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Guest Post: Is The Fed Funding The Treasury Through The Banks?
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Fed balance sheet - Is the Fed funding the Treasury through the banks?
Recently I decided to take another look at the Fed's balance sheet, and while I am none too surprised, I must report that the Fed has printed approximately $200B from April 7th 2010 to June 30th 2010. What is interesting is *how* they went about doing it.
Here is the graph which shows this. The blue line represents the total increase in the size of the Fed balance sheet since September 10th 2008. The red line represents the marginal increase in the Fed balance sheet, net of 'Excess Reserves' held at banks but not yet loaned out, and net of Treasury sterilization:
Note that from November 2008 through April 2010, "Real Economy" printing was essentially the same. Sometimes it grew, but inevitably those periods were reversed. The Fed was clearly targeting that figure. Well, something changed as of April 7th 2010.
That date should ring a bell. It is almost exactly right after the end of the Fed printing programs, which finished up at the end of March. From their 3/16/2010 FOMC statement (FRB):
To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month... In light of improved functioning of financial markets, the Federal Reserve has been closing the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities and on March 31 for loans backed by all other types of collateral.
So as of March 31st 2010, all money printing programs and all special liquidity programs were over and done with, except for CMBS TALF. And yet the *very next week*, this new wave of net printing was allowed to hit the market, after such printing was held constant for 17 months. Hmm!
Given that those programs have all ended, the next logical question is how this net printing has come about. The chart below shows Total Fed Assets, the Treasury Supplemental Liquidity Program, and Excess Reserves in the banking system:
Below is another way of visualizing the Fed's balance sheet, splitting up assets into securities purchased outright by the Fed, versus liquidity measures:
Both have essentially gone flat.
What we see is that Bernanke has indeed stopped those programs for all intents and purposes. The net printing shown above has come through a decline in bank Excess Reserves. Whereas before such declines in Excess Reserves were met by Fed sterilization through a shrinkage of the Fed's own balance sheet (for example, see May - July 2009), nothing of the sort has happened this time. That money is just being allowed to enter the system, period.
The next logical question is where the bank lending that has replaced the Excess Reserves is heading. Well, we know it is not hitting the consumer debt market, given the latest Fed reports. Consumer credit has continued to shrink (ref), and the government is the only marginal lender (chart). And just ~20 days later, risk assets began falling hard. It seems doubtful that they are ramping up risky lending at a time like this.
My theory is that the money has floated into the Treasury market. A lot of people have wondered how the Treasury would be able to continue running record deficits without the Fed buying. Well, we now know that the banks are picking up a lot of slack in the lending markets, and they are doing so in the midst of very dicey market conditions. Is it that much of a stretch to posit that the Fed reached an agreement with them whereby the banks would take over where the Fed left off?
If this is true, Bernanke is talking a good game while continuing to dole out free booze. The guy is doing what Krugman is saying without openly acknowledging it. I am amazed that no one is talking about this!
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Does anyone else think American horse racing is fixed? I get TVG (horse racing channel showing Monmouth, Belmont, Hollywood, etc.), and started betting on the races a bit. What I noticed is that if you have two or three horses in contention for the win within about 1/8th, 1/16th, or a hundred yards of the wire, often, one of the jockeys will be as still as a statue, not moving a muscle, not pushing with his arms, no whipping, nothing (usually the horse I bet on). The other jockey will be whipping the horse, furiously pushing (scrubbing) on the horses neck, and working like mad to get his horse to the finish line first. This is the horse that wins. I've been watching a lot of races, and I gotta tell ya, it certainly looks like one jockey is trying to win, and the other is trying to lose. On the other hand, when I watch horse racing in Australia, all the jockeys are working like mad to win the race, and, there, you often see horses winning at big odds. In the US, its rare to have a high price winner. I'm guessing people in the know in the US bet down the winners, and the jockeys make sure things turn out that way. Just a wild speculation.
Good metaphor for the stock market, currencies and PMs.
