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Republicans Pushing To Count GSE Debt Toward Statutory Debt Limit May Be Surprised To Find Real Debt-To-GDP Ratio Is 130%, And That Greece Is Amateur Hour

Tyler Durden's picture


A new proposal by House Republicans, lead by Rep. Scott Garrett (R., N.J.), is seeking to address changes to Fannie and Freddie accounting, along the lines of what has been previously proposed by Zero Hedge, and to not only include the GSE's losses as part of the Federal budget, but to also count the debt from the two mortgage zombies toward the nation's total statutory debt limit. As we stated previously, it is only semantics at this point which distinguish the GSE obligations from other Treasury obligations. Yet it is not just us, but the administration's very own Peter Orzsag who was pushing for consolidated GSE accounting two years ago. Yet with GSE debt most recently at $6.3 trillion, or about half of the existing Treasury debt, this would mean total US debt would not only explode by 50% overnight, but the recently  increased debt ceiling would be immediately breached and America would find itself in technical default (where it really is right now for all technical purposes).

Dow Jones has more:

A memo written by Garrett's office, which was released Monday, states that "now that the federal government has explicitly backed the operations of the GSEs, there should no longer be a distinction between their debt ... and the debt issued by the Department of the Treasury."

The proposed legislation highlights the current uncertainty surrounding the two firms, which have been under government control since September 2008. Federal officials were expected to provide some guidance as to their future plans for Fannie Mae and Freddie Mac in the fiscal 2011 budget released earlier this month, but that information wasn't included.

The Office of Management and Budget, which compiles the White House's annual budget request, did acknowledge in the budget the different ways the government currently accounts for the two firms. The Congressional Budget Office accounts for the two firms "on budget," treating them like any other federal agency. OMB, meanwhile, treats them "off budget," considering them to be private companies.

As we observed some time ago, "It would seem a little presumptuous that an amount representing more
than half of the total US sovereign debt is conveniently swept under
the rug." Luckily, there are people like Garrett to remind Obama and his henchmen that not every person in America is a zombified purchasing cretin with 10 credit cards and a limitless Centurion in the mail, who couldn't care less about America's sovereign default until 3 days after the fact. Oh, and Garrett's action also means that should his proposal be enacted (slim chance, with such WallStreet-based enablers as Summers and, ironically, Orzsag, the ultimate decision makers), then the US Debt/GDP just shot up from under 90% to over 130%. Which it really is currently, for all intents and purposes. Except, of course, for the saving grace of the dictionary entry for what "full faith and credit" of a bankrupt country really means. Pop quiz: what is the full faith and credit of a bankrupt entity?

And just in case you were confused, and have yet to recognzie the idiocy of the OMB, and the ruling class in general, here is a paper written in 2002, in which authors Joseph Stiglitz (a Nobel winner no less), and Jonathan and Peter Orzsag, whose opinions rotate by 180 degrees more often than a magnetic needle above true north, claim the following OMB-referential piece of unparalleled garbage:

Interestingly, however, the Office of Management and Budget tested Fannie Mae’s and Freddie Mac’s capital adequacy in the early 1990s by subjecting their business activities to a ten-year stress test that simulated the financial and economic conditions of the Great Depression. The test showed that if a Depression lasted ten years, given 1990 levels of capital, both Fannie Mae and Freddie Mac had sufficient capital to survive. This result led OMB to conclude that in the event of a severe nationwide economic downturn, the probability of either Fannie Mae or Freddie Mac defaulting would be “close to zero.” This implies that if Fannie Mae and Freddie Mac hold sufficient capital to withstand the riskbased capital scenario, they would likely fare well under any conceivable economic environment.

Ah, the OMB, which less than 10 years ago said the probability of a GSE default was close to zero. With such lunatics in charge of making the decision of whether the GSEs should or should not be considered Treasury debt, can we please just fast forward 10 years to the post nuclear war holocaust already. The constant barrage of daily bullshit is really getting tiring.


h/t Adam


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Mon, 02/22/2010 - 19:54 | 240834 bugs_
bugs_'s picture

Those waskally webpublicans!!

Mon, 02/22/2010 - 20:47 | 240916 colonial
colonial's picture

very funny bugs...i may use this myself one day as i live inside the silly circle

Mon, 02/22/2010 - 21:02 | 240937 Hansel
Hansel's picture

Barney Frank?  Is that you?

Mon, 02/22/2010 - 23:30 | 241111 jeff montanye
jeff montanye's picture

how similar is 1990 to 2008 vis a vis the stress test?  but, and i never thought i would say it (hard core obama campaigner) thank whomever for the wascally wepublicans.  because they actually are an opposition party (as opposed to those incurably cowardly democrats).  even as obama copies bush in all but atmospherics, they oppose him.  audit the damn fed.  count fannie and freddie bailout to infinity in the debt.  nominate ron paul.  buy gold miners. 

Mon, 02/22/2010 - 19:54 | 240835 MsCreant
MsCreant's picture

So are all of the countries going to race against each other now to get all their debt out in the open? Lets see who is worse off? Put the cards on the table?

[I can't believe I am gonna post this]

Mon, 02/22/2010 - 20:48 | 240917 Noah Vail
Noah Vail's picture

I can judge how bad things are getting by how much profanity Tyler uses. Lies are now bullshit. I'm awaiting the next escallation with trepidation, Ty.

Mon, 02/22/2010 - 20:53 | 240921 knukles
knukles's picture

The more cards on the table, the bigger the all in, so to speak.  The worst it looks the easier for His Majesty and Con-cronies to solve the crisis through higher taxes, wealth confiscation, inflation and redistributive policies. 

Home run!  Never let a crisis go to waste!

Isn't the Axis-of-Evil a cult from DC? 

Mon, 02/22/2010 - 23:57 | 241147 macfly
macfly's picture

ain't that the truth!

Tue, 02/23/2010 - 07:49 | 241305 Cognitive Dissonance
Cognitive Dissonance's picture

"The worst it looks the easier for His Majesty and Con-cronies to solve the crisis through higher taxes, wealth confiscation, inflation and redistributive policies." 

This is a truth most people will find hard to swallow. They expect all politicians and other so-called "leaders" to obscure facts and figures to keep people in the dark. But when the objective is great social and economic change and they need the masses to be in general agreement with their nefarious plans, the powers that be need it to look so bad, so absolutely catastrophic, that the great unwashed will plead with their leaders to enslave them and strip them of their freedom and wealth for their own good, if only the leaders would keep the wolves from the door.

