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The One Press Release That The S&P Will Never Issue

Tyler Durden's picture




 

It took less than 48 hours for the market to completely shrug off S&P's warning about America's credit rating, even as the dollar: that prima facie indicator of US stability and viability, has just hit a fresh 16 month low. And while nothing anyone says has much of a chance to impact the market, which continues to move with a negative 1 correlation to the now default carry funding currency, the following is the press release that S&P should issue if it wants to truly bring attention to the US debt crisis.

NEW YORK (Standard & Poor's) April 22, 2011--Standard & Poor's Ratings Services said today that it initiated ratings on the debt issues of the Federal Reserve System (commonly referred to as U.S. dollars) with a AAA/Negative Outlook.

We derive our opinion from the observation that the Federal Reserve’s assets consist of roughly $2.5 trillion of government debt with a deteriorating outlook against $52 billion in capital, thus yielding a leverage ratio of 48x.

In addition to its highly leveraged exposure to a deteriorating credit (the United States of America), the Federal Reserve’s stated strategy is to sell these securities back into the market (as a means of tightening policy).  In the event of future downgrades of the U.S., these securities are likely to generate losses in multiples of existing capital. 

The Federal Reserve intends to handle said losses via a ‘negative liability’ account, which makes them the liability of the United States of America.  This creates a very clear event horizon, or point of no return: downgrades of U.S. government debt generate substantial losses on Federal Reserve’s balance sheet, which then make the U.S. government’s debt larger than it was before the downgrade, thus creating a vortex of deteriorating credit.

If we were to lower the ratings on the U.S., we would also lower the ratings on the debt of the Federal Reserve, as well as our issuer credit ratings on all other individual GRE entities.

From John Lohman

 

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Wed, 04/20/2011 - 18:25 | 1190245 Worker Bee
Worker Bee's picture

Alternate reality.

Wed, 04/20/2011 - 19:02 | 1190368 Id fight Gandhi
Id fight Gandhi's picture

Will obama be on the trillion dollar bill?

Wed, 04/20/2011 - 19:21 | 1190426 FreedomGuy
FreedomGuy's picture

Of course! Geithner and Bernanke will be on the reverse. Based on the Weimar it'll buy you a loaf of bread!

Wed, 04/20/2011 - 19:42 | 1190468 Worker Bee
Worker Bee's picture

It will have an LCD screen and they can "adjust" the value as needed.

Wed, 04/20/2011 - 23:34 | 1191138 johnnynaps
johnnynaps's picture

Ahhha, Enron accounting standards! Where do we post ahem "that loss" sir Bernanke?

Bernanke: Just create a new account. Call it the negative liabilities account and throw all our crap in it. We will pay this account with funny money via QE 1 and QE 2 and etc.....it will be epic!

 

Wed, 04/20/2011 - 18:25 | 1190248 andybev01
andybev01's picture

*crickets chirp*

Wed, 04/20/2011 - 18:52 | 1190340 New_Meat
Wed, 04/20/2011 - 19:02 | 1190369 Mae Kadoodie
Mae Kadoodie's picture

Treason of the highest order.

Wed, 04/20/2011 - 19:22 | 1190420 andybev01
andybev01's picture

Not obtuse enough for at least 3 of you.

Guess I'll dumb it down for you:

No one will understand or care if they did, BITCHEZ!!!!!!!

Wed, 04/20/2011 - 19:28 | 1190441 SheepDog-One
SheepDog-One's picture

I dont see why that would have been junked...maybe Ben, Timmah, and Barry Soetoro all stopped by.

Wed, 04/20/2011 - 19:37 | 1190463 andybev01
andybev01's picture

heh heh heh.

Barry is too busy today, fucking up our traffic patterns down the street.

Wed, 04/20/2011 - 23:05 | 1191026 rocker
rocker's picture

Don't feel bad. I got trashed at the highest ever today. A record for me.

My guess: the dummies don't like the message. You said, 'no one will understand'.

That's the problem, the trasher's don't get it.

I say, Don't blame the messenger if you don't like the truth told. 

Wed, 04/20/2011 - 18:23 | 1190250 slaughterer
slaughterer's picture

Wish this would appear on all MSM before next week's FOMC.   Would love to here Ben try to swat it away.  Good work.

Wed, 04/20/2011 - 18:24 | 1190252 6 String
6 String's picture

Ah...well, yes. But bond holders are never wrong: 3.4% bitchez.

Wed, 04/20/2011 - 18:24 | 1190253 redpill
redpill's picture

Sure would be fun to pass it around on Twitter and watch people freak out for 10 minutes though.

Wed, 04/20/2011 - 18:33 | 1190284 FOC 1183
FOC 1183's picture

Cut & paste

Wed, 04/20/2011 - 18:33 | 1190292 Worker Bee
Worker Bee's picture

You may be on to something..if only something like this could be floated to the lame stream media..may cause just enough waves to tip the boat?

Wed, 04/20/2011 - 18:54 | 1190354 Rainman
Rainman's picture

...you'll need to send along a glossary of terms tho

Wed, 04/20/2011 - 21:55 | 1190814 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

...and a freakishly-beautiful woman with large breasts to read it outloud to everyone.

Wed, 04/20/2011 - 18:54 | 1190343 alien-IQ
alien-IQ's picture

too many words for twitter. you'd have to reduce it to : Shit. Fan. Splat. Done.

And then they'd think you were talking about Charlie Sheen. It's useless.

Wed, 04/20/2011 - 19:12 | 1190392 sodbuster
sodbuster's picture

U.S. debt? Winning!!!