The only way the fortunes that have been made by a few is to "Fix" the race, and that goes for the infamous Soros' shorting of the pound a while back.
Behind every great fortune, is an undiscovered, or more likely, unprosecuted crime, in which those who could bring the the lawsuit have been bought off with the proceeds.
It's called kiteing when I write check from one account deposit in another and try and cover it or bounce it back to the original bank before I get a call from the bank manager. It's illegal unless you get into the billions and trillions I suppose.
Re: "I am amazed that no one is talking about this!"
That's odd- being that this has been a hot topic all year & 2009 as well. Just google ZIRP. You can find a lot of this data from the St. Louis Fed website too.
"My theory is that the money has floated into the Treasury market. A lot of people have wondered how the Treasury would be able to continue running record deficits without the Fed buying. Well, we now know that the banks are picking up a lot of slack in the lending markets, and they are doing so in the midst of very dicey market conditions. Is it that much of a stretch to posit that the Fed reached an agreement with them whereby the banks would take over where the Fed left off?"
Does "banks" include edge funds, mutual funds.
They are going to "cash" in high numbers.
In order to go to "cash", they must take advantage of upticks of the stock market.
A few well connected funds at a time with every upticks and the stock market doesn't panic to the exit.
jal
The big, bad bankers may be making gobs of money via the U.S. Treasury carry trade by borrowing from the Fed at near zero rates and investing the cash in higher interest Treasuries.
But the Fed is consuming the essential foundations of the economy by terminating interest payments, via below-inflation rates, to the other holders of the national debt. While it is indirectly assisting the big bankers, it is hurting individual and institutional bondholders in the private sector-- the millions of people losing on their insurance policies, personal investments, and retirement plans.
The Fed and its Congressional enablers are helping to wipe out the economy in one fell swoop.
Below are the Biggest Holders of US Gov't Debt, presented in a slide presentation by Paul Toscano
(Updated 15 June 2010)
As the US government spends an unprecedented amount of money to fix the nation's economy, there is an equally great need to raise the cash to pay for it. This is accomplished through borrowing, whereby Uncle Sam sells Treasury securities of varying maturity.
For investors, the government bills, notes and bonds are considered a safe financial product because they have a guaranteed rate of return, based on faith in future US tax revenues. The government has been partially funding operations via Treasury securities for decades.
This borrowing adds to the national debt, which has climbed above $13 trillion and is rising every day. Much of that debt is held by private sector, but about 40 percent is held by public entities, including parts of the government. Here's who owns the most.
15. Taiwan
US debt holdings: $126.9 billion
Taiwan's holdings of US debt have been on the rise over the past year, up over 60% from one year ago, leapfrogging Russia in total holdings. To date, Taiwan holds $126.9 billion in Treasury securities, compared with Russia, whose holdings stand at $113.1 billion.
14. Hong Kong
US debt holdings: $151.8 billion
Hong Kong is one of the world's largest holders of US debt, as its holdings have surged, nearly doubling from April 2009 from a level of $80.9 billion to $151.8 billion currently.
13. Caribbean Banking Centers
US debt holdings: $153.2 billion
The US Treasury identifies this group as institutions in the Bahamas, Bermuda, the Cayman Islands, Netherlands Antilles, Panama and the British Virgin Islands. Holdings are currently listed at $153.2 billion, up from $106.6 billion in June 2008, but remains off the group's high of $213.6 billion in March 2009.
12. Brazil
US debt holdings: $164.3 billion
The South American economic giant has $164.3 billion in holdings, according to the Treasury. Brazil’s investment into US debt has been fluctuating slightly over the past two years, with current holdings testing a high of $170.8 billion from Feb 2010.
11. Depository Institutions
US debt holdings: $206.6 billion
As of the fourth quarter of 2009 (the most recent numbers currently available), the Federal Reserve Board of Governors lists depository institutions as holding approximately $206.6 billion in US debt. This group includes commercial banks, savings banks and credit unions and has almost doubled from Q4 2008, where holdings stood at $105 billion.