Of course, we all know who the wolves really are but that's far too complicated a concept for the average conditioned mind to comprehend. Freedom and wealth = bad. Lowered standard of living, involuntary servitude and grand theft = good. Please turn the TV back on master, pleaseeeee.

Tue, 02/23/2010 - 16:18 | 241614 Clinteastwood
Clinteastwood's picture

Your comment is a bit too elitist for me.  The discipline of psychology tends to elitism with one of it's basic underlying assumptions; viz., examine the psychology behind behavior because that individual isn't capable of acting out of free will.  The psychologist has free will though, you betcha; that's why s/he is here---to tell you how/why your mind is/isn't working right.

Mon, 02/22/2010 - 21:09 | 240947 Shameful
Shameful's picture

Remember these are not all the cards.  This is a "slow"ante up to the table to show the black holes of debt each big enough to swallow the planet.  Each country is just slowly peaking out.  I'm reminded of an old joke.

A man was walking down the street in Moscow and saw another man walking casually wearing a grave shroud.  Thinking it strange, he went over to him and asked "Why are you wearing a grave shroud?"

"I'm wearing this because we have started a nuclear war with the United States and will all be dead soon.  I'm going to the graveyard to die there"

"Why are you walking, why not run there?"

"I don't want to cause a panic"

The missles are already in the air, they just don't want to let the peopel know.

Mon, 02/22/2010 - 23:32 | 241114 masterinchancery
masterinchancery's picture

only a selective peek at the hole cards--could be very deceptive!

Mon, 02/22/2010 - 23:39 | 241123 jeff montanye
jeff montanye's picture

like the joke.  my favorite though is the pun of each country peaking out of its black hole of debt.

Mon, 02/22/2010 - 23:05 | 241085 Going Down
Going Down's picture


"So are all of the countries going to race against each other now?"


When I look at the US, I think it would be a very good thing if Washington included all its liabilities in future budgets, up to and including Fannie Mae, Freddie Mac, Ginnie Mae, FHLB and FHA, since that would provide a much clearer (dare I say honest?) picture of where the country stands. It would also be murder on the dollar. Curiously (for many), the US is not the only party that wants the trillions in mortgage losses off the American books. Germany wants the exact same thing, something all these experts seem to be completely oblivious to.

We have entered the beggar-thy-neighbor phase of the downfall, the race to the bottom is on for currencies. Obama's ludicrous call to double US exports in 5 years fits that same idea. The one viable way left to soften the fall is to entice other countries to buy your products, because that's the only money you don't have to borrow. But you can't achieve that goal with a strong currency. China knows that all too well and keeps the renminbi pegged to the USD. Everything they own is denominated in dollars anyway. But if Germany gets its way, the Chinese currency will rise with the dollar, until the latter is on par with the Euro (it’s €1 to $1.36 today). Once that is done, Germany hopes to once again be the world's largest exporter....

This is not a fight for a meal of kings, this is a down and dirty scramble about the scraps off the table.


Tue, 02/23/2010 - 06:26 | 241299 aus_punter
aus_punter's picture

"When I look at the US, I think it would be a very good thing if Washington included all its liabilities in future budgets, up to and including Fannie Mae, Freddie Mac, Ginnie Mae, FHLB and FHA, since that would provide a much clearer (dare I say honest?) picture of where the country stands. It would also be murder on the dollar."


Do you think the forex market has ignored this up until now ?


Thu, 02/25/2010 - 03:44 | 244622 Anonymous
Anonymous's picture

I bet on US

Mon, 02/22/2010 - 19:58 | 240840 mouser98
mouser98's picture

technically, its not default until you miss a payment right?  and that won't happen as long as the printing press still works... oh you assumed payment in something other than green TP...

Mon, 02/22/2010 - 20:18 | 240878 Anonymous
Anonymous's picture

Stiglitz, I didn't know you kept up with ZH!!

Mon, 02/22/2010 - 20:01 | 240848 D.M. Ryan
D.M. Ryan's picture

It's similar to a Parliament. Tricks of that sort are pulled frequently in parliaments to embarrass the government, although the shenanigans tend to be confined to Question Periods.

Mon, 02/22/2010 - 20:02 | 240850 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I hate these guys.  Orzog is as weaselly as Geiththththner, and he has a brother?  jeesh.  Stieglitz is too comfortable (and he, like Volker, is the "voice of reason"????).  FNM and FRE will be the undoing of America.  That was the plan all along.  Thank Rubin, Summers, and Greenspan, not to mention BS and lil Timmy.  Oh and note that not only is Obama drinking the kool aide, so did republican's Dubya and Paulson.  There is no spoon!  Just like their are no "sides".  No left, no right.  Only right, and wrong.  They are wrong, and on purpose, for if they bring America (doelarr) to it's knees, they have the world, and if they have the world then they can run it.  They want power over all things.  Also, I think anyone who wins a nobel should be suspect from the get go.

The most interesting thing for me is how will China et al respond to these blatant manipulations from the West?  We now know they will no longer be the largest purchaser of bonds, but will they continue to engage with the US in financial war?  I say WW III is on and popping, got gold?

Mon, 02/22/2010 - 23:25 | 241107 Anonymous
Anonymous's picture

They will continue to be the largest [indirect] purchaser of bonds, as that ensures the status quo. The alternative is a weaker dollar, diminished exports and hundreds of millions hungry and unhappy Chinese.

Your gold hoarding ambitions will also fall flat on their face. Gold prices will be suppressed in a concerted sovereign effort, lest you prefer to buy gold instead of clip coupons. Even if you're right and we actually get to a point where you would actually have use for gold, then you still won't be able to enjoy the rewards of your brilliant foresight because you will be afraid to show/tell you have gold.

Keep it real.

Tue, 02/23/2010 - 00:02 | 241150 macfly
macfly's picture

you nailed my concern about Au, the shops and gas stations don't take it if you have coins, and if its paper (ETF,mining stocks etc) it can vanish along with the institution that holds it.

Tue, 02/23/2010 - 00:23 | 241170 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

trading is not the matter the matter is value.  unless the earth gets hit by solar flares then Visa will rule the day.  and silver btw for gas, historical references aside.

Tue, 02/23/2010 - 00:17 | 241163 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Diminish exports"?  To whome will they sell their WallyWorld crap  to?  Americans have no money to purchase anything with.  "Hundreds of millions"......and they are chinesse.  good.  "we have too many people anyway" is what ;merica will say when faced with the fact that jobs are never coming back....The devil's advocate, and he will be causing a ruckus in the US in just a year or so.  Gold is undervalued right now.  That is all I am saying.