Wed, 04/20/2011 - 19:39 | 1190439 NotApplicable
NotApplicable's picture

Ok then, how about Google bombing?

Wed, 04/20/2011 - 18:27 | 1190254 squexx
squexx's picture

China may revalue the Yuan this weekend as well as possibly being involved in a Greek (and maybe even a PIIGS) restructuring as well. Comments please, Tyler?!?

 

http://www.wallstreetexaminer.com/blogs/winter/?p=3862

Wed, 04/20/2011 - 18:28 | 1190259 Tyler Durden
Tyler Durden's picture

Probability of China revaluaing voluntarily: 0.01%

Wed, 04/20/2011 - 18:52 | 1190338 alien-IQ
alien-IQ's picture

is that up from your previous 0% chance...or am I mistaken?

Wed, 04/20/2011 - 19:50 | 1190494 oddjob
oddjob's picture

Millions play the lottery everyday for far less of a chance.

Thu, 04/21/2011 - 06:42 | 1191686 willien1derland
willien1derland's picture

Exactly is the probability trending upward?

Wed, 04/20/2011 - 19:29 | 1190436 FreedomGuy
FreedomGuy's picture

I think China is caught in an interesting problem of its own making. By pegging its currency we export some of our inflation. We print more FRN's and they keep taking them at present value for their goods. Meanwhile, food and fuel get repriced higher. Of course, according to our economic geniuses these are two classes of products that do not count in inflation, but no one told the Chinese peasants. As you see in other articles, the peasants are protesting as their wages stay low and fuel and food rise...both thanks to a deteriorating dollar.

China can revalue or depeg the yuan and get cheaper commodities but lose export leverage or vice versa. The longer they wait the worse it will get...unless the Republicans win the budget battle and the dollar strengthens again. I love manipulated currencies and economies!

Wed, 04/20/2011 - 21:53 | 1190808 cranky-old-geezer
cranky-old-geezer's picture

Agree. 

China's laughing their asses off now watching the dollar implode. 

Let's hope laughing is all they do.

Thu, 04/21/2011 - 08:25 | 1191795 Commander Cody
Commander Cody's picture

Greek tragedy?

Wed, 04/20/2011 - 18:29 | 1190260 FLUSA.com
FLUSA.com's picture

How do we do the time value of money calculation backwards? 

Wed, 04/20/2011 - 18:28 | 1190261 Cognitive Dissonance
Cognitive Dissonance's picture

This makes too much sense Tyler so it's unbelievable. Of course if it made no sense at all it would also be unbelievable.

#Winning

Wed, 04/20/2011 - 18:35 | 1190291 Cleanclog
Cleanclog's picture

"Winning the Future" WTF - worst political moniker yet.  

What about "Working for the Future"? "Sacrifice for the Future" "The Bankers are our Future" "Your Future Sucks if You aren't a Banker or an Elected Politician bought by the Bankers".

Wed, 04/20/2011 - 20:06 | 1190531 Chuck Walla
Chuck Walla's picture

HEY! When I think WTF, I think Obama!  Its working.

Thu, 04/21/2011 - 22:01 | 1195015 Anonymouse
Anonymouse's picture

Why the face?

Wed, 04/20/2011 - 18:28 | 1190262 Worker Bee
Worker Bee's picture

"Unlike during the housing bubble S and P is no longer a reliable ratings agency"

 The Berbankster

Wed, 04/20/2011 - 18:28 | 1190264 Chuck Bone
Chuck Bone's picture

The Federal Reserve intends to handle said losses via a ‘negative liability’ account, which makes them the liability of the United States of America.

Can someone please explain the mechanics of this? How exactly does this become a liability of the US government?

Wed, 04/20/2011 - 18:36 | 1190301 MsCreant
MsCreant's picture

Unless I am mistaken, anything the Fed takes on it's balance sheet is backed by the USG if there is a default. That would be you and me.

Wed, 04/20/2011 - 18:57 | 1190353 New_Meat
New_Meat's picture

well, don'tcha' know.  New term: "Fed Takes On Its Ballance Sheet",  well in pig tradition, we'll call it "slurping".

- Ned

{OT, I hope that your reported home situation is getting better.}

Wed, 04/20/2011 - 23:24 | 1191100 Hephasteus
Hephasteus's picture

No. I don't work for the government and I don't pay it's bills.

Wed, 04/20/2011 - 23:43 | 1191176 Element
Element's picture

Sorry Ms, youse lot still ain't good for it ... but your natural resource base might be ... that's what is covering all this BS ... if anything.

Wed, 04/20/2011 - 18:40 | 1190307 JPG101
JPG101's picture

How would the central bank get out of a very leveraged bet on the US if things go badly? Print more I guess? What would that do to US fiat value and rates? Then what will Americas central bank do? Print more? It gets kind of circular and the end game isn't obvious. Solving a political problem with a printing press is a loosing proposition IMHO...

Maybe the Fed should just buy all the US debt and chip in another 'extra' 10% so there could actually be a surplus somewhere on one part of the balance sheet. The next step would be for the Fed to hide off balance sheet all the extra borrowing (or lending or printing depending on perspective) that the Fed is doing. Problem solved and no one will notice. It worked (and still works) for big banks worldwide. Why not the Fed?

 

Long PM but retrospectively not enough

Wed, 04/20/2011 - 18:40 | 1190309 FOC 1183
FOC 1183's picture

Buried in a routine weekly releas (it's a liability account that they owe as a result of remitting income; when they lose money, the liability becomes negative)
http://www.federalreserve.gov/releases/h41/20110106

Wed, 04/20/2011 - 18:50 | 1190341 JPG101
JPG101's picture

See: it all works out!

Genius...