10. Insurance Companies
US debt holdings: $235.7 billion
According to the Federal Reserve Board of Governors, insurance companies hold $235.7 billion in Treasury securities. This group includes property-casualty and life insurance firms.
9. Oil Exporters
US debt holdings: $239.3 billion
Big oil means big money... and big investment into US debt. Included in the group of oil exporters are Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. The group combines for a total of $239.3 billion, which is a slight increase from the $190 billion - $220 billion range they have maintained in recent history.
8. United Kingdom
US debt holdings: $321.2 billion
Britain currently holds $321.2 billion in US debt, but the country's investment has fluctuated dramatically throughout the past 2 years, currently at its all-time high (and rapidly increasing) the UK's holdings were as low as $55 billion in June 2008
7. Pension Funds
US debt holdings: $513.1 billion
Pension funds control large amounts of money, reserved for personal retirements, and thus are obligated to make relatively safe investments. This group includes both private and local government pension funds, totaling $513.1 billion. The private pension fund category also includes US Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan "G Fund."
6. State and Local Governments
US debt holdings: $531.3 billion
US state and local governments have over a half-trillion dollars invested in American debt, according to the Federal Reserve. The level of investment has remained very stable over the past three years, moving within the range of $531.3 billion and $550.3 billion from 2006 to 2009, and although the amount has been increasing, the total value of holdings are off the highs.
5. Mutual Funds
US debt holdings: $663.9 billion
According to the Federal Reserve, mutual funds hold the fifth largest amount of US debt compared to any other group, although mutual fund holdings have diminished by more than $105 billion since December 2008. Including money market funds, mutual funds and closed-end funds, this group of investments manages approximately $663.9 billion of US Treasury securities as of December 2009, which are the most recent numbers available.
4. Japan
US debt holdings: $795.5 billion
A major US trade partner, Japan holds a huge amount of American debt, and has traditionally been one of the US's largest debt holders, currently owning $795.5 billion of treasury securities.
3. China
US debt holdings: $900.2 billion
The largest foreign holder of US Treasury securities, China currently holds $900.2 billion in American debt, a number which has risen every month since February 2010.
2. Other Investors/Savings Bonds
US debt holdings $1.193 trillion
With the most recent numbers from March 2010, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts, estates, savings bonds, corporate and non-corporate businesses for a total of $1.193 trillion.
Although the level of debt held in U.S. savings bonds has remained basically constant since 2000, the broad category of "Other" investors has nearly quadrupled since reaching a four-year low in December 2007.
1. Federal Reserve and Intragovernmental Holdings
US debt holdings: $5.259 trillion
That’s right, the biggest holder of US government debt is actually within the United States. The Federal Reserve System of banks and other US intragovernmental holdings account for a stunning $5.259 trillion in US Treasury debt. This is the most recent number available (March 2010), but is off its all-time high in December 2009.
About a decade ago, the total government holdings were "only" $2.5 trillion.
http://www.cnbc.com/id/29880401/The_Biggest_Holders_of_US_Government_Debt?slide=16
"..........As the US government spends an unprecedented amount of money to fix the nation's economy....."
You seem too knowledgeable to believe that is what they are doing.
They are "fixing" alright, but it ain't the nation's economy.
That is if you believe the Fed is a US based institution.
http://www.save-a-patriot.org/files/view/whofed.html
While it wouldn't surprise me one little bit if this were true, what is the source of this information? We all know that a concentrated group of big players are manipulating the show, but the who's who is very opaque.
I care not for sources and accuracy but instead controversy and conspiracy theory.
Just kiddin. There's a lot of material available on the subject online. Read and decide for yourself. I don't think anyone has cracked the real ownership question behind the Fed but it's allusiveness is intriguing.