Tue, 02/23/2010 - 03:17 | 241265 PenGun
PenGun's picture

 Ten minutes after the credit cards go down gold will be happily accepted by many for food, guns and ammo. A 0.00 g scale is like $15 eh'.

Tue, 02/01/2011 - 01:04 | 922868 thebark
thebark's picture

are you really THAT impossibly stupid??...when the SHTF EVERYTHING will be supressed...  but dont think for a second that "exchange" centers or stores wont pop up to convert your gold into you can buy any god damn thing you want.

I have a great hold on to your US dollars!!...I`ll take my gold...and dont worry...I wont be showing or telling....and I`ll have a little extra ammo in case someone wonders why Im not getting skinny.

Mon, 02/22/2010 - 23:45 | 241130 jeff montanye
jeff montanye's picture

like geiththththner.  he's episcopalian you know (incendiary comment).

Mon, 02/22/2010 - 20:02 | 240851 faustian bargain
faustian bargain's picture

I wonder how much we're going to hear about this proposal in the news.

Mon, 02/22/2010 - 22:14 | 241024 Hephasteus
Hephasteus's picture


Mon, 02/22/2010 - 22:58 | 241077 Anonymous
Anonymous's picture

Ha, Ha, best laugh I have had all day

Mon, 02/22/2010 - 20:04 | 240854 john_connor
john_connor's picture

I think we need to get the populist fervor going again.  It was going strong up to the Mass. senate election and then everyone kind of quieted down after O announced the Volcker rule proposal.

We need to be relentless in calling our representatives and educating friends and family about the sad state of affairs.

Its time to vote nearly everyone out, and it will take a tremendous effort to do so.

Mon, 02/22/2010 - 20:24 | 240889 spekulatn
spekulatn's picture

Vote out all the bastards.

Love it, Sir Connor. 

Mon, 02/22/2010 - 20:38 | 240905 ghostfaceinvestah
ghostfaceinvestah's picture

Voting out Dems to vote in Rhinos, or vice versa, won't make a damn bit of difference.  Vote for third party candidates, anyone, doesn't matter.

A bipartisan jobs bill cleared a GOP filibuster on Monday with critical momentum provided by the Senate's newest Republican, Scott Brown of Massachusetts.

Mon, 02/22/2010 - 21:37 | 240986 Cistercian
Cistercian's picture

Yes.It is high time to remove all incumbents.They have to go.


Mon, 02/22/2010 - 23:36 | 241117 masterinchancery
masterinchancery's picture

By-- by all democrats AND Rinos, let the chips fall where they may. These criminals have bankrupted the country.

Mon, 02/22/2010 - 21:41 | 240990 john_connor
john_connor's picture

Voting Brown in was a must in order to destroy the filibuster proof majority.  In that context, and considering what is currently at stake, the Mass. senatorial election was the most important thing to happen in this formerly democratic republic in a long time.

In short, we must crawl before we walk, walk before we run, etc.

Otherwise I agree, nearly all Dems and Repubs should be replaced by third party candidates.

Mon, 02/22/2010 - 22:33 | 241049 jesus
jesus's picture

Actually, it seems to have had the opposite effect, which is maybe why the Dems fielded such a joke of a candidate. When they had the 60 majority they couldn't accomplish anything at all. Now that they have 59 it is very easy to employ parliamentary methods to get simple majority votes (ala Healthcare reconciliation).

Mon, 02/22/2010 - 22:38 | 241053 john_connor
john_connor's picture

thats hilarious.  We would already have a bill passed if it weren't for Brown.   Not to mention we would be staring down the barrel of cap and trade.

reconciliation is just another tool in the legislative process.

Tue, 02/23/2010 - 03:38 | 241268 jesus
jesus's picture

They had basically two years to pass anything they wanted. What did they do with it? Nothing but bicker and bullshit, along with Republicrat approved measures like bank blowjobs. The Dems can be counted on to be utterly worthless when in power.


Mon, 02/22/2010 - 23:37 | 241119 masterinchancery
masterinchancery's picture


Tue, 02/23/2010 - 10:18 | 241408 BoeingSpaceliner797
BoeingSpaceliner797's picture

Otherwise I agree, nearly all Dems and Repubs should be replaced by third party candidates.

Therein lies the dilemma facing we the people.  I agree with your viewpoint quoted above.  However, once this viewpoint reaches critical mass with the electorate, you can expect TPTB to coopt and corrupt third party candidates as well.  Just look at the Tea Party movement.  At almost the precise instant it gained momentum it was coopted by the likes of Glenn Beck, Sarah Palin, Tom Trancedo, et al. 

So, the trick is for, somehow, the electorate to reach this critical mass/momentum without it attracting any attention whatsoever from TPTB.  But this implies that critical mass can be achieved without getting the word out.  

Perhaps the only way out of this quagmire for us is a fail of epic proportions.  But what awaits us on the other side of the epic fail?

Mon, 02/22/2010 - 22:02 | 241018 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

There aren't many, but Paul wins straw-poll ("do you have any [electability] sir?"  I will never forget that moment) and Kucinich is awesome.  I am also smelling ventura in the mix (Secretary of Defense?).  Merkley is a new favorite, and I have to shout out to Defazio!  anyone stepping into the ring I hope considers no afiliation to either party.  this will be refreshing.  any way these true ladies and gentlemen go about politics, I hope they all get together and start the 3rd party, it is long overdue.

Ron Paul answers question at Debate:

Mon, 02/22/2010 - 23:55 | 241144 jeff montanye
jeff montanye's picture

don't get too hysterical.  obama seemed like a whole 'nother business as a candidate.  something about being elected, i guess.  possibly because he's so much older (and he's thought about it longer), ron paul may have a greater chance of translating his platform into reality, especially as much of it is able to be done via executive decision (or at least the part of his platform that i like, tee hee as my older sister says).

Mon, 02/22/2010 - 22:11 | 241023 milbank
milbank's picture

I assume by "vote nearly everyone out" you mean "and vote the other guys in" as the solution.

You're by definition, insane Connor.  How many times do you have to do that before you start to catch on to what's behind the curtain when it comes to "elections" and "choice"?

Mon, 02/22/2010 - 22:35 | 241050 john_connor
john_connor's picture

Milbank, please don't patronize me you dumbass.  Of course this is no longer a real democracy.  Perhaps you have another solution aside from voting in an independent candidate?  Maybe we should just not vote?  Please expand on an idea rather than pick apart sentences based on your preconceived assumptions.

Mon, 02/22/2010 - 23:58 | 241115 milbank
milbank's picture

"Vote nearly everyone out" is your solution?  Wouldn't that be a waste of time if "Of course this is no longer a real democracy." 

"This" never was a "real democracy."