How come I can't do that? I would be rich sooo quickly

Wed, 04/20/2011 - 19:05 | 1190376 Rainman
Rainman's picture

Those banksters can really dream up some diabolical shit, huh ?? The Fed is a bucket shop that loses big bets and never has to pay up out of its own wallet. Brilliant.

Wed, 04/20/2011 - 19:32 | 1190450 FreedomGuy
FreedomGuy's picture

And I thought CDO's and similar instruments were cool! This is way better! Who thinks of this stuff? Do they teach this in modern financial schools? Is it legal for anyone else in industry? Can I invent stuff like this?

Wed, 04/20/2011 - 19:36 | 1190461 FOC 1183
FOC 1183's picture

No, per FASB it is explicitly illegal for private companies

Wed, 04/20/2011 - 18:50 | 1190332 nmewn
nmewn's picture

Pondering...well, the Federal Reserve doesn't have any taxing authority does it.

Hmmm...

Perhaps they were too smart by half in it's set up ;-)

Wed, 04/20/2011 - 22:18 | 1190881 cranky-old-geezer
cranky-old-geezer's picture

Oh please.

IRS is a Fed agency for all practical purposes.

Wed, 04/20/2011 - 19:19 | 1190406 RockyRacoon
RockyRacoon's picture

There was a previous ZH article about this but I'm just a lazy coon.   You could probably find it -- or some more sprightly denizen here could point you to it.

It's an ass-kicker.

Ooops -- I see that FOC 1183 has gone to the well for the real skinny:

15. Represents the estimated weekly remittances to U.S Treasury as interest on Federal Reserve notes or, in those cases where the Reserve Bank's net earnings are not sufficient to equate surplus to
capital paid-in, the deferred asset for interest on Federal Reserve notes. The amount of any deferred asset, which is presented as a negative amount in this line, represents the amount of the
Federal Reserve Bank's earnings that must be retained before remittances to the U.S. Treasury resume. The amounts on this line are calculated in accordance with Board of Governors policy, which
requires the Federal Reserve Banks to remit residual earnings to the U.S. Treasury as interest on Federal Reserve notes after providing for the costs of operations, payment of dividends, and the
amount necessary to equate surplus with capital paid-in.

Wed, 04/20/2011 - 19:33 | 1190443 FOC 1183
Wed, 04/20/2011 - 20:19 | 1190548 RockyRacoon
RockyRacoon's picture

Ok, you got the coon off his lazy ass.   It seems that I was remembering a comment:

Archibald Holbroke
on Thu, 03/31/2011 - 18:59
#1123227

 the following article appeared on "the market oracle" web site - http://www.marketoracle.co.uk/Article26444.html

Comments are in (( double brackets))

Fed New Accounting Change Means its Impossible for the Fed to go Bankrupt!

 

Politics / Central Banks

Feb 21, 2011 - 08:11 AM

By:

 Robert_Murphy

 On January 6, in the opening of its weekly H.4.1 release — which details changes to the Fed's holdings from the prior week — the

 Fed announced

the following:

The Board's H.4.1 statistical release, "Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks," has been modified to reflect an accounting policy change ((this is the "new math")) that will result in a more transparent presentation of each Federal Reserve Bank's capital accounts (( if the banks are insolvent they have no reserve balances)) and distribution of residual earnings to the U.S. Treasury. Although the accounting policy change does not affect the amount of residual earnings that the Federal Reserve Banks distribute to the U.S. Treasury, it may affect the timing of the distributions. Consistent with long-standing policy of the Board of Governors, the residual earnings of each Federal Reserve Bank, after providing for the costs of operations, payment of dividends, and the amount necessary to equate surplus with capital paid-in, are distributed weekly to the U.S. Treasury. The distribution of residual earnings to the U.S. Treasury is made in accordance with the Board of Governor's authority to levy an interest charge on the Federal Reserve Banks based on the amount of each Federal Reserve Bank's outstanding Federal Reserve notes. ((so what if there are no earnings to distribute?))

Effective January 1, 2011, as a result of the accounting policy change, on a daily basis each Federal Reserve Bank will adjust the balance in its surplus account to equate surplus with capital paid-in and, in addition, will adjust its liability ((exactly how does one adjust a liability when it is insolvent?)) for the distribution of residual earnings to the U.S. Treasury. Previously these adjustments were made only at year-end. Adjusting the surplus account balance and the liability ((so what if the liability exceeds the surplus?)) for the distribution of residual earnings to the U.S. Treasury is consistent with the existing requirement for daily accrual of many other items that appear in the Board's H.4.1 statistical release. The liability for the distribution of residual earnings to the U.S. Treasury will be reported as "Interest on Federal Reserve notes due to U.S. Treasury" on table 10. Previously, the amount necessary to equate surplus with capital paid-in and the amount of the liability for the distribution of residual earnings to the U.S. Treasury were included in "Other capital accounts" in table 9 and in "Other capital" in table 10.

 

If the reader had the stamina to go through the entire statement above, he or she can understand why nobody thought much of it, at the time of the release. The Fed seemed to be saying that the rule change was no big deal, was perfectly consistent with the treatment given to other items, and that, if anything, it was a move promoting greater transparency of the Fed's operations.

It was not until later in the month that skeptical financial bloggers realized the implications of the rule change: the Fed was now impervious to bankruptcy, as a matter of accounting.