John Moody in an article in McClure’s Magazine, entitled “The Seven Men,” wrote in August of 1911:
“Seven men in Wall Street now control a great share of the fundamental industry and resources of the United States Three of the seven men, J.P. Morgan, James J. Hill, and George R. Baker, head of the First National Bank of New York, belong to the so-called Morgan group; four of them, John D. and William Rockefeller, James Stillman, head of the National City Bank, and Jacob H. Schiff of the private banking firm of Kuhn, Loeb Company, to the so-called Standard Oil City Bank group…the central machine of capital extends its control over the United States…”
“What John Moody did not know,” according to Eustace Mullins in The Secrets of the Federal Reserve, “or did not tell his readers, was that the most powerful men in the United States were themselves answerable to another power, a foreign power, and a power which had been steadfastly seeking to extend its control over the young republic of the United States since its inception. This power was the financial power of England, centered in the London Branch of the House of Rothschild. The fact was that in 1910, the United States was for all practical purposes being ruled from England and so it is today. – 1983
Johnny Silver Bear of The Silver Bear Café recently posted an article from which I quote: “The Federal Reserve Act was the brainchild of Baron Alfred Rothschild of London.
http://www.silverbearcafe.com/private/rothschild.html
These are just two of many sources, as said. It's telling that at the time the Federal Reserve Act was authored in 1913 by Paul Warburg , partner in Khun Loeb and Co. and a recent immigrant from Germany, “the public debt was almost nonexistent.”
anony and ozziindaus—I agree wholeheartedly.with your points. Those are Toscano’s views—which I repeated to let him define the parameters he used. I now see I did a poor job making that clear... But I’m with you. BTW, here’s his bio…
Paul Toscano is a producer for CNBC.com, writing articles and working on special features for the website. He also manages the "News By Topic" section of the CNBC home page and has produced web content for Mad Money, Fast Money and On The Money. Prior to working for CNBC.com, he was an Associate Producer for CNBC's primetime programming, working for The Big Idea with Donny Deutsch. He graduated in 2007 from Colgate University.
All this means is that there is plenty of liquidity to drive risk assets higher. Low volume meltup coming right up.
Are you seriously in-charge of old people's money / retirement funds? Seriously?
I dunno, Leo. John Williams of Shadowstats Friday told subscribers in his latest newsletter that “the economy has entered a phase of re-intensifying downturn…consistent with signals of pending business deterioration that have been seen in collapsing measures of broad systemic liquidity.”
Regarding the consumer liquidity squeeze, he said: “The structural problem driving the current business downturn—a liquidity-impaired consumer—shows no sign of improvement. Real household income remains too weak to support sustained positive real economic growth, by itself, and consumer debt-expansion that could help make up the consumption downfall generally is not available.”
http://www.shadowstats.com/
This fits in with the LA Times report Friday that “Intuit Inc., which provides payroll services for small employers, says the nation's tiniest companies had fewer new hires last month than any time since October… using payroll information from its 56,000 small-business customers…with fewer than 20 employees.”
Said Calculated Risk: “According to surveys by the National Federation of Independent Business (NFIB), the problem isn't lack of financing or government regulation - the problem is a "shortage of customers".
http://www.calculatedriskblog.com/2010/07/small-businesses-still-reluctant-to.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29
Just some more additional backdrop to add to Don’s excellent research …
I have to agree with Leo on this one. Here's a SPY chart that shows we are now above the 20-day ma (red) after a hammer candle on Thursday, and bullish Friday, despite low volume, the head & shoulders breakdown could very well be negated at this point, with sideways-up consolidation.
http://www.stockta.com/cgi-bin/analysis.pl?symb=SPY&mode=table&table=ema...
How many really believe we will see a revaluation of gold? When America finally bites it will the world pick up with a basket of currencies and free-gold? Or are the Chinese working a deal with the US to be part of a global system and gold will never have its day.
They bite it with the USA or before we do because all currency is FIAT. Yes, we will see a Gold and Silver moonshot.
This comes as no surpise to me as every other business has caved into OBAMA so why not especially the banks. The intimidation factor directly or indirectly is there and every CEO has sold America out by caving. When I hear Kudlow this AM talk about it makes me laugh that he thinks CEO's are turning on govt expecially when it comes from that Jeff Emelts mouth.