I realize this is telling a child there is no Santa Claus but, that's the way it is and has been since the beginning of the country.

My solution?  Nothing.  There are things I can change and things I can't change. I trade stocks.  I make a shitload of money.  I live well and I'm doing fine.

Am I patronizing your childish rants again?

You betcha.

Grow up boy.  You're wasting ZH's bandwidth.

Tue, 02/23/2010 - 00:01 | 241148 jeff montanye
jeff montanye's picture

you underestimate the times in which you live.  depressions, especially deflationary depressions, are the furnaces in which radical political change is forged.

Tue, 02/23/2010 - 00:28 | 241161 milbank
milbank's picture

You don't say! 

Give me an example.

Tue, 02/23/2010 - 00:36 | 241179 jeff montanye
jeff montanye's picture

the closest comparison to our time is the 1930's which, in the english speaking world, for the first time in history, established a regime of recognized and powerful labor unions; regulation of the financial sector to avoid excessive leverage and a variety of frauds; national pensions and relief; and the (ultimate) defeat of a global fascist attempt to conquer the world.  it was in all the newspapers.  one might say but things aren't that different now.  and one might reply oh but once they were. 

Tue, 02/23/2010 - 04:14 | 241280 seadragonconquerer
seadragonconquerer's picture

Palderdash, pure palderdash. Anglo-Americans (pointman: Montagu Norman) financed Adolf, elbowed him eastward to take down Red Empire; then, when he followed instructions, backstabbed Germany with War Declaration. Recreating same old encirclement, and this time total destruction of Germany. So, who was it that actually "conquered world"? Looks like Anglo-Americans at behest of Zionist wirepullers (their cut: Israel). Same as now. And, by the way, your "newspapers" lied about everything back then, also same as now.

Tue, 02/23/2010 - 09:08 | 241340 jeff montanye
jeff montanye's picture

what, actually, is palderdash?  

some anglo-americans (including the bush family) financed germany, as it was (and is) a global economy.  some germans financed some anglo-americans too.  (and dutch the japanese and japanese the chinese...)  history is full of irony where trading partners end in war.  doesn't mean the war wasn't real.  hitler didn't follow his own generals instructions, to his vast destruction, so why would he follow whose, montagu norman's?  is that who made hitler attack russia?  it wasn't hitler's own virulent, self-proclaimed and highly documented anti-slav beliefs?  britain declared war on ussr before hitler attacked russia.  if it was a surprise to hitler, why not stop with the invasion of poland, which stalin was eager to tolerate (indeed profit from)?  your chronology of the early war period doesn't explain squat.  so britain, alone and barely armed, goes to war with the biggest military force in the world over the invasion of poland, suffers the blitz, the burning of london, as part of some sneaky, completely unknown plan (no wait, known to you and a tight circle of conspiracy mongers)?  hell yes the world, after six years of bloody total war was conquered by the anglo-americans but probably not at the "behest" of zionists.  they probably would have come up with a plan to get israel that didn't involve the death of millions of their co-religionists.  or is that all made up too?  further irony, problably only through those deaths was israel possible.  founded as a haven for jews from danger it is clearly the most dangerous place for jews now and for the last fifty years.  and the newspapers don't lie about "everything".  they lie about plenty but many actual events that did occur appear in them from time to time.  your sources are, of course, unimpeachable.


Tue, 02/23/2010 - 09:15 | 241345 jeff montanye
jeff montanye's picture

hit save instead of preview.  above should say britain declared war on germany before hitler attacked russia.  sorry for the confusion.

Tue, 02/23/2010 - 10:27 | 241405 milbank
milbank's picture

You are so naive Jeffrey.  So naive.

It's obviously tough for you and the John Connors of the world (which are most people) to have your fairytales about our government and how the world is run in general, assaulted by reality like they are now.

Tue, 02/01/2011 - 00:32 | 922818 thebark
thebark's picture

its really entertaining to listen to all the History experts on ZH run on and on with their intrepretation of what happened 50 years ...truth is NONE of you fucksticks know shit... all you are doing is offering an opinion you read shut the fuck up if you cant post something worthwhile.

Tue, 02/23/2010 - 03:04 | 241261 nevket240
nevket240's picture



Bonaparte France



Tue, 02/23/2010 - 00:33 | 241175 milbank
milbank's picture

OK Jeffrey or should I call you "Poor Richard."  I've waited as long as I could.  I'll look forward to seeing your answer in the morning.

Tue, 02/23/2010 - 00:37 | 241181 jeff montanye
jeff montanye's picture

you got a short fuse milbank.  look up.  

Tue, 02/23/2010 - 00:39 | 241185 jeff montanye
jeff montanye's picture

p.s. elucidate the poor richard reference.  it can't be franklin.  what is it?

Tue, 02/23/2010 - 09:46 | 241377 jeff montanye
jeff montanye's picture

i googled poor richard and found a blog with no comments.  is that it?  strikes me as obscure but then i'm new to these parts.

Tue, 02/23/2010 - 01:01 | 241204 Wondering
Wondering's picture

Very needy...and its way past obvious

Tue, 02/23/2010 - 08:52 | 241332 john_connor
john_connor's picture

Voting nearly everyone out at least gives the opportunity for a fresh start, rather than stay mired in the status quo.

Regarding our socio-political system, yes I agree with you, this was never a real democracy.  But there were times when we had at least had the illusion of a democracy.  No more, especially after the recent Supreme Court decision.

Anyway, I digress.  I also make a nice amount of money trading stocks.  The last time I checked, however, ZeroHedge is not a trading blog.  When there is an article posted regarding legislation pertaining to our debt limit, a post regarding politics in general is not out of context. 

And Milboy, you are not the arbiter as to what is a waste of ZH's bandwith.  So please, foke off, ole' chap.

Tue, 02/23/2010 - 09:51 | 241380 deadhead
deadhead's picture

 The last time I checked, however, ZeroHedge is not a trading blog. 

This is correct and many who visit ZH seem to assume it is.

I am bearish as can be, but I go long and short in my trading since the action started up in 2008.....

Tue, 02/23/2010 - 11:23 | 241464 milbank
milbank's picture

"But there were times when we had at least had the illusion of a democracy".


I understand your continuing to insult me.   I threaten you . Wrapping your brain around reality, leaving the Santa Claus fantasy makes you want to kick and scream, lash out and have a tantrum at the person telling you Santa is just a fairytale. 

Who are you kidding?  You don't trade squat.  Not someone like you.  Your a "401K buy and hold until its taken from you" at best.

When there is an article posted regarding legislation pertaining to our debt limit, a post regarding politics in general is not out of context. 

