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Treasury Anticipates $700 Billion Gross Borrowing Need By End Of March 2011, To Bust Debt Ceiling In Q1

Tyler Durden's picture


The US Treasury has just released its revised debt issuance/funding schedule for the Q4 as well its fresh estimates for Q1 2011 borrowing needs. While much of this will certainly be re-revised as it will likely soon become a function of massive QE2 driven demand than supply, as of today, the Treasury is expecting that it will have $362 billion in net marketable issuance in the current quarter (as cash balances decline by $10 billion), although the kicker is next quarter, where the Treasury now anticipates the issuance of $431 billion, in addition to a cash decline of $30 billion, implying over a $460 billion change in net debt levels. Now for some back of the envelope math: with the UST having already issued $97 billion in debt in October (per DTS), it means that Geithner anticipates issuing $265 billion in November and December. It also means that $431 billion has to be issued in January through March of 2011. Furthermore, as the most recent cash balance was $18.4 billion (ex SFP), this number will need to be replenished to $70 billion by March 2011, implying the need of another ~$52 billion in incremental debt funding. Altogether this means that roughly $750 billion in additional debt will have to be issued over the next 5 months. And since the most recent number of total debt subject to the ceiling was $13.609 trillion, adding $748 billion to this number results in $14.357 trillion. Which just happens to be $63 billion more than the recently revised debt ceiling of $14.294 trillion. Thus the US debt ceiling will have to be revised higher one more time, most likely in February or March of 2011.

We say likely, because as QE2 will suck up about $100 billion in Treasury issuance per month, and thus result in virtually zero net new issuance, the Treasury will likely be forced to emit even more Treasuries to make sure the entire curve does not pancake and lead to a collapse for the banks whose 6 Month - 30 Year funding carry trade goes extinct.

The full revised debt issuance schedule is presented below:

To say that the UST's Q1 issuance was greater than expectations, is an understatement. Even Goldman was surprised by the funding needs in Q1, and has some interesting reads on what it may mean for taxation assumptions:

Treasury cuts Q4 net borrowing estimate from $380bn to $362bn vs. GS $330bn.

Treasury estimates Q1 net borrowing at $431bn vs. GS $350bn.

1. The Treasury trimmed its Q4 borrowing estimate by only $18bn, much less than the $50bn we had estimated.  However, most of the difference is accountable to a higher cash balance in Treasury’s figures relative to our own—$300bn vs. $275bn.  Hence, no major surprise here.

2. The same cannot be said for the first quarter, where the Treasury estimates a $431bn net borrowing need despite a $30bn assumed reduction in its cash balance.  We have been estimating $350bn with no change in the cash balance, a difference of more than $100bn in underlying financing needs (i.e., net of changes in the cash balance).  While the Treasury does not amplify on the assumptions underlying its estimates, one possible explanation is that the agency does not want to assume the extension of any tax cuts until legislation actually passes.  We, on the other hand, are assuming an extension along the lines long proposed by the Obama administration.

3. If the Treasury’s figures are right, they would imply that the agency has less room than we had previously thought to reduce the sizes of coupon auctions, though we are reluctant to push this interpretation too strongly given the sizable uncertainties that exist on these estimates.

In other words, as we have been saying all along, Geithner will be forced to come up with greater issuance sources soon, due to both the funding needs, and the QE2 demand pull.

As for the debt ceiling, it may soon be the case that raising it will not be the trivial formality for Congress it has traditionally been, especially once Republicans retake Congress which is now a given.

We read the following in Dow Jones:

A senior House Republican said Friday he would push for a direct up or down vote to increase the federal government's borrowing capacity early next year.

Rep. Eric Cantor (R., Va.), who is almost certain to become the Majority Leader if the Republicans retake the House in the mid-term elections on Tuesday, said he wouldn't continue the recent history of using parliamentary procedure to disguise the vote's occurrence.

Cantor was speaking on a conference call alongside Robert Hurt, a Republican state senator, who is contesting Virginia's 5th District against freshman Rep. Tom Perriello (D., Va.).

Cantor said he hoped Republicans would be able to establish a track record on fiscal discipline before a vote to increase the total amount of debt the federal government is legally allowed to carry on its books.