One other thing liberals have the attitude that the so called rich should bear a bigger burden to society. What better way to do so than to spend us into oblivion and leave the people with any money left with bill. You think the poor will pay any of it back.....like their credit cards and mortages? Please its jsut another back door redistribution scheme.
"Please its jsut another back door redistribution scheme."
..............hmmmm............ so does that mean that the bail out of the wall street crime cartel was a front door redistribution scheme, or more appropriately, maybe just another tasty tidbit of lavish corporate welfare on a more meaningful scale????????
but what happens when the ability to maniplate the intrinsic value of currency falls into the wrong hands?
-Opie
Can a currency have intrinsic value?
Yes, when it's backed up with big guns and a $14T economy
Aunt Bee tells me that the ability to change the intrinsic value is the constant, birth right incentive, that allows the powerful to maintain their power and become even wealthier in any economic environment, totaly free of risk (especially a deflationary one). She also tells that the 'big rub' is to attempt to set the "value" where most lower classes are thinking of things other than out and out revolt. And that is what the Fed and Banksters are seeking to do now..
Aunt Bee didn't really say "Banksters" - I threw that one in myself.
Did you happen to get Floyd the Barber's take on this?
Floyd and Otis the Town Drunk side with Aunt Bee, while Goober, who watches CNBC too much thinks quantitative easing will do the trick and not cause undo harm to poor innocent unsuspecting bastards. Andy and Thelma think they will still be allowed to keep their State jobs, mostly because the powerful still consume and need shit.
I may have misquoted Goober and Andy exactly, but that was the gist of it.
-Opie
Does anyone know how hundreds of trillions in derivatives is created?
It's definitely a bigger question than how the Fed prints money, isn't it?
maybe all of this focus on the fed and treasury is a fun distraction.
Derivatives are created the same way $s are created, out of thin air. It's all ones and zeros on someone's balance sheet.
But they dwarf everything else. Some say $600 trillion, maybe more.
Unless no one expects these obligations to be honored (?) or can point out why they don't count because maybe they don't provide leverage or liquidity or can't be traded for dollars, aiming at the Fed and Treasury is like firing bullets while there's a helaton nuke hovering over our heads. Or, maybe I only see a nuke because I don't understand these things?
Bless Ron Paul's heart, however, I'm way in the dark here looking for some light on this topic and sometimes wonder if the Fed is the fall guy.
Everybody is in the dark on derivatives. The size of the swap market is too large to phathom. There is no way they net to zero. Exposures have to be massive. In credit land the average CDS has a five year life. If the Feds can keep the ponzi scheme going for a couple years in would serve the purpose of allowing a large amount of no-money-down, per-crash CDS to mature w/o creating havoc. But derivatives may well be a hyper-levered time-bomb for the financial system. The traders at banks that create them don't give a crap about what happens in five years. It is all about getting paid THIS year...
I was researching a mutual fund today, a Senior Floating Rate fund, going thru all their bonds on the sec.gov, at the end they had CDSs bought in 2007 for $4 Bil that are valued at $2 Bil today, and they classified as "unrealized depreciation". An Oppenheimer fund. What's that for? This must be standard "insurance" that never gets paid? I wouldn't buy the crap. Besides, they had $55 Mil Chrysler worth $600K in default. On the face, a floating rate fund paying 4.8% looks good, but I look under the hood.
It's a crazy upside down pyramid that fades into a dark abyss...
Another question, if so many are losing or may go bust because of dark derivatives, who is winning? Are they designed to self destruct or to transfer wealth?
like nuclear weapons and mutual assured destruction
in the arsenal of the bankers they just have to mention
them , whether they exist or not, to any politician or
other person and wha la, the banker is in the driver seat.
they are mainly a terrorist weapon used to create fear
and intimidation and render sovereigns impotent regarding any legitimate tendencies they might
have. the people have been imprisoned and impoverished and enslaved by them. "free market"
finance fraud gone global and ferral.
http://www.friendsofcoleridge.com/borges.htm
.
http://www.youtube.com/watch?v=IjlIEC8tr-A
.
time . . . . . . . . .