Sharing your ignorance and child-like solutions are. 

The depth of poster comments has dropped considerably over the last six to eight months. 

It's my fault for reacting to your original post.  I should have just moved on like I usually do with posters like you.





Tue, 02/23/2010 - 12:25 | 241594 john_connor
john_connor's picture

I understand your continuing to insult me.   I threaten you . Wrapping your brain around reality, leaving the Santa Claus fantasy makes you want to kick and scream, lash out and have a tantrum at the person telling you Santa is just a fairytale.

You are talking to the wrong person and are typical of someone who attempts to coalesce any comments into their preconceived world view.  I am the last person who believes such a fairytale.  Who the phuck is Santa Claus anyway?

Who are you kidding?  You don't trade squat.  Not someone like you.  Your a "401K buy and hold until its taken from you" at best.


It's my fault for reacting to your original post.  I should have just moved on like I usually do with posters like you.


The depth of poster comments has dropped considerably over the last six to eight months.

No doubt, it just dropped even more with your ignorant posts.  I've been a member here since shortly after it started and have rarely seen a pompous asshole like yourself.

Tue, 02/23/2010 - 14:20 | 241858 Anonymous
Anonymous's picture


Tue, 02/23/2010 - 00:54 | 241199 Wondering
Wondering's picture


Mon, 02/22/2010 - 20:07 | 240861 Anonymous
Anonymous's picture

Ah, time to whip out the old "Rollerball" movie!

Mon, 02/22/2010 - 20:26 | 240862 lizzy36
lizzy36's picture

One wonders if the dept/gdp hits +130% will the POS rating agencies finally downgrade the US (maybe to a AA)?

Alas if that were to occur, turbo timmy "the U.S will never lose it's AAA" will be begging Tyler for that 10 year fast forward. 

Mon, 02/22/2010 - 20:43 | 240908 Miles Kendig
Miles Kendig's picture

The ratings agencies are part and parcel of the National Security State so even if the US hits 10K% debt to GDP the country would still have a AAA rating as valid then as it is now.

Mon, 02/22/2010 - 20:54 | 240925 deadhead
deadhead's picture

unfortunately, Miles is absolutely correct.

Mon, 02/22/2010 - 21:33 | 240980 I am a Man I am...
I am a Man I am Forty's picture

Gotta love the ratings agencies.  Always so on top of things.

Mon, 02/22/2010 - 20:59 | 240932 knukles
knukles's picture

Hey, ever stop and wonder all the swaps and swap counter-parties, collateral calls, ratings, dependent ratings, portfolio guideline violations and the like get triggered if USA looses its AAA?

The boys at Goldman would be rolling in a flood of asset and liability restructuring transactions!  Thought TARP was a bonus machine!  HAH!  Now that'd be BIG business! 

Tue, 02/23/2010 - 10:22 | 241417 Anonymous
Anonymous's picture

Not to mention the JPM 15-digit IR swap book. Does that come with a reboot button or flush handle? Oh, and FYI - Stiglitz was nicely compensated for his work on this report. Big shock.

Mon, 02/22/2010 - 22:56 | 241075 Anonymous
Anonymous's picture

No, No , No Lizzy, you don't understand this at all.
A new rating will need to be created ,,,,AAAA
Thats how this game least till now

Mon, 02/22/2010 - 20:13 | 240872 Going Down
Going Down's picture


"Bring'em On"


Mon, 02/22/2010 - 20:13 | 240873 suteibu
suteibu's picture

Kabuki 2.0.

What the hell...maybe a fight will break out.

Mon, 02/22/2010 - 20:15 | 240874 Anonymous
Anonymous's picture

So, it's not a debt if you hide it?
Stupid me!

Mon, 02/22/2010 - 20:33 | 240897 Rainman
Rainman's picture

HuffPo has a front pager on debtors coming out of the closet. Like perps at the stationhouse holding up signs with their debt numbers: $ 100,000, $ 120,000, etc. One recent grad said her student debt is more than her parent's HOME !!

Now it's become like a weenie measuring contest.

Mon, 02/22/2010 - 20:58 | 240930 deadhead
deadhead's picture

another in a series of great HuffPo headlines.  

Obama and that little phucking dick Rahm should be frightened by HuffPo.  It is the home of the Obama worshipers yet they are almost as brutal as many (most) of us ZHers.  It is hysterical to watch everyday.  I will tell you this: the Obama worshipers are absolutely stunned (and heartbroken) that their messiah of change is owned by the Fed and Wall Street. 


Mon, 02/22/2010 - 21:19 | 240959 Rainman
Rainman's picture

Jesus and Muhammad could have been on the GOP ticket together in '08 and they still would have lost. Therefore, the sensible thing for the American Idol crowd to do was to vote for a dude who never even ran a Burger King restaurant but is a professional at running his mouth. 

Now that Obama has the health care message all fucked up and confused, his solution is to fuck it up some more. Hail to the Chief !!

Mon, 02/22/2010 - 21:49 | 241002 john_connor
john_connor's picture

ROTFL LMAO.  Good stuff.

Mon, 02/22/2010 - 21:55 | 241009 Miles Kendig
Miles Kendig's picture

Classic Rainman

Mon, 02/22/2010 - 22:00 | 241013 deadhead
deadhead's picture


gotta love the Rainman.....

Mon, 02/22/2010 - 23:04 | 241088 Anonymous
Anonymous's picture

The Obama worshippers arestunned, so stunned that I generally don't even pull a "I told you so"
when I get asked "what happened"
His collapse has even shocked me...but it was obvious he
was taking on too much at one time. Anyone with
a lick of experience at management could see this

Tue, 02/23/2010 - 00:17 | 241164 jeff montanye
jeff montanye's picture

don't kid yourself that obama's problem is a lack of managerial experience.  robert mcnamara had plenty but lincoln had none, jesus had none, gandhi had none.  how much did alexander the great have before he conquered the "world"?   obama's problem is he's an incremental man in a discontinuous time.

Tue, 02/23/2010 - 10:45 | 241440 Anonymous
Anonymous's picture

Understood Jeff, but I bet lincoln , gandhi and Alexander
had experience that we just don't know about.
Obama is naive, jaw dropping naive.
As for McNamara and others of his ilk, they are just evil...

Tue, 02/23/2010 - 01:59 | 241231 Anonymous
Anonymous's picture

Anyone that voted for him is in no position to be asking "what happened"--they got EXACTLY what they wanted.

They didn't want someone with a record of success and failure. They wanted an empty vessel they could project all their feelings of inadequacy onto, so that by voting for him they could give themselves a big hug and feel better about themselves.