Bernanke Wanted to Focus on the Positive …

 

Here's a summary of the new situation from an

 

Here is how Bank of America's Priya Misra explains this curious, and most certainly politically-motivated development: "The Fed remits most of its net earnings on a weekly basis. Prior to this accounting change, any unremitted earnings due to the Treasury would accrue in the 'Other capital' account, but will now be shown in a separate liability line item called 'Interest on Federal Reserve notes due to the Treasury.' As a result, any future losses the Fed may incur will now show up as a negative liability (negative interest due to Treasury) as opposed to a reduction in Fed capital, thereby making a negative capital situation technically impossible regardless of the size of the Fed's balance sheet or how the FOMC chooses to tighten policy." (emphasis in original) ((a negative liability must by definition be an asset because a liability is a negative and a negative times a negative is a positive, hence a negative liability must be a positive or equal to an asset))

 

Well now, that's rather a different flavor from the Fed's original statement, isn't it? To see how the two are consistent, let's look again at the critical passages from the Fed's announcement:

[E]ach Federal Reserve Bank will adjust the balance in its surplus account to equate surplus with capital paid-in and, in addition, will adjust its liability for the distribution of residual earnings to the U.S. Treasury. … The liability for the distribution of residual earnings to the U.S. Treasury will be reported as "Interest on Federal Reserve notes due to U.S. Treasury" on table 10. Previously, the amount necessary to equate surplus with capital paid-in and the amount of the liability for the distribution of residual earnings to the U.S. Treasury were included in "Other capital accounts" in table 9 and in "Other capital" in table 10.

 

The trick is that the Fed led the reader to assume that "the balance in its surplus account" would be positive. (( now this is where the rubber meets the road - a trick)) In other words, the Fed was dealing with the standard case where its assets grow over time (because of interest earnings on its bonds, etc.). That would lead the left-hand side of the balance sheet (i.e., the "Assets") to grow, and so something on the right-hand side of the balance sheet (i.e., "Liabilities and Capital") would need to grow by the same amount.

Prior to the announcement, the immediate move would be to mark up an increase on the "Assets" side with a corresponding credit to the "Capital" (or "Shareholder Equity") items on the right-hand side. But now, the Fed is saying that when its assets appreciate, it won't credit the capital accounts. ((and that would hide the fact that the new "assets" are now liabilities that do not belong in the capital account anyway)) Instead, it will make the right-hand side of the balance sheet go up by entering a new liability, titled (paraphrasing) "Earnings We Need to Send to the Treasury." ((these "earnings" cannot be sent to the Treasury if they are really liabilities in disguise, thus the Fed may need to send them but can't))

(To understand the big picture, keep in mind that after the Fed pays its bills, any excess earnings are remitted to the Treasury. As I argued in

 

this piece

, that mechanism means that Uncle Sam effectively pays no interest on those bonds held by the Federal Reserve.)

Denial Is Normal after a Traumatic Loss

 

Ah, but as Bank of America's Misra pointed out, the real fun happens when the Fed suffers losses on its assets. (( I think we get traction here)) In normal accounting, when the market value of a company's assets goes down, the firm marks down its "Assets" (left-hand side of the balance sheet) and correspondingly marks down its "Capital" by the same amount (right-hand side of the balance sheet).

The danger is that if a firm loses too much, then it might wipe out all of its capital. At that point, the firm would be insolvent, because its remaining "Assets" would be smaller than its "Liabilities." Remember the basic accounting truism: (( by definition all banks are insolvent because of the fractional reserve basis upon which they function, thus if the reserves completely disappear they have nothing at the Fed from which to cover their liabilities. So how does the FED credit them with reserves to keep them solvent? By counting losses as negative liabilities and as "assets" on its own balance sheet and giving them reserves in exchange, thus printing money against losses???))

Assets = Liabilities + Capital (or Equity)

If the company ((or country?)) suffers such large losses that its "Capital" (or "Equity") becomes negative, that is simply another way of saying that the company owes people more money (i.e., its liabilities) than it has in assets. (( man if that don't sound like Uncle Sam and the rest of the worldwide banking scam I don't know what does.)) That is the

 

definition of insolvency

, and unless the situation is rectified the firm will eventually default on its obligations and go bankrupt. (( I think the FED would have become bankrupt without this new accounting trick.))

((I am not sure if this is relative or not, but I thought it might merrit some consideration.))

Wed, 04/20/2011 - 20:50 | 1190644 FOC 1183
FOC 1183's picture

"and unless the situation is rectified the firm will eventually default on its obligations and go bankrupt"

It is extremely relevant, and is also why this type of accounting is illegal for any private ongoing concern. We know they 'claim' the fed is private, so what does that say about deloitte's opinion of them as an ongoing concern (rhetorical)

Wed, 04/20/2011 - 20:23 | 1190564 Withdrawn Sanction
Withdrawn Sanction's picture

...which requires the Federal Reserve Banks to remit residual earnings to the U.S. Treasury as interest on Federal Reserve notes after providing for the costs of operations, payment of dividends, and the amount necessary to equate surplus with capital paid-in.

Did you catch that?  The dividend recipients (i.e., the member banks who actually "own" the 12 district banks) get their 6% vig ahead of the taxpayers.  How nice....for them.  At most companies I'm familiar with, the taxman takes his bite ahead of the dividend recipients.

Wed, 04/20/2011 - 20:43 | 1190613 nmewn
nmewn's picture

It has always been thus.

They are monetary vampires...the economy can grow at 1% or 3%...or not at all...it doesn't matter to them, as long as it's alive.

And if I'm not mistaken, it's tax free ;-)

Thu, 04/21/2011 - 02:47 | 1191476 FreedomGuy
FreedomGuy's picture

Seems like the government also has to reverse the process if the Fed begins losing money which will in turn create a new liability for the government. If I understand this article and comments that is what the S&P and others are worried about as the Fed is leveraged 48-1. Have I misunderstood this?