" Are they designed to self destruct or to transfer wealth?"
TRANSFER AUTHORITY AND POWER (wealth) from
everyone and everything to the BANKER. they have
the codes to the suitcase nuclear derivatives. who will
mess with that? like dr. strangelove, mad.
It's kinda like hiring a suicide bomber.
The retainer can appear to be large if factored over the long term but the term is not as long as it first appears when the detonation suddenly pre-dates and effectively concludes the term without notice.
The question should not be the size of the ordinance but instead who is ultimately financing the detonation and who will benefit when the explosives ignite?
http://www.ny.frb.org/markets/maidenlane3.html
Where's a Nobel laureate when you need him to prevent all this unstable nitro from pre-maturely exploding?
Maidenlane to make sure the right people get paid. Nice. They're only referring to billions of dollars though. What about the trillions?
What we see as "unstable nitro" (Western) may actually be well planned demolition (International). Knock the developed West down while simultaneously raising the developing nations up. "Equal" economic playing fields are easier to hook-up...not only economically, but socially and politically too.
Nobel's need not apply until after the events unfold to explain it in Oligarchic terms.
It's all ones and zeros on someone's balance sheet. - Balance Sheet! You gotta be kiddin me! Balance Sheet? Balance Sheet!
Some guy somewhere in a dark room in every bank, hedge fund, and corporation has the "real" balance sheet...and it doesn't look good.
This is just more fodder for my theory that we've turned a huge corner and are now staring at the rise of despotic global corporatism and a decline in the power of the State. The net net of the post-crisis world is one where the power of elite corporations over government is now irrevocably expanding. Begin with the notion of TBTF. That designation placed certain corporations above the laws of capitalism and even above the law of the land in general. They gained a privileged status and deal in secret with power interest in the government.
Now we're presented with evidence that they are irrevocably entrenched in financing government operations through the Fed. The Treasury is now dependent on the TBTF banks. The fact that all this is being conducted semi-covertly is also a menace in a free society.
Next take a look at what is happening with the Financial Reform Bill. Almost every proposal to reign in the power of financial corporates has been quashed, restrained or watered down to near oblivion. No Volcker Rule. No Lincoln amendment. The only token symbol is the formation of the oversight committee that in theory can vote to disband an entity deemed to be a systemic risk. But the vote has to pass by a super majority of the members. So it's neutered and is just an empty symbol.
Look finally at the oil drilling moratorium in the GOM. A 2 bit judge (who owns stock in oil majors) was able to place an injunction against an executive order! This week the Obama administration tried to go over his head at the court of appeals and they decided the injunction stands! The very power of the executive branch has been neutered by global corporates. A far cry from the days of the "imperial presidency". Even Jimmy Carter was able to levy a windfall profits tax on big oil. Couldn't happen today.
Simon Johnson has described this as a "financial coup d'etat".
You are just as accurate in your description of a "corporate coup".
Either way, a bankrupt government cannot be considered a "sovereign". It is a vassal to those with the funds to keep it operating.
The whole global system is fiat based credit/debt system. Whats stopping China or Russia from stepping out of the current fiat system into something more beneficial to the east? They must be planning to be able to do without the current system soon if the US is as bad as it is. I just keep feeling like we are seeing the final chapters of Americas economic dominance and a switch to something more palatable to the rest of the world. Will we see free-gold and free currencies regardless of what the FED Govt does? What would you all do if you were mid 20's willing to leave the country and had modest savings where would be the best opportunity for you?
check out australia - digging up the continent and shipping it to china. full employment over there, beaches, english, climate, no oil in the water, beaches. Fun place, I visited there 10 years ago. Asia is very cool, just went to China and Vietnam. Love being in that area of the world. Singapore would be another good choice, but australia/new zealand first for me. Put a oil free shrimp on the barbie for me.
http://www.bloomberg.com/news/2010-07-08/australia-s-employers-add-workers-for-fourth-month-as-economy-strengthens.html
Australian job growth capped the best quarter in almost four years in June, stoking the nation’s currency and stocks and heightening odds that the central bank will have to resume boosting interest rates.