Obama bought by the banks? Obama's all style and no substance? Obama lacks leadership skills? Obama great at campaigning, lousy at policy? This was all apparent way before he became a serious candidate. The press annointed him a "rock star" in 2004 and the American Idol public creamed their jeans. They didn't want to know whether he was up to the job, and they didn't care. It was all about THEM and how voting for Obama would make THEM feel.

He (and Bush) perfectly embody 3 generations of American cultural decline--emotionally scarred individuals with parental disassociation/abandonment issues who have had the roads of life cleared for them by others, yet think they earned it themselves every step of the way.

He's screwed just about everything up, in no small part because the people who voted for him screwed it up too. They got what they wanted. And that's not Obama's fault.

When people get what they asked for, but are disappointed anyway, it's usually because they were not careful about what they asked for in the first place.

Mon, 02/22/2010 - 23:41 | 241125 masterinchancery
masterinchancery's picture

Wow, as Heinlein said, ignorance is its own capital punishment.

Mon, 02/22/2010 - 20:17 | 240876 Anonymous
Anonymous's picture

Thank you TD!!

Mon, 02/22/2010 - 20:20 | 240882 Rainman
Rainman's picture

The World is busy wagging their fingers at the Greeks !! Uncle Sugar is their Undercover Brother.

The currency of deceit remains the same. More bullshit.

Mon, 02/22/2010 - 20:21 | 240883 spekulatn
spekulatn's picture

This here be a fookin beautiful post ZeroHedge!

Well done Tyler D.

Mon, 02/22/2010 - 20:23 | 240887 baserunr
baserunr's picture

In his best British accent...

""Technical Default" is such a harsh phrase.  We much prefer "capital challenged condition".  Please don't act so doltish.  How will that look to our friends across the pond?  Your bankers in the states clearly understand things, eh what?"

The bankers may not, but a lot of the rest of us do!

Mon, 02/22/2010 - 20:54 | 240923 junkyard dog
junkyard dog's picture

baserunr, I am not sure what a technical default is. But I do know what a testicle default is. A testicle default is when the perp, after running half way across the yard, realizes he can't make the fence, so, he turns around and takes me on face to face.

Mon, 02/22/2010 - 21:27 | 240971 MsCreant
MsCreant's picture

Gooood puppy. [scratches vigorously behind the ears, offers him a nice thick cut T-bone steak] Good boy! Now get that other, nasty thing out of your mouth. Not good for doggies!

Tue, 02/23/2010 - 00:43 | 241187 jeff montanye
jeff montanye's picture


Mon, 02/22/2010 - 20:40 | 240907 Miles Kendig
Miles Kendig's picture

Where was Garrett's concern in 2008 or 2009?  More phony politics from phony politicians who are engaged in a never ending process of keeping the citizenry engaged in endless rounds of O2 wasting.

Mon, 02/22/2010 - 21:31 | 240977 MsCreant
MsCreant's picture

Miles, I can't decide if there is a plan, there isn't a plan, or there are lots of competing plans. Or maybe a general idea how it will go for certain classes, and each one left to navigate and cooperate in the biggest game of Risk(tm) ever known to mankind.

Mon, 02/22/2010 - 22:29 | 241041 Miles Kendig
Miles Kendig's picture

Perhaps all of this is simply a case of revenge of the nerds doing a little payback for all of the grief some POS gave them when they were little.  Which is why the politicians have been targeted. Too stupid to know or understand, to vain to ask or care.

Tue, 02/23/2010 - 01:20 | 241211 MsCreant
MsCreant's picture

Hope you see this. I am having technical difficulties. I think I forgot some key things if you follow me.

Tue, 02/23/2010 - 09:42 | 241344 Miles Kendig
Miles Kendig's picture

:-)  Remember, others are ususlly there to help with those pesky details.  However, we are all here to do what we are are here to do.  No more or less.  Trust yourself and trust others to simply be themselves.  peace

Tue, 02/23/2010 - 10:35 | 241433 Anonymous
Anonymous's picture

You should listen to Celente's latest interview (.mp3) at King World News. It is up to date (save for the latest "errant" missile strike) and concise on what OUR plan should be.

Mon, 02/22/2010 - 20:53 | 240922 colonial
colonial's picture

we're still a few years away from crisis.  Plenty of time to keep our heads in the sand.  Surprisingly Big Al Simpson continues to grant interviews saying he's going to save the day for his grandchildren.  Hey Tyler, you and Marla ought to consider giving Al a call.  I bet readers here could provide him with some pretty good talking points.

Mon, 02/22/2010 - 21:13 | 240953 Crab Cake
Crab Cake's picture

We haven't left crisis, we're just between crescendos.  When I hear on the radio or tv someone speak about the financial crisis in the past tense, it makes me want to puke.

Mon, 02/22/2010 - 21:36 | 240985 35Pete
35Pete's picture

I see this from a hurricane analogy point of view. 

2008 was the outer bands. We haven't even hit the front eye wall yet.

Mon, 02/22/2010 - 21:00 | 240929 Zippyin Annapolis
Zippyin Annapolis's picture

The spread between treasuries and gse paper narrowed since the gses were put into "Receivership" by Paulson (via the Tarp legislation) because the Chinese bitched and evidently could be bamboozled into thinking the gse paper now had the "full faith and credit" of Uncle Stupid behind them. Note that every gse piece of paper now has a red herring notice which says "not backed by the full faith and credit of the US government".

Importantly the Treasury has now given the gses an Unlimited Credit backstop as allowed under the Tarp/ bailout legislation. The gses continue to buy the crappiest paper in order to prop up the housing market. So at the end of the day the gses should be on Uncle Stupid's balance sheet unless and until their loan portfolios are broken up and sold and the "securitization" functions are roped in and privatized as a utility.



Tue, 02/23/2010 - 00:49 | 241196 jeff montanye
jeff montanye's picture

one small quibble:  i thought that the legislation authorizing the gse bailout had a limit of some 300 or 400 billion in total loan face value (not losses).  and the treserve just took it on themselves to guarantee all losses in perpetuity.  is this wrong (please cc. john hussman)?

Tue, 02/23/2010 - 11:00 | 241458 Anonymous
Anonymous's picture

see UST Christmas Eve '09 announcement.

Mon, 02/22/2010 - 21:01 | 240936 Crab Cake
Crab Cake's picture

The country is insolvent.  That's it people, it's done. 

I know it seems like there is a reason to go to work and carry on as usual, but really there is not.  The ship is going down.  TPTB are just hoping you people stay good little sheep and go about your business in the usual manner.  F'em. 