Wed, 04/20/2011 - 19:21 | 1190427 cranky-old-geezer
cranky-old-geezer's picture

Simple. Losses are deducted from Treasury interest rebates.

Wed, 04/20/2011 - 20:10 | 1190535 Chuck Walla
Chuck Walla's picture

First, get the terminology right: "liability management exercise."

 

Wed, 04/20/2011 - 18:27 | 1190268 buzzsaw99
buzzsaw99's picture

S&P has zero credibility.

Wed, 04/20/2011 - 18:50 | 1190333 alien-IQ
alien-IQ's picture

and the FED does?

Wed, 04/20/2011 - 18:52 | 1190336 buzzsaw99
buzzsaw99's picture

pot, kettle.

 

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRLWzHsF16lY

 

all part of the same criminal conspiracy.

Wed, 04/20/2011 - 19:47 | 1190483 Bob
Bob's picture

No shit.  I'm sure I'm not the first to think of it, but I gotta say it: Have the ratings agencies ever given us reason to suspect they might be open for hire? 

They seem to still be serving banksters, as far as I can see. 

Surprise!

http://www.imdb.com/title/tt0387575/

Wed, 04/20/2011 - 18:28 | 1190273 Tracerfan
Tracerfan's picture

Up is down and down is up on the Street and in Obama's Amerika.

Wed, 04/20/2011 - 18:28 | 1190274 JPG101
JPG101's picture

S&P wants to stay semi credible so it has to down grade something of the US when faced with overwhelming evidence of fiat destruction. They don't exactly have a great track record and I wonder why anyone actually pays attention to anything they say? I guess AAA obligated holders are stuck to listening to them. What a racket.

Wed, 04/20/2011 - 18:40 | 1190308 SheepDog-One
SheepDog-One's picture

The scary part is S&P NEVER downgrades anything till after the fact. Glaring example is Enron, which S&P maintained a 'strong buy' rating on until it was under $1. Thats a fact.

So....S&P turns in a negative score on US debt, just tells me its already totaly failed.

Wed, 04/20/2011 - 18:47 | 1190331 JPG101
JPG101's picture

I'm a bit more of an optimist IF the US could get its' political act straight... Some would then say I'm therefore by definition a pessimist!

One thing that seems to be overlooked is the huge military advantage the US still has over everyone else and the deep distrust many countries around the world have of each other. That alone will keep the US more dominant IMO then most guess right now. 

I'm still long the US dollar at these prices but hedged with a lot of non US assets. Everytime I listen to comments out of Congress and the White House I question my long US$ (at these prices) bias though. 

Wed, 04/20/2011 - 19:35 | 1190453 FreedomGuy
FreedomGuy's picture

What about Moody's?

Wed, 04/20/2011 - 18:30 | 1190279 Worker Bee
Worker Bee's picture

They are always behind the curve so by the time they actually downgrade,we will all be drying meat on freeways and climbing vines on the sears tower.

Wed, 04/20/2011 - 18:36 | 1190297 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

You expect the docile masses to understand this!? Yes, you've spelt it out clearly and concisely...

... but have you seen the average American? You'll need to resort to crayon drawings and clapping noises i'm afraid, and then i still don't think it'll sink in. 

Wed, 04/20/2011 - 18:39 | 1190312 SheepDog-One
SheepDog-One's picture

The only thing the Neandersheeple masses will understand is when a boot is stomping their skull. Then theyll get it for .01 seconds.

Wed, 04/20/2011 - 18:44 | 1190318 andybev01
andybev01's picture

I call 'dibs' on their flat screens.

Wed, 04/20/2011 - 18:48 | 1190334 Irwin Fletcher
Irwin Fletcher's picture

Sheepdog, my guess of your true identity: Michael Frank, discoverer of the Neandersheeple gene:

http://www.courant.com/health/connecticut/hc-weir-advice-0420-20110420,0...

Wed, 04/20/2011 - 19:18 | 1190415 SheepDog-One
SheepDog-One's picture

:D

Wed, 04/20/2011 - 18:49 | 1190330 FOC 1183
FOC 1183's picture

Wow, so that's why Cramer is still on the air.

Wed, 04/20/2011 - 18:44 | 1190317 gordengeko
gordengeko's picture

Who is the s&p again? Wipeout is on tonight.

Wed, 04/20/2011 - 18:55 | 1190355 JPG101
JPG101's picture

What channel is S&P on?

Wed, 04/20/2011 - 19:52 | 1190495 Shell Game
Shell Game's picture

1330

Wed, 04/20/2011 - 20:01 | 1190518 Yes_Questions
Yes_Questions's picture

deleted duplicate

Wed, 04/20/2011 - 20:00 | 1190520 Yes_Questions
Yes_Questions's picture

Real Housewives of the S&P..

 

Its on CNBS.

Wed, 04/20/2011 - 18:56 | 1190349 andilinks
andilinks's picture

The the unknown number of Fed issued derivatives are figured into this analysis?

Wed, 04/20/2011 - 19:00 | 1190360 Al89
Al89's picture

OT but guess who is/was apparently a 'strong candidate' to become the IMF's next MD?

Gordon 'No return to boom and Bust'&'I sold all the nation's Gold at the bottom of the market' Brown.

http://www.guardian.co.uk/politics/2011/apr/19/gordon-brown-not-most-appropriate-imf-cameron

For as much of an idiot Cameron is and the Tories in general are, I can't believe people are strongly in favour of that utter fucking idiot Brown taking the post. Not that an utter fucking idiot in charge of the IMF would be breaking a trend. 

