get anything out.  I recognize that I'm really only paying those who were in the Ponzi first, and that my energy is better spent concentrating on making my own future than in fighting the "injustices" that will be wrought by the failing Ponzi.

If you can explain how interest isn't a Ponzi then you might have a leg to stand on...

Sat, 04/30/2011 - 18:46 | 1224557 robobbob
robobbob's picture


savings used to fund activities that actually produce a surplus are what built civilization. the problem is that favorable conditions tend to draw the swarms of parasitic locusts who are now eating several generations worth of stocks.

It is not interest per se that is bad, it is maladjusted investment whos end goal is obtaining interest at the expense of creating genuine surplus.

returns chasing returns for the sake of ever higher returns beyond what real productivity can support is the root cause of destruction.

retiring is theoretically possible when surpluses are incrementally stored to provide for future use. The problem is when inflation outstrips those provisions. Its even worse when the those provisions are intentionally being looted. For decades the people have been told to sacriface to fill to government graineries. Now the time is coming when they will be needed, and we're finding out the warehouses are empty.

That said, if tried to warn people for years. few listened.

Sat, 04/30/2011 - 22:22 | 1224816 Harlequin001
Harlequin001's picture

The choice is stark. Do I pay into the state pension system and sacrifice my own future or do I walk and look after my myself in the future. This is the consequence if paying into a system that has no assets but is funded by taxation. 'How do I know that when I come to rely on it it will be able to pay?'

Welfare doesn't work, and more so when it is paid for by debt.

We can argue that pensioners provided something or nothing if you will, but the fact is they did not provide the benefits they need to provide this level of benefits now, which is where the fraud is perpetrated. This is a helluva time to find out you have no real retirement fund, but there it is...

You have no adequate retirement fund.

Sat, 04/30/2011 - 13:38 | 1224150 ebworthen
ebworthen's picture


Get the guillotines out of mothballs.

Versailles needs to be handed over to the people.

Rome needs to be sacked.

The heads of the elites need to roll.


Sat, 04/30/2011 - 13:41 | 1224165 Gold 36000
Gold 36000's picture

It is time ebworthen.  Don't forget.  fifty percent gasoline.  Fifty percent styrofoam.  It is so sticky it will not come off of anything.  You now have cheap flame thrower material.  Use a three man sling shot.  Remember.

Sat, 04/30/2011 - 13:54 | 1224197 dark pools of soros
dark pools of soros's picture

can i use that to help start my pellet stove??  not too toxic?

Sun, 05/01/2011 - 06:14 | 1225156 Dr. Impossible
Dr. Impossible's picture ..thats just wrong...anyhow there's 1 more household ingredient(and a lil dab will do ya) you could add to ensure that the fire couldn't even be approached to put it out, muchless extinguished....think about it...if your intent is to do area-of-effect damage....why would you limit it to the splash zone..anyhow, your mix just doesn't burn hot enough/long enough to be fun if your older then 14...AND IF IT AIN'T FUN...DON"T DO IT!!! your just gonna get yourself hurt before you even get out of your garage....shit..i'm gonna say it again DON'T DO IT..and again DON'T DO IT.

..remember Pattons' words... Sun Tsu...Yoda's

a better ploy..just stay nimble on your feet,and keep moving, DON'T WASTE RESOURCES...yet(you'll need them for when the dictators begin arriving in a few years) they'll scramble and neutralize themselves, as you can see, their leaderships confusion has already has left them in a position where they couldn't fight their way outa a wet paper bag...

Sat, 04/30/2011 - 13:45 | 1224168 Racer
Racer's picture

Please don't call them elites because they are the opposite of that...

they are leeches

Sat, 04/30/2011 - 13:50 | 1224188 treemagnet
treemagnet's picture

not yet - my greenhouse is just going up and the genset won't be hooked up for another month.....then let 'er rip!

Sat, 04/30/2011 - 13:56 | 1224194 Seer
Seer's picture

So much to do, so little time...

Sat, 04/30/2011 - 14:07 | 1224210 treemagnet
treemagnet's picture

you got that right - I've been spending alot of time at and learning loads of shit.  great place with alot more civility and courtesy....of course, this is fight club....

Sat, 04/30/2011 - 14:36 | 1224259 Seer
Seer's picture

Good that you're digging in the right places :-)  I didn't get exposed to Martenson until a long time after I'd seen the light: but, he's really good at presenting it all.

I'd offer that the best bit of wisdom is that one should look more to BE than at what others are or are not: spend energies on being what's right and let what's wrong take itself out of the game.