The 45,900 increase last month exceeded all 22 forecasts in a Bloomberg News survey, a statistics bureau report showed in Sydney. The jobless rate held at 5.1 percent from the revised reading for May, marking the first time it’s below Japan’s level since at least 1978, according to data compiled by Bloomberg.
Yeah, Australia looks fantastic compared to depression-ville here in the US and most of Europe. It all looks so alluring while the credit bubble is inflating.
BTW, you mentioned "beaches" twice, but left out "bitchez".
Tyler, Don et al,
Superb job, I echo other comments here, many thanks for getting this information out - it helps to explain many of the 'inexplicable' things going on.
Thanks again.
DavidC
Yes. In other news, water is wet, bears shit in woods.
This has been going on for the better part of a year it's just that they used to take worthless collateral which we are still suing to find out the particulars to get the round robin going. This is just another variant with the same result all the money stays to the top of the system so the perpetrators of the fraud can continue with their bonsuses while the rest of us further down the food chain suffocate. Kind of like the way they are managing the oil spill I should say.
Did Bernanke ever start using mutual funds money market reserves in exchange for Treasuries? They floated the trial balloon. Couldn't he use Blackrock or such to repo that shortterm without telling anyone?
Ben Bernanke is a Bilderberger and member of CFR
Timothy Geithner is a Bilderberger and member of Pilgrims Society and the Trilateral Commission and the Council on Foreign Relations and a Trustee of the RAND Corporation
http://en.wikipedia.org/wiki/Guillotine
I bet a bill sent to the floor to be voted on to dismantle the PPT, would just about guarantee and answer to this question. Look who the PPT is made of, and you already have your answer. But for those who haven't a clue or aren't sure, just put a bill on the floor dismantling Reagan's thugs, and see which way the thugs in Congress vote. If they refuse the bill, then you have your confirmation. If they approve the bill, and within a month we are in dire straits and collapse, then your answer is yet again confirmation.
BTW, for those interested in what the Master sees:
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2010/Investme...
I am serious, I am asking for advice, can somebody give me their opinion on the safety of Treasury Bills 3mos. Could they be snatched bt the US Government during the next crisis?
Please advise.
If FED choose to expand its balance sheet to buy up the paper directly, much printing is required.
If FED works it through the banking system and its agents, it can use fractional reserve ratio to leverage the purchase. Also these agents can appear themselves as bidders.
Theoretically FED can be the only buyer and you should hand Krugman another Nobel Prize.
How can I start a bank?
How can I start a bank?
Banksters don't like competition. Closing banks is the trend. Good luck opening one and paying all of the regulatory thieves, I mean, fees. Lots of insurance, too, like derivatives.
Great reporting. Your findings have 20 times the consequence of Watergate, but will only receive a millionth of the notoriety
Read the headline only.
No. Shit. Sherlock.
...and don't forget, the Federal Reserve affiliates get 6% on 1% of their reserves as an expense charged to the US taxpayer...looks like boom time for the cartel as they continue to bloat the reserves of their pet bankrupt entities--does anyone ever see this crime being rectified?
Paulson went in front of the country and promised that there was no way he would let the banks be socialized--but instead, the country was fooled into handing over TRILLIONS to these bankrupt entities. IF there was ANY HONESTY in our leaders, they would have assured the public that the treasury can act as a facility for these failed entities for several years while we unwind the mess--this way lending does not have to be disrupted, people can keep their bank jobs etc....instead the money that could have gone to rebuilding our country's infrastructure went into the hands of the largest bond holders of these banks....the fact that the share price has recovered a little on the most OBVIOUSLY bankrupt bank (i won't name names) is in no way any way to help all of America...I pray for the a all of the captured elected officials to go to jail and stay there for a very long time.