I just needed to vent after seeing that article, this is preposterous. As preposterous as Blair being made ME 'Peace envoy'. It is like someone is doing this on purpose simply to be amused by people's angry reactions. No sorry..not angry, most British people are reality T.V. watching idiots. They don't care.

Wed, 04/20/2011 - 20:03 | 1190511 rufusbird
rufusbird's picture

I have been thinking it will Ben B. or Tim T. We will see. ( you have all heard the term 'being kicked upstairs'.

Wed, 04/20/2011 - 19:08 | 1190380 Trump2012
Trump2012's picture

Just let me know the date and time of the collapse...Anybody want to put a date in writing?  How about 9/11/2011?

Wed, 04/20/2011 - 19:14 | 1190398 Al89
Al89's picture

British people don't care because they are too busy going 100% full retard over the wedding of a benefits cheat and Kate Middleton next week. Yes, that is by far the most important thing for these morons. 

Wed, 04/20/2011 - 19:16 | 1190409 John Wilmot
John Wilmot's picture

That's as good as any, 10th anniversary of the opening of this wonderful 'century of change' they have prepared for us..

Wed, 04/20/2011 - 20:34 | 1190592 sudzee
sudzee's picture

March 21, 2011 - 3:56 pm

Obummer:

My fellow Americans, its a sad day today as the Chineese have started forclosure proceedings on the White House. I think this highly unfair as our fico score is still a solid -1433. Our S&P and Moody's ratings are AAAAAAAAAAAAAAAA++++++++++++ so I don't see why the Chineese would not trust us to continue to pay our obligations in US dollars. Not to worry though as we do have some silverware and golden spitoons that can bribe them with. I'm sure we can negotiate from a position of power. Good night.

Thu, 04/21/2011 - 00:37 | 1191278 Dirt Rat
Dirt Rat's picture

There's some interest in Comet Elenin around that date. It's been the subject of some recent conspiracy theories and who doesn't love a good conspiracy theory?

Wed, 04/20/2011 - 19:11 | 1190382 hambone
hambone's picture

S&P futures (all futures) way up AH's...looks either like the potential to take out years highs on the open or open right there.  Will this be a massive head fake and dive or next mega leg in hyperinflation???

If we go through to the upside I think we will have entered into hyperinflation land...dollar will have taken out all near term lows in DXY.  Move to gold, silver, oil could go from fast to runaway?

OR

This is the big turning point on good results and euro crap plus Yuan revalue (rumor good enough) are the rationale to buy cheap dollar and sell all else.  Market craps out and pulls down commodity complex???

Thoughts? 

BTW - gotta believe Gross is getting hammered bout now???  Is he out of the "circle of trust" or what?

Wed, 04/20/2011 - 19:24 | 1190429 SheepDog-One
SheepDog-One's picture

Hell Im not even bothering to try to guess anymore, any scenario is just as likely as any other. WTF.

Wed, 04/20/2011 - 19:38 | 1190466 NotApplicable
NotApplicable's picture

That's what TPTB call a "win-win" situation.

Wed, 04/20/2011 - 19:50 | 1190492 Worker Bee
Worker Bee's picture

Trying to keep my head above water..not enough left to really prepare. Im just gonna sit back,crack open a Lonestar and watch this mofo go down in flames. I enjoy the guessing game,but Im sure in the end it will be something unexpected..a little dab of inflation a little dab of deflation and a whole lotta war....Bitches.

Wed, 04/20/2011 - 20:52 | 1190655 dogismyth
dogismyth's picture

Gross is someone's bitch...you can bet on that.  And he'll do what he is told to do.  Do you really believe the Buffet's and Gross's are wizards of investing?  They sold their souls.  They are bitches to their pimp...whoever the fuck that is.

Wed, 04/20/2011 - 19:10 | 1190385 SparkyvonBellagio
SparkyvonBellagio's picture

The Federal Reserve is filled with 'tards, morons, and mouth breathers right?

 

Shouldn't they be extinct by now or at least White Fossilized dog crap on the lawn.

You should be able to pick them up neatly with Chop Sticks and put them away.

 

 

Wed, 04/20/2011 - 19:12 | 1190391 I am Jobe
I am Jobe's picture

Matt Taibbi on a Government "Shadow Budget" that benefits Wall Street

 

https://www.youtube.com/watch?v=j5Qkbk76-QY&feature=player_embedded#at=23

Wed, 04/20/2011 - 19:11 | 1190393 bob_dabolina
bob_dabolina's picture

I just don't know how the rating agencies even have credibility any longer. I am shocked these institutions even exist.

Seriously...this is the same S&P that smacked AAAAAAA++++++ on my shit.

It should be noted that S&P has affirmed it's AAA on America even though America has already defaulted (yes, printing money to pay your debt is a form of default)

Wed, 04/20/2011 - 19:27 | 1190437 SheepDog-One
SheepDog-One's picture

Yes the final act of all failed empires is mad printing of their own failed currency. It is ALREADY default, just no one has admitted it yet.

Wed, 04/20/2011 - 19:13 | 1190394 High Plains Drifter
High Plains Drifter's picture

The Federal Reserve intends to handle said losses via a ‘negative liability’ account, which makes them the liability of the United States of America. ...

well of course they are.......

Wed, 04/20/2011 - 21:33 | 1190759 Raynja
Raynja's picture

sounds like taxation without representation to me

Wed, 04/20/2011 - 19:13 | 1190395 Strategery
Strategery's picture

I was discussing this on a local website the other day, and someone said: 'how can you attack the Fed? Don't you have a 401k?'. Sheeple

Wed, 04/20/2011 - 19:25 | 1190432 SheepDog-One
SheepDog-One's picture

Funny part is THEY soon wont have a 401K either after Bernanke rolls them all into the Treasury for 'safe keeping', and theyll never see it again.