Yeah, I'm not a bit fan of fight club.  As I've noted on many occasions, I come here to see if people are getting "it."  And some of it is an attempt at conditioning (educating) folks in the hopes that they watch out for being programmed to scapegoat others (I've got a wife whose skin isn't white, and who is, at this time, only a "resident" to the US [though she hauls in income from outside the US]).

Have land... have water... have tractor... have financial position reasonably hedged (thanks to years of frugality [no inheritance, no lottery, no social-climber income)... garden is underway... animals coming.  Friends welcome.  Help and get fed, all else get lead...

Sun, 05/01/2011 - 06:26 | 1225162 Dr. Impossible
Dr. Impossible's picture

"spend energies on being what's right and let what's wrong take itself out of the game"


your whole post isn't just wisdom...but genius in words...thats exactly how these battles will be won.

"And some of it is an attempt at conditioning (educating) folks in the hopes that they watch out for being programmed" 

KNOWLEDGE IS Seer...may be the biggest, badest fighter here, if you understand employing what you have spread in this post.


Sat, 04/30/2011 - 15:34 | 1224341 Waterfallsparkles
Waterfallsparkles's picture

Greenhouse.  What a great idea.  Grow your food all year round.

I do not grow a garden because the Deer eat it.  Except they usually do not eat zukini but tomatoes, they eat the plant before it gets a chance to grow.  But, a Greenhouse, that would solve the problem. Have to look into the idea.

Sat, 04/30/2011 - 15:47 | 1224362 Seer
Seer's picture

Deer... you want to make your garden smaller than your neighbors! :-)

They no longer come around the homesite now that we've got a dog.

Best "solution" that I've read about is to build two-layer fences.  Basically one fence inside the other, offset (gap) of a few feet (not sure how many).  Apparently this presents a depth-perception problem to the deer and they turn away.

Greenhouses are good for starting or finishing (season extending).  Have to worry about them holding up (UV) or blowing away.  And they can be a bit pricey: yeah, so can creating double fences, but on a per-foot basis the fencing "solution" is far less expensive (if one is talking only about protection [not season extending]).

Sun, 05/01/2011 - 09:57 | 1225307 FEDbuster
FEDbuster's picture

My neighbor has 1/4 acre garden with an 8 foot fence around it.  That takes care of most of the ground animals.  Then he covers the raised beds with fabric to deter the flying ones.  Still has to deal with gophers and bugs.  A greenhouse provides a controled environment, inexpensive solutions can be found all over the Internet.

Sat, 04/30/2011 - 17:07 | 1224442 slewie the pi-rat
slewie the pi-rat's picture

hey, wfs!  i'm a guy, but found that peeing outside around the garden, trails, &tc "marked my territory" pretty well. 

i got the idea long ago, when i saw ads for "mountain lion scent" in a growers' supply ad.  turned out, i was as weird as a wildcat.

Sat, 04/30/2011 - 17:14 | 1224448 Seer
Seer's picture

Piss isn't anything to piss at!  Also contains nice amounts of nitrogen: dilute to 5:1* and apply diretly to the garden.

* I've seen the ratio stated as low as 3:1, but I think that 5:1 is what is likely the better target.

So... the next time someone tells you to piss off just consider it a nice gesture :-)

Sat, 04/30/2011 - 17:22 | 1224460 slewie the pi-rat
slewie the pi-rat's picture

a pissing contest?  @ fight club?  Hahaha

Sat, 04/30/2011 - 13:39 | 1224154 Jovil
Jovil's picture

The IMF sees China's economy overtaking the US.

Sat, 04/30/2011 - 13:48 | 1224185 Gold 36000
Gold 36000's picture

quit spamming this place with stuff that was published on zero hedge a few weeks ago.  You are way behind, you stupid fucktard.

Sat, 04/30/2011 - 22:10 | 1224804 buzzsaw99
buzzsaw99's picture

newbs have to fight.

Sat, 04/30/2011 - 13:42 | 1224156 Gold 36000
Gold 36000's picture

Short squeeze Bill and do good in the market at the same time?  This is reform I can get behind!

Sat, 04/30/2011 - 13:42 | 1224159 New American Re...
New American Revolution's picture

If you take the time to read between the lines Gross writes you will find that he sees and operates in a very different world than the one most people on this earth are even remotely aware of, a view which crosses far more over into Descarte's spiritual world than the physical world, but a spiritual world which in truth, dominates the physical world.