The current federal debt total stands at around $13.7 trillion. The debt ceiling was lifted by Congress early in 2009 to $14.1 trillion. That probably sets up a need to increase that limit further in the first two months of 2011.

Democrats routinely used arcane parliamentary procedure to allow some of their members to disguise their vote on increasing the debt ceiling.

Even though the vote itself is largely a formality because the funds have already been spent by the Treasury, Democrats feared Republicans would seek to use a vote in favor of increasing the total the federal government can borrow as a political weapon. Next year, if the polls are correct and the Republicans take back control of the House, the shoe will be on the other foot and it will be up to them to lift the debt ceiling.

This could be an especially tough vote for Republicans who have attempted to make the midterm elections a referendum on Democratic spending in many parts of the country.

In the extreme unliklihood that Congress failed to increase the debt ceiling, the U.S. could be forced to default on its debt obligations. In that extreme scenario, global markets would be roiled, the value of the dollar could plummet and the U.S. economy abruptly pushed back into recession.

Ah, the sad reality of just how pathetic debt ceiling raise-to-debt ceiling raise US financial existence has become...


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Mon, 11/01/2010 - 15:54 | 691449 SpeakerFTD
SpeakerFTD's picture

Thus the US debt ceiling will have to be revised higher one more time, most likely in February or March of 2011.

Or not.  Time to find out if these Tea Partiers we are electing are worth a damn.

Mon, 11/01/2010 - 15:55 | 691451 Ivanovich
Ivanovich's picture

Get out of my head! :)

Mon, 11/01/2010 - 15:56 | 691457 SpeakerFTD
SpeakerFTD's picture

Fine, then stop using my avatar.

Mon, 11/01/2010 - 16:00 | 691471 Ivanovich
Ivanovich's picture


Mon, 11/01/2010 - 16:01 | 691474 Sean7k
Sean7k's picture


In addition- bankruptcy bitchez! Bring on the collapse of the USA.

Mon, 11/01/2010 - 16:35 | 691559 knukles
knukles's picture

BTW and just for fun.
There is no indenture relating to treasuries, and thus, no provision for (an event of) cross default. 

How'd 'ya like them for coupon payments, eh?

Well, at least some of the young boogger pickers on some sophisticated trading desk somewhere can win a bar bet over that one.  And you don't need to call corporate counsel, neither.  The info does not exist, no written process or procedures, no documentation, nada, nothing to reference.  Go tell your head treasury trader!  Quick, make a splash!

God, what great political theater this shall bring! 
Shirley, stock up on popcorn! 

Mon, 11/01/2010 - 16:51 | 691607 justbuygold
justbuygold's picture

   $750 BB over 5 months =  $5 BB per day !   WOW !

Mon, 11/01/2010 - 16:06 | 691494 chet
chet's picture

The GOP will raise the debt ceiling, and very likely through parliamentary procedure, despite what Cantor says.

Those of you who think this election is really going to change something are in for a heck of a disappointment.

Mon, 11/01/2010 - 17:07 | 691603 Bugman82
Bugman82's picture

I agree 100%.  Just watch videos like: which discuss this political nonsence.

The conservatives will just blame raising the ceiling on "oh, the troops need us".  The truth of the matter is the talk of cutting government down is hogwash.  They will have to start with the big pieces of the pie (medicare, social security, and other entitlement programs).  Austerity meassures would be instant political suicide.  Reagan increased government spending, Bush increased government spending.  It is giving people money that gets their votes.  It's a cycle that literally can't end.

Plus we have this wonderful little study:   Sorry, people don't get and never will until history looks back on our country decades in the future.

Mon, 11/01/2010 - 16:51 | 691606 xenophobe51
xenophobe51's picture

Plus one.

Mon, 11/01/2010 - 18:19 | 691782 Hedge Jobs
Hedge Jobs's picture

there is no "debt ceiling" anymore it is now called the "debt stratosphere" and treasury have a joint venture with NASA to work out how they can raise the "debt stratoshpere" to the "debt thermoshere" by 2011.

Mon, 11/01/2010 - 16:07 | 691502 Assetman
Assetman's picture

You're right... which likely means that the debt ceiling will likely be increased (significantly)... and passed... before the holiday recess THIS year...