Wed, 04/20/2011 - 22:23 | 1190894 cranky-old-geezer
cranky-old-geezer's picture

Correct.

Wed, 04/20/2011 - 19:42 | 1190474 NotApplicable
NotApplicable's picture

That's when you tell them it contains only CEF and some miners.

Benron not required.

Wed, 04/20/2011 - 19:20 | 1190422 MrBinkeyWhat
MrBinkeyWhat's picture

Secured-farmed land; stored food; secured water; guns/ammo; "junk" silver; marketable skills; fruit trees; US nickles; alternative energy...Am I missing something?

Wed, 04/20/2011 - 19:28 | 1190440 mynhair
mynhair's picture

missing something?

Yes, blondes.  With McBags.

Wed, 04/20/2011 - 20:57 | 1190659 dogismyth
dogismyth's picture

toilet paper, vodka and cigarettes....you fool!

Wed, 04/20/2011 - 19:21 | 1190423 mynhair
mynhair's picture

Why do people still confuse 'the Market' with the Fed?

Wed, 04/20/2011 - 19:26 | 1190430 mynhair
mynhair's picture

I'm buying TZA on Friday close.  Just for shits and giggles.

Thinking somewhere in the 33 area.

Hey, where's the CME margin increase?  Late tomorrow?

Wed, 04/20/2011 - 19:32 | 1190446 Trump2012
Trump2012's picture

Gas to $6, S&P to 15,000 by September!

Wed, 04/20/2011 - 19:32 | 1190451 SheepDog-One
SheepDog-One's picture

Likely, I dont see any way around a summer of $5 $6 gas and double food prices we're seeing now. Just that alone and this country is total chaos.

Wed, 04/20/2011 - 19:38 | 1190465 FreedomGuy
FreedomGuy's picture

But it will be blamed on conservatives and not caring enough in some twisted way. Congress will agree to spend yet more to save us from this. More regulations will work, too.

Wed, 04/20/2011 - 19:45 | 1190480 Caviar Emptor
Caviar Emptor's picture

Let the market decide

Wed, 04/20/2011 - 19:37 | 1190457 Caviar Emptor
Caviar Emptor's picture

What a country! Only in America can the poorest boy and girl become millionaires without working! And anyone with a salary will be a billionaire. We'll all be rich.

Wed, 04/20/2011 - 19:35 | 1190458 Übermensch
Übermensch's picture

Aerial bombing of S&P's head quarters would commence shortly after such a press release.

Wed, 04/20/2011 - 20:01 | 1190517 Ese Pinche
Ese Pinche's picture

+1

Wed, 04/20/2011 - 20:56 | 1190663 dogismyth
dogismyth's picture

do molotov cocktails qualify as air bombing?

Wed, 04/20/2011 - 19:35 | 1190459 AldoHux_IV
AldoHux_IV's picture

Time to end the motherfucking fed and reform the treasury.

Wed, 04/20/2011 - 19:46 | 1190470 Caviar Emptor
Caviar Emptor's picture

Based on stock market returns, Obama is the greatest president that ever lived. Can't argue with the market. 

Wed, 04/20/2011 - 19:43 | 1190473 gkm
gkm's picture

Of course it was a non-event.  When you can print your way out of any shortfall, it is impossible to get in a position of default.  It was an orchestrate sideshow.  WTF did anyone think was going to happen?

Wed, 04/20/2011 - 19:47 | 1190485 Racer
Racer's picture

I am so TOTALLY fed up paying 132p/L for petrol to get some food that is going up in price every week and pay even more council tax and massive increases in water and heating bills..

where is my wage increase? I can't pay the taxes to pay the taxes to pay the taxes so I can buy food to eat

 

Bernanke is going to go down in history as THE most EVIL mass killer ever

Wed, 04/20/2011 - 19:49 | 1190490 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

You're a slave and will remain a slave until you do something about it. The enemy is clearly identifiable, what you waiting for?

Wed, 04/20/2011 - 19:58 | 1190514 Racer
Racer's picture

I do not buy anything in the supermarket that are processed foods.. they are marked up madness... I make sure I only buy at the best price.

Will that stop the banksters robbing and looting?

 

There was a big demonstration about the Iraq invasion... it went  ahead and was an illegal war against the wishes of the people.... how can you stop people in power by legal means when they ignore the people and then use force to contain the protests?

People will have to mass riot to overthrow this madness of corruption

Wed, 04/20/2011 - 19:48 | 1190493 monopoly
monopoly's picture

This is all getting so old, yet we will probably be here a year from now wondering when our "core" will melt down. Have 0 interest in this market outside of miners, gold, silver. What a disaster I see. And shorts get burned on a regular basis. Still fighting the Head Inmate.

Wed, 04/20/2011 - 20:24 | 1190576 Cdad
Cdad's picture

Yep...getting burned, I am.  However, what else is there for an honest man to do?  Buy Chipotle at an all time high.

Speaking of Chipotle, and since I comment constantly on the criminal syndicate known as Wall Street, on CMG a market cap crime spree has been perfected.  After two quarters that were sold off, complete with Getco eske churn support lifting the shares through all sellers, the company announces...wait for it...$44 million in profit [5% margin] on a now $9 billion dollar market cap.  And as the sellers came in...it is announced that Chipotle is being added to the S&P...the announcement coming literally at the low of the AH session.

Fraudstreet is really shining on this one.  After a pump scheme of epic proportion, complete with the idiot Cramer pumping it all the way, just when the laughable fundamentals peek through...the criminal syndicate known as Wall Street prepares to dump the shares into Average Joe's 401k account...what's left of it.