I wonder if they include the wars in the GDP stats too?  My guess is no. 

Mon, 02/22/2010 - 21:03 | 240939 Anonymous
Anonymous's picture

We should really be counting the negative book value of the GSE's toward the federal debt. There are assets there, even though we all know they are worth far less than carried value. Maybe this would add another 1 - 2 trillion to the debt.

Mon, 02/22/2010 - 21:19 | 240956 deadhead
deadhead's picture

Ding a ling....Ding a ling

BB: "Hello, FreeMoneyHelicopter Sales and Service, may I help you".

Rahm: "Fuck you Bernanke and don't think just because I jammed your nomination through that you can be phucking independent of it?"

BB: "Okay Rahmmie, watcha need?"

Rahm: "Listen, that phucking little Repub turd from New Jersey is trying to make a stink about us including all of the Fanny and Freddie diarrhea in the U.S. debt.  You know that's a big problem if it gets any legs.  Who could be stupid enough to go along with that?"

BB: "Well, your Budget Director Peter Orzsag for one....."

.....sounds of apocalyptic vein busters bursting in Emanuel's head.....


.....sounds of electronic data bits rattling in the financial etherworld as Ben does a quick $25 Billion print to support the 2:30 SPY run.......

BB: "Relax, Rahmmie boy, it's not like I'm Fitzgerald with those Chicago Blago tapes,  I'm here to honor my deal for getting another 4 years at the printing press."

Rahm: "So, what are you going to do for me, I mean the President?"

BB: "Rahm....the zimbabwe zombie known as Fannie/Freddie cannot be considered part of the USA's debt if it is owned privately and there is no US government involvement's really quite academic...."

Rahm: "Listen phucknuts, we are up to our mid colon with Fanny/Freddie and everyone knows it"

....slight pause of silence, followed by a rapid and confident clicking of a computer keyboard...then, a slight chuckle......

BB: "Problem solved Rahm.  I just bought Fannie and Freddie and the Treasury is released from the unlimited US line of credit"

Rahm: "Fucking eh....Lloyd was right, you are the man!"

BB: "Anything else?"

Rahm: "Can you buy, say, another trillion in Treasuries for the mid terms????"


Mon, 02/22/2010 - 21:30 | 240974 Shameful
Shameful's picture

I love when you do these!  Though part of me wonders how close to the reality it is....

Mon, 02/22/2010 - 21:39 | 240988 MsCreant
MsCreant's picture

So Ben, quite literally and a bit metaphorically, got a Rahm job.

Mon, 02/22/2010 - 22:49 | 241066 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

haha, rahm job!

Mon, 02/22/2010 - 21:50 | 241004 I am a Man I am...
I am a Man I am Forty's picture

This needs comic book captions....awesome DH!!

Tue, 02/23/2010 - 01:23 | 241213 MsCreant
MsCreant's picture

I see it full dramtic color and bold dark lines. Awesome back at cha'.

Mon, 02/22/2010 - 23:19 | 241101 ShankyS
ShankyS's picture

+100 LMAO Nice one DH!

Mon, 02/22/2010 - 23:32 | 241112 Tethys
Tethys's picture

+100  Thanks, I needed that.  Especially in times like these, it helps to remember: NEVER lose your sense of humor.

Mon, 02/22/2010 - 23:48 | 241135 masterinchancery
masterinchancery's picture

How did you get that tape?


Tue, 02/23/2010 - 00:30 | 241173 deadhead
deadhead's picture

NSA connection.

Sorry to disappoint you BB, but you don't control those characters.



Tue, 02/23/2010 - 00:52 | 241197 jeff montanye
jeff montanye's picture

on a darker note, isn't ben's term longer than four years?

Tue, 02/23/2010 - 11:03 | 241461 Anonymous
Anonymous's picture

While I always find these humorous and entertaining, DH, I do believe you have the master-servant relationship reversed. Much more likely that BB cracks whip than Rahm. Although it is far more likely that each of these tools is the unseen master's biatch.

Mon, 02/22/2010 - 21:24 | 240968 HarryWanger
HarryWanger's picture

Talk about debt: "

'Doomsday is here for the state of Illinois' It will take a massive tax increase -- and $2 billion more in cuts -- to reach solvency, group says

Fun times!

Mon, 02/22/2010 - 21:30 | 240975 Anonymous
Anonymous's picture

20 unemployed vie for every one NYC position

No recovery here.

While economists say the Great Recession has ended and numbers out of Washington say the economy is growing at a robust pace, the local jobs picture remains bleak -- with just 21,500 city jobs in the state Labor Department's Jobs Bank for the 425,000 unemployed to fight over.

That works out to 20 people vying for every position

Mon, 02/22/2010 - 21:45 | 240992 MarketTruth
MarketTruth's picture

Here's the REAL deal:

DOOR #1: The Fed bought Fred and Fan paper. It is ILLEGAL for them to do so unless it is EXPLICITLY guaranteed by the US Gov. Since it is not at this point in time, the Fed goes to jail, does not pass go, does not collect 200 (trillion) dollars.


DOOR #2: If, on the other hand the US Gov does EXPLICITLY guarantee Fred and Fan, it MUST BE ADDED TO THE DEFICIT and then the Federal Reserve is safe but that National Debt will be a biggie add-on!


DOOR #3: If the US Gov EXPLICITLY guarantees Fred and Fan and makes the Fed safe yet DOES NOT add this liability to the National Debt, then the US Gov is illegally 'cooking the books'.


So which door will it be? #1 Fed goes to jail, #2 and Nation Deficit is toast, or #3 commit massive fraud?

Mon, 02/22/2010 - 22:05 | 241008 Crab Cake
Crab Cake's picture

I don't necessarily disagree with your logic, but what does it matter if there aren't any cops?

What is one to do when the cops are backing the crooks? 

That is the situation we are in presently, in which case #1 and #3 are irrelevant in practicality.

Mon, 02/22/2010 - 23:51 | 241140 masterinchancery
masterinchancery's picture

As we say in Chicago, the fix is in.

Tue, 02/23/2010 - 01:27 | 241215 MsCreant
MsCreant's picture

We are Mexico!! TriYiYiYiYi!!!!

Mon, 02/22/2010 - 22:16 | 241025 deadhead
deadhead's picture

re: Door #1....a strict reading of Fed Reserve Act of 1913 does state it is illegal to purchase anything other than US guaranteed paper.  However, the emergency powers provision grants broad leeway, which (to the best of my knowledge) has never been litigated.  If it were to be litigated, besides taking years, my guess is that the Fed would get a pass due to emergency powers.  Even if the SCOTUS ruled otherwise, there is NO penalty provision so jail/criminal is out of the question.