It's a monumental task when you consider that PIMCO must not only devine the proper course to survival, but must be able to anticipate the attacks which must invariably come after him, as he alludes to and confronts the Beast.

It's a dangerous game but one that must be fought.   The problem is that one cannot share the truth about the lies else be branded a lunatic or worse, which would be the end of either PIMCO, Gross, or both, a loss we cannot afford at this critical juncture in time.

Sat, 04/30/2011 - 22:15 | 1224811 web bot
web bot's picture

Gross is a #uckin genius... and your comments are spot on.

I don't know how many people recognize this but when he is on tv (CNBC) and a panel is there, you can hear him making odd sounds in his throat (u, and ug) sounds. This is classic of a person with some form of Turrets or disorder. Gundlach also has similar traits that I've observed with his body language movement.

I know people like this and one quality that they all have is that they are brilliant... likely a consequence of their disorder.

Your comments are insightful.

Sat, 04/30/2011 - 13:46 | 1224172 ReallySparky
ReallySparky's picture

And all Gross has to say is...."GOLD".  This war of the titans will be very interesting.  Seems as though Gross does not want to be left holding the bag, when these villiams decide game over.

Sat, 04/30/2011 - 17:59 | 1224513 silvertrain
silvertrain's picture

thats the magic word..

Sat, 04/30/2011 - 13:47 | 1224174 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

...Imperialistic American Empire...Renouncing Empire...

Sat, 04/30/2011 - 13:45 | 1224175 dalkrin
dalkrin's picture

Huh?  People still buy ponzi-bonds?  I guess they are soothed by the words of our dear leader The Bernank.  Timmeh is his indefatigable sidekick.

“More generally,” the group added, “the prospect of persistent settlement fails at a high level can cause market participants to temporarily withdraw from the market, or even exit the market, adversely affecting market liquidity and stability.”

Hmm, how stable will this market be when there are no more willing participants?  Come on now, be patriotic and buy American bonds, your government depends on you!

Sat, 04/30/2011 - 13:54 | 1224189 Seer
Seer's picture

"People still buy ponzi-bonds?"

Everything is a Ponzi (because it's based on perpetual growth on a finite planet), but why bonds have staying power is ONLY due to the fact that the US has superior "enforcement" power (for now).

We're playing Russian Roulette, only none of the gun's cylinders is empty...

Sat, 04/30/2011 - 14:24 | 1224242 trgfunds
trgfunds's picture

Yeah, hilarious how ZHers are so US/Treasury centric when referring to "ponzi" this or "ponzi" that. You guys should really learn how to do something else besides take a word and run with it. All other countries governments are the same or worse than the US. The entire market and everything based on speculation or future growth is a "ponzi". So everyone shut up. This is old news.

Sat, 04/30/2011 - 21:46 | 1224769 i-dog
i-dog's picture

"All other countries governments are the same or worse than the US."

So what? That doesn't excuse it at all. "Others are robbing more banks than me" won't cut it as a defense in court.

Investing in productive corporations to gain an interest return is one thing ... investing in government bonds - where the interest return can only come from fleecing more taxpayers - is quite another. One is a pure ponzi, the other is where productive advancement of the human condition arises.

Sun, 05/01/2011 - 04:01 | 1225093 RichardP
RichardP's picture

If corporations are increasingly productive such that they can pay an honest interest return, they will also pay more taxes (in a perfect world).  Would the interest return on bonds not come from this increase in tax payments, rather than from fleecing more taxpayers?

One can be pure ponzi and the other productive advancement.  But they aren't necessarily so.

Sun, 05/01/2011 - 05:10 | 1225129 i-dog
i-dog's picture

In the case of government, if it can, it will.

Sun, 05/01/2011 - 00:14 | 1224951 RichyRoo
RichyRoo's picture

" This is old news." .... I'm glad you agree with us after all.

Sat, 04/30/2011 - 14:41 | 1224260 I am Jobe
I am Jobe's picture

U.S. Govt is trying to shift investors into more risky assets as the true inflatin rate increases to 8%. The underlying objective is to then crash the markets so that FDIC has less liability. The U.S Bonds are Junk bonds. There will be no liability on the U.S. Govt if investors lose everything in the stockmarket that the U.S. Govt is steering investors into due to their out of control policy

Sat, 04/30/2011 - 15:39 | 1224351 Seer
Seer's picture

There's going to be a wreck, does it really matter what color the car is?

Unfortunately people will blame all kinds of shit (and get it completely fucking wrong) and, as a result, perpetuate the very thing that they rail against.