Tyler...this one really deserves the full spotlight Tyler treatment.  Simply unbelievable the lengths to which the criminal syndicate known as Wall Street will go.

Wed, 04/20/2011 - 20:08 | 1190532 RobotTrader
RobotTrader's picture

Tom O'Brien, who has been a bear for 9 months running now...

He's now doing his podcasts on Internet TV.

He's visibly squirming after AAPL reported, as he's been shorting the whole way up, and he was ultra confident of a market collapse based on an AAPL miss.

Every up day is a "failure".  Every down day is a "crash" heading back to SPX 825.

http://www.tfnn.com/hour01.html

Wed, 04/20/2011 - 21:13 | 1190704 alien-IQ
alien-IQ's picture

Why don't you enlighten us with some of your entry and exit points on a stock BEFORE it happens rather than after the fact. No doubt many would see your input as a valuable public service given your supposedly stellar trading record.

So lay it out...in advance...Not in hindsight for a change.

Wed, 04/20/2011 - 20:17 | 1190546 Ecoman11
Ecoman11's picture

The magic word here is "opinion".

Wed, 04/20/2011 - 20:20 | 1190562 BlackholeDivestment
BlackholeDivestment's picture

C I L L

 ...cill my lan lord, cill my lan lord.

This has been a message from Mr. Rob Mi Son's neighborhood.

Wed, 04/20/2011 - 20:25 | 1190577 toros
toros's picture

March 13 2008

Reserve balances with Federal Reserve Banks

7,274

 

April 14 2011

Reserve balances with Federal Reserve Banks

1,522,262

They got it covered.

http://research.stlouisfed.org/fred2/series/WRESBAL

 

Wed, 04/20/2011 - 20:50 | 1190633 FOC 1183
FOC 1183's picture

Duplicate

Wed, 04/20/2011 - 21:06 | 1190685 alien-IQ
alien-IQ's picture

Not that it matters but...$DXY just broke below the December 2009 low...now it's nothing but air til we hit about 71.75.

No doubt the market will cheer as the population writhes in pain from the inflation that does not, according to the Chairsatan, exist.

Rally on retards. And save a few bucks from your BIDU long winnings for grandma...she'll be eating cat food soon.

Wed, 04/20/2011 - 21:18 | 1190716 blunderdog
blunderdog's picture

it's great for all our 'Merkin exports...

Wed, 04/20/2011 - 21:21 | 1190731 alien-IQ
alien-IQ's picture

Our main exports now are Debt, Death and War. I think the world would be happy to see our exports decline...So would I.

Thu, 04/21/2011 - 00:45 | 1191292 blunderdog
blunderdog's picture

No one ever wants to give a global hegemonic empire a freekin' break.

Wed, 04/20/2011 - 21:13 | 1190705 Yield2Greatness
Yield2Greatness's picture

Pretty amazing.  Just wait for the fall.  It will be epic.

Wed, 04/20/2011 - 21:31 | 1190717 alien-IQ
alien-IQ's picture

Oil $112, $DXY 74.086 (new low...and falling)

Needless to say, at the rate the dollar is falling, Silver should hit $46 before the end of the Nuggets game. A mere 17 cents to go...

Wed, 04/20/2011 - 22:38 | 1190943 cranky-old-geezer
cranky-old-geezer's picture

Looks like they're defending 74.35.  How I can't imagine.  Pulling back liquidity isn't an option.

Keep an eye on this folks.  This thing could unzip pretty fast.

 

Wed, 04/20/2011 - 22:06 | 1190857 watmann
watmann's picture

assuming this is "a draft fake" I would suggest to the person that drafted it that they not do anything like this again or in the alternatice discuss it with thier counsel first. I am not a lawyer however.

Wed, 04/20/2011 - 22:09 | 1190858 blindman
blindman's picture

question.  what is the minimum amount of time that is

required to go from being flat ass bankrupt, in systemic

need of a bailout shadow or otherwise, to then miraculously

becoming a veritable bond vigilante?   can this metamorphosis

take place overnight or are longer periods of time required?

i would like to know. 

Wed, 04/20/2011 - 22:10 | 1190864 Itsalie
Itsalie's picture

DXY to 70? Your president will be able to boast raising a trillion greenback toilet paper dollars for his re-election campaign. The masses suffering from inflation? There is no inflatiopn in the US (not if you are tenured professor with defined benefits for the rest of your long life ahead). Plus, euro/dollar at 1.60 and Schumer promised us plenty of jobs - that's the Fed's second mandate - and if the jobs are not forthcoming, it means yiu are not printing enough, got it? Now back to silver watching.

Wed, 04/20/2011 - 23:26 | 1191118 nah
nah's picture

S n' P downgrade is a big deal... a false flag attack in which the globalists will prove hype... power lies not with government printers... power lies not with S n' P downgrades...  power is sexy yall and just a biiiiiiit beyond your reach

.

mad envy

Thu, 04/21/2011 - 01:28 | 1191348 Bansters-in-my-...
Bansters-in-my- feces's picture

"The Federal Reserve intends to handle said losses via a ‘negative liability’ account, which makes them the liability of the United States of America".

Hey...Americans...!!!

Are you's not tired of living on your knees yet.???

Thu, 04/21/2011 - 01:33 | 1191352 Bansters-in-my-...
Bansters-in-my- feces's picture

"The Federal Reserve intends to handle said losses via a ‘negative liability’ account, which makes them the liability of the United States of America".

Hey...Americans...!!!

Are you's not tired of living on your knees yet.???

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