Door 2 & 3....fannie/freddie purposely puts the "not guaranteed by US gov't" on its prospectus.  there's a reason for that.



Tue, 02/01/2011 - 00:44 | 922837 thebark
thebark's picture

well theres bullshit under every this if you have the mental ability....

Mon, 02/22/2010 - 21:43 | 240994 IveBeenHad
IveBeenHad's picture

wgas, wgaf

including it changes nothing as anybody that is investing in the debt of this country is aware of this guarantee. 

Mon, 02/22/2010 - 21:45 | 240999 rawsienna
rawsienna's picture

A little drunk tonight but who the f**k cares.  Its only 4-500 bb ... not 6.3 trillion. Meant to comment on the GSE buyouts the other day but forgot.  Remember how Wells Fargo had all that profit from marking up their servicing rights. Well, guess they will be marking em right back down thanks to the buyouts.  Sorry, couldn't resist. 

Mon, 02/22/2010 - 23:13 | 241096 Anonymous
Anonymous's picture

Speaking of Wells Fargo, I got a personal call from
the local branch manager when I bought a shit load
of gold with my WF checking account .When I didn't return the call, I received another one, which I also didn't return
Very interesting.....

Mon, 02/22/2010 - 23:54 | 241143 deadhead
deadhead's picture

241096...please call the br mgr back to see what he/she says and then report back to should be most interesting.

by the way, i spent years in banking and we tried to mine data for cross sells but i can't recall a bank looking at payees on processed checks.....



Tue, 02/23/2010 - 10:49 | 241444 Anonymous
Anonymous's picture

Sign of the times, I guess deadhead. I have been a bank
account for 35 years and have never been called before.
They are definitley data doubt desperate...

Tue, 02/23/2010 - 01:05 | 241174 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

I believe the Patriot Act dictates that your friendly banker is obligated to report anything at all "unusual" to the Feds.  He may well be seeking from you an explanation of the cash movement so that he can complete and submit to the Feds a "Suspicious Activity Report", which he is not to tell you he is doing....

Tue, 02/23/2010 - 00:49 | 241182 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

This may shed some light on your bankster's interest in your activites, and may also piss the hell out of you.  Watch the clip to the bitter end...

and then re-read 1984 for a refresher....

Tue, 02/01/2011 - 00:46 | 922839 thebark
thebark's picture

Dont worry.... I`m sure the IRS will stop by....LOL

Mon, 02/22/2010 - 21:50 | 241005 Anonymous
Anonymous's picture

You guys love to WASTE YOUR TIME.

This Bill is DOA (Dead On Arrival).

Nothing will ever change the current adminstration policies.

This is a Kingdom, the king rules, you peasants STFU!!

Mon, 02/22/2010 - 22:01 | 241016 Anonymous
Anonymous's picture

They aren't considered to be part of US sovereign debt because the fed owns all of their liabilities and will transfer the proceeds to the treasury at the end of every year. Also if they want to default on the obligations they can technically not default on their other liabilities through some magic loophole.

Mon, 02/22/2010 - 22:26 | 241039 trav7777
trav7777's picture

Eh...we need to know the losses embedded in the FNRE portfolio to know what the true liabilities are.

I'd wager that there's another few hundred bil at least, maybe more like a trillion in losses sittin on the Fed's balance sheet, too.  Lord knows what they swapped FRNs for at TAF/TALF.

But the rule is, must...not...force...price...discovery.

That would be immediately fatal even though everyone in the room knows that the jig is up.

Tue, 02/23/2010 - 00:47 | 241193 Assetman
Assetman's picture

Price discovery is, indeed, and issue.  It's something that perhaps a {real} indepedent auditor could determine within a $100 billion or so.

The Feds need to realize they aren't fooling anyone.  These liabilities have full faith and credit.  Forget that the Feds own 79% versus the threshhold 80%-- these are simply liabilities of the U.S. government that are treated off-balance sheet items.

It's (again) illustrative to the degree this Administration is willing to go to say one thing (tranparency)-- and do totally the opposite (hide massive liabilities).

From a tactical stanpoint, the Republicans are smart to bring it up.  It doesn't mean I'll vote for one, though...

Tue, 02/23/2010 - 00:57 | 241201 jeff montanye
jeff montanye's picture

nicely put assetman.  does not even ron paul seem a trifle seductive?

Mon, 02/22/2010 - 22:29 | 241043 Anonymous
Anonymous's picture

Why not include "unfunded liabilities" too?

Just because those debts are owed to American workers and not anonymous bond holders doesn't make them not exist, in fact it makes "cuts" politically impossible.

$107,000,000,000,000.00* in unfunded liabilities isn't insignificant and can't be ignored.

*that aint all our debts either and it excludes all our current war liabilities (like injured troops that will need lifetime care)

Mon, 02/22/2010 - 22:55 | 241074 poydras
poydras's picture

Freddie and Fannie == Jedi and Chewco

Mon, 02/22/2010 - 22:59 | 241081 Anonymous
Anonymous's picture

By this logic, all TLGP debt should be added on as well. For that matter, all debt for corporations deemed TBTF.

Tue, 02/01/2011 - 00:49 | 922844 thebark
thebark's picture

yes...and why we are at it we need to toss in the 800 trillion in derivities that the TBTF Banks have hidden.....since we`ll be paying that off some soon too !

Mon, 02/22/2010 - 23:07 | 241090 Arm
Arm's picture

LOL.  Check it out.  Somebody has hacked the Bloomberg website.  Redirects to or some site like that.  I hope that crap does not have malware.

Anyways, I guess if somebody deserves to get hacked for selling lower body cavities to the highest bidder, than that would be Bloomberg (ok, Fox and CNBC deserve it way more)

Mon, 02/22/2010 - 23:21 | 241102 Fix It Again Timmy
Fix It Again Timmy's picture

Let's take debt envy to the MOON! Only girlie-men are afraid of debt...

Mon, 02/22/2010 - 23:23 | 241106 Anonymous
Anonymous's picture

This is just a political game.

The GSEs have assets, i.e. mortgages. The only significant asset the federal government has its legal entitlement to rob the populace. In the federal government's case, using greoss debt-to-GDP is appropriate. If you wanted to include GSE debt in computing debt-to-GDP, you should add only the excess of liabilities over assets, marked to market.

Of course, all the U.S. has to worry about is net external debt denominated in a foreign currency, i.e. $NIL. In Greece's case, gross debt = gross external debt = net external debt - net external debt denominated in a foreign currency = a big problem.

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