Sat, 04/30/2011 - 17:33 | 1224473 malek
malek's picture

Propaganda 101:
If you can't deny something, redefine the expression or the range it covers: "But... everything is a Ponzi!"

Ponzi, the (new?) normal. What are we actually fighting for?? Or against??

Sat, 04/30/2011 - 23:38 | 1224911 RichyRoo
RichyRoo's picture

I noticed that too, pretty childish attempt at PR

Sat, 04/30/2011 - 14:19 | 1224181 slewie the pi-rat
slewie the pi-rat's picture

i'm ok w/ MAD, but TBAC should be the tobacco lobby and TMPG should be about hybrid car standards, dammit.

maybe gross started selling when the bonds were @ 134 and only told us abt it when they were @ 118.  or:  did he gordon brown?  everybody know when you you get into bonds, you buy them on a dip and die with them.  they are the ultimate keynesian tool. 

this stuff abt the delivery failures is bull shit.  the FED buys $1.25 Tril of utter crap for top dollar, and now this causes a shortage of product? 

i smell the muslim brotherhood.  what the hell?  let's go for it, shall we? if we're gonna do WWIII with the Weapons of Fiat & Ponzi, let's be consistent. 

ok.  and HAARP.  i'm in!

call me cra-Z, but it's gold & silver US coins & supplies, either way, or both.  and, on the third hand...

Sat, 04/30/2011 - 14:12 | 1224218 Everybodys All ...
Everybodys All American's picture

There is not a vile enough word in the dictionary to describe Geithner and Bernanke.

Sat, 04/30/2011 - 14:28 | 1224249 jdamoore
jdamoore's picture

looking at this short clip on YouTube…

theinternationalperspective: ... his eyeballs independently and frantically clamouring skyward, then this way and that, as if they’d rather exit their sockets than permit any possibility of eye-contact with an audience member while the brain and mouth engage to spout forth repulsive nonsense on Dollar. Does this look like an honest and intelligent adult man – truly confident in what he’s saying?

Sat, 04/30/2011 - 14:44 | 1224267 I am Jobe
I am Jobe's picture

The rat bastard is lying and I agree no eye contact with the camera at all. Shows how fucked up Treasury Dept is and has become. The bitch needs to be taken to the woodshed.

Sat, 04/30/2011 - 16:05 | 1224385 RockyRacoon
RockyRacoon's picture

"...foreign economies have an inflation problem because they are growing so rapidly..."

Now there's a guy who understands what's going on -- NOT!


Sat, 04/30/2011 - 14:43 | 1224263 I am Jobe
I am Jobe's picture

Danger Will Robinson, Danger, return to the ship , Please hang the bastards at the FED Reserve and Treasury.

Sat, 04/30/2011 - 16:09 | 1224387 RockyRacoon
RockyRacoon's picture

Not quite the danger he had in mind, eh?

Sat, 04/30/2011 - 17:38 | 1224485 CitizenPete
CitizenPete's picture



Sat, 04/30/2011 - 14:55 | 1224284 and so on...
and so on...'s picture

Hey Bill! Didn't your mother ever teach you not to bite the hand that feeds you?

Sat, 04/30/2011 - 16:04 | 1224382 Strategery
Strategery's picture

Geitner was with Fed, and our President was dumb enough to put a Fed cronie in charge of the Treasury. Why would a sane president put a fox in charge of the henhouse. The good news is that Geitner, like his brother Bernanke, only lies when he moves his lips.

Sat, 04/30/2011 - 17:20 | 1224390 Seer
Seer's picture

Geez, people, get it through your thick skulls that just because things are going favorable for YOU that the people in charge are stupid.  I assure you that what they SAY may sound stupid, but what they DO isn't.  They are doing exactly as their handlers have commanded them to do.  And, really, given that the entire system is predicated on a Ponzi, how can anyone believe that a symptom is the cause/root?

Sat, 04/30/2011 - 17:40 | 1224482 CitizenPete
CitizenPete's picture

+10 Seer - Your correct.

It's not a bug, it's a feature. 


...Like TP Obummer had a choice to put Timmah the IMF Governor of the US (a.k.a.: U.S. Sec. of Treasury). GMAFB

Sat, 04/30/2011 - 16:20 | 1224403 Hansel
Hansel's picture

Stuff like this makes me want to go nowhere near bonds until these people finish with their pissing matches.  Blech.


Sat, 04/30/2011 - 18:06 | 1224518 banksterhater
banksterhater's picture

Geithner: ROT IN HELL next to Bernanke.