Ok gone all day and yes , 'gasp', I have not read all the posts since I spent an entire afternoon watxhing high school lacrosse in the baking FL sun and decided to attempt to re-hydrate myself with 15 yr old single malt scotch......tin foil hat eaten by the dog......what if 'they' decide it's time to let the whole thing go? You know let the house of cards collapse (but well disguised of course)?....press the reset button. They have penty of cash stashed...the rumblings of the masses get to loud..collapse the system, then sheople only worry about food and bills. The banksters slowly emerge as the saviors, and build it back up....amazing how this sounds so much like the matrix...the anomaly must correct itself.
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i yai yai...
i think this that has been articulated has been referred to as the incest that produces the two headed vampire child, expressing an insatiable global imperialist appetite, adhering to the fascist doctrine of feeding on human flesh, ongoing. fiat dehumanization of the organic living man and his mind. bad stuff.
all to cover up desperate fraud sold as financial innovation in the name of careerism and greed.
careerism is what drives the show. the work or job
is of secondary importance to it's power to elevate
the careerist. always to further the survival
or growth of the institution as it has taken on a
life of it's own, it's original cause, quality and integrity
long ago forgotten. the institution, becomes the
breeding ground for the "insightful" and ambitious
careerist.
imo.
.
http://www.friendsofcoleridge.com/borges.htm
i yai yai.... i will try to fix it but... it may just get
WORSE...??
apologies for this repetition. i swear i didn't
do it. i only entered it once and then tried to
correct/edit and all this duplicate stuff happened.??
i yai yai.... i will try to fix it but... it may just get
WORSE...??
click the edit button on each one you don't want and erase all except for a little note about deleting for repeditive posts. It has been happening lately...TD et al will track down the prob eventually.
...
http://www.youtube.com/watch?v=USQva4zGX_g&feature=related
.
this . the android meme. some stuff to
think about. but, you can't put your finger
on it.
There's mounting evidence that central bankers have little faith in the greenback these days. Can we blame them?
http://wallstreet.blogs.fortune.cnn.com/2010/07/09/central-banks-start-t...
A rhetorical question, if there ever was one.
I wish we could search our own posts, because I called this one way back when, theorizing the next installment of monetization would be accomplished by the banks using their $1.2T of "excess reserves" - really only freshly pixelated FRN credits which were then allowed to "season" to become almost like real money. But it's not real money. Never was. Just created by a few keystrokes.
Better than that, it accomplishes the purpose of recapitalizing the banks by the taxpayers paying them the interest on the Treasury debt. Now that, is real money, since it comes from you and me and our hard work. Sweet, huh?
Come on you clowns, are T Bills safe? Or could they be swiped by Uncle O?
Can this kind of fraud go on forever? Will they just change the rules of the game and continue to fool everyone or will this whole thing come crashing down on us?
Updated DOW charts:
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
Most probably wrong.
Take a look at net FDIC institutions holdings ( http://www2.fdic.gov/SDI/SOB/ ). Current report is dated 3/31/2010, but total bank holdings of treasuries by all deposit taking institutions is a whopping total 156B. Where the banks -have- ramped up holdings is of US agency debt, up about 200B from 15 months before. I'd be surprised to see that number rise more than a handful of billion $ over to the 6/30 period. If the banks are doing what you say, that # will show up in the FDIC numbers.
And another indicator, REQUIRED reserves (which is the only # that rises to lower the excess reserves the Fed isn't actively sucking out by selling assets) is unchanged to lower since the Feb-March 2010 peak of total reserves. This means no money growth.
Likely, it's just pension funds, mut. funds, money managers, private investors, corporations, etc that have increased demand for treasury debt, holding the market up (as deflation prospects have risen).
A simple LOOKSEE here, shows the Outstanding amounts....think thier SPENT?.
Or, just being sit on............
I pick window 2.
http://bailout.propublica.org/list/simple
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