Sat, 04/30/2011 - 18:04 | 1224520 banksterhater
banksterhater's picture

Geithner: ROT IN HELL next to Bernanke.

Sat, 04/30/2011 - 21:53 | 1224605 Dr. Impossible
Dr. Impossible's picture

Dear Bill Gross,

If you are reading this, as i expect you are. I wish to offer to you my time and energy on a voluntary basis, with the sole condition that PIMCO/Bill Gross employs a minimum of 1 American with an income above poverty. I have spent more than 15years volunteering my time to a small group of  market traders(liquidity providers). Heck, one of the guys actually owned an exchange back in the day. I have found my niche' is, short term trend analysis, intra-day technical chart reading, and leveraged inverse risk modeling. I wish to offer a completely, and utterly  non-politically correct mentality. Hence,i could never ask for compensation for my time. My only wish is to offer you a below-the-belt,kick'em beat'em, drag'em in the street researcher, with intent. I can offer, and express a "I WILL NEVER PLAY FAIR" perspective, which maybe of a near term value to you, and your team.

One concept I have to put forward. Head to China, open a mint pouring eagles stamped ...made in China. Then sell them as art..or artifacts.

As my own father refers to me as "The Great White Tornado", my knowledge maybe of use. Contact me anytime day or night.

                                                                     Dr. Impossible....till it happens

Sat, 04/30/2011 - 19:37 | 1224608 f16hoser
f16hoser's picture

Take your money out of the system and buy Silver. At least that way they can't margin your money(future) 100:1. Fuck Geithner, Gross, Soros, Buffet, Bernanke, Dems, Repubs, All Billionaires for that matter. They have sucked money and the future savings of Americans for decades and now there's not much left. They have to start sucking each other now and it pisses them off. Precious Metals and no debt is how you fight them toe-to-toe. Lace up the gloves, put down the Visa card and lets go to work!

Sat, 04/30/2011 - 20:55 | 1224696 ZackAttack
ZackAttack's picture

Fuck 'em, let 'em fight it out to the death. Two problems solved.

Sat, 04/30/2011 - 22:08 | 1224800 web bot
web bot's picture

If you watch Geithner on TV when he talks, this guy is as mean as rat shit. He snarls when he talks, is full of himself and is condescending.

Gross is several levels above this sock puppet... and don't underestimate Gross' ability to settle the score in his favor.

Sun, 05/01/2011 - 00:31 | 1224969 RichyRoo
RichyRoo's picture

Agreed ... Way I see it, Gross has just put the pensions of several million Americans on the train tracks in front of QE3. Debt ceiling is one thing, and if we have QE3 dollar is going to tank even worse than it is now. I'm pretty sure the US branch of the PTB contain some dollar hawks amongst their number, whatever they may claim in polite company.

Also, any idea how much PIMCO has lost on the DXY last week or so?

Sat, 04/30/2011 - 22:11 | 1224809 buzzsaw99
buzzsaw99's picture

Everyone should pay a substantial penalty for fail to deliver. Otherwise they might be tempted to sell something they don't have. Does this also apply to the crimex?

Sat, 04/30/2011 - 22:30 | 1224827 FischerBlack
FischerBlack's picture

Agency bonds are basically treasuries now, so they should be treated as such -- fees and all. I'm fine with that. But truth is, it's not going to hurt PIMCO at all. They'll just raie their fees, as will everyone else trading in the space, and ultimately the investor will pay for it.

Sun, 05/01/2011 - 00:45 | 1224981 AldoHux_IV
AldoHux_IV's picture

So the fed and treasury are manipulating more of the market-- it onoy digs these assholes deeper into the ponzi and it's clear that Geithner needs to be stopped as much as Satanke.

Sun, 05/01/2011 - 01:13 | 1224998 cranky-old-geezer
cranky-old-geezer's picture

Folks, from now on it's print till the presses burn up, then bring in new presses and keep printing.

There is NO other way. 

CONgress is NOT going to cut spending. 

The economy is NOT going to recover.

TBTF banks are not going to tolerate lower bonuses. 

Sun, 05/01/2011 - 07:46 | 1225205 savagegoose
savagegoose's picture

hey gross, aint you heard the battle cry? get gold.

Sun, 05/01/2011 - 11:39 | 1225480 glenlloyd
glenlloyd's picture

It really should be TBAG - Treasury Borrowing Advisory Group

Do NOT follow this link or you will be banned from the site!