That, of course, would be a fitting "parting gift" from those same congressmen who just couldn't keep their grubby little fingers out of the cookie jar.

Mon, 11/01/2010 - 16:12 | 691509 chet
chet's picture

Maybe, but why would the Dems hand that gift to the GOP, while making themselves look bad in the process?  From the Dem standpoint, it seems better to wait and watch the GOP squirm in March...

Mon, 11/01/2010 - 16:35 | 691557 Turd Ferguson
Turd Ferguson's picture

Chet, you are absolutely correct. The debt ceiling will be raised by the Republican Congress.

Any representative that says he will not support the raise is lying. Maybe, the raise will only pass 220-215 but it will pass, just like f-ing health care.

Mon, 11/01/2010 - 16:41 | 691587 Assetman
Assetman's picture

Well... if you want to make it into a GOP vs. Dem issue (which it really isn't), the GOP can actually gain points on gaining passage of a higher debt ceiling -- with serious strings attached on spending limits.  This would put Obama's 2011 budget -- if he even puts on out-- as a "dead on arrival" item.

There is likely to be HUGE turnover of elected officials in BOTH parties, however-- and the realization that voters see both parties as the same corrupt group will likely start sinking in.  If I were a party leader (in either party), I'd rather have my exiting group of goons take the hit on an unpopular vote than to bring it up next year, when something actually worse could happen if no action is taken.

You may be right, though-- and it may well be the strategy the Dems adopt-- but they already look butt-ugly bad.  I don't think for a minute most voters will look at the Dems as a bastion of fiscal sanity-- even if they manage to paint the GOP in a proverbial corner.

Mon, 11/01/2010 - 16:51 | 691605 chet
chet's picture

I agree with your broad points.  I just think that Congress has reached the point where either party will do whatever they can to screw the other, even for the most petty and fleeting political gain.

I truly have given up on Congress.  In it's current incarnation, it is utterly incapable of solving the country's problems.  I believe it is more plausible that the entire republic will come down in smoking rubble, than it is that Congress will pass meaningful fixes to entitlements or the military.

Mon, 11/01/2010 - 16:55 | 691612 Joe Davola
Joe Davola's picture

The playbook already includes this scenario:


As I commented in an earlier thread, there is a reason for the continuing resolutions:


Never let a crisis...

Mon, 11/01/2010 - 17:27 | 691682 Assetman
Assetman's picture

Thanks for the link... I remember the "good ol' days" when a significant chunk of the Federal Government was shut down.  Boy, did Newt Gingrich mess up on that one.

Given how Fed government salaries have outpaced the private sector over the past several years, I wonder if the such as stand-off would result in the same outcome?  Problem is, the "essential" non-discretionary programs take up almost all the pie now...

Mon, 11/01/2010 - 21:09 | 692089 Joe Davola
Joe Davola's picture

Good point on the salary ratio to J6P - it might not play as well now, particularly given how inept 1600 PA is these days.

Mon, 11/01/2010 - 16:21 | 691528 DoChenRollingBearing
DoChenRollingBearing's picture

@SpeakerFTD.  This will show us if the Rs, even new Tea Party ones, are worth anything.

My own view is the Rs are a little better than the Ds.  Different enough?  We will soon see.

Worth a damn, yes indeed, we will soon see.

Mon, 11/01/2010 - 16:53 | 691609 merehuman
merehuman's picture

Tha ball players may be exchanged, owners stay the same. Owners rule.

Hello Rothchild, Bildeburg etc. Fucking elitists rule, not the dems or pugs!

Whatever is good for banks will happen.

Unless some of you think of a sudden our politicos will turn over a new leaf?

Haha. hahahha! We may all long to be in Peru soon. Lol . Its NOT funny, but the other choice was tears.

Mon, 11/01/2010 - 17:00 | 691627 Shameful
Shameful's picture

Sadly yes, just another management team.

One way to put it into perspective is all of us are descended from migrants. Might be thousands of years back but people move, mainly to try to get a better life or escape problems. So that too will remain the same. The more things change the more they stay the same. Truly nothing new under the sun.

Mon, 11/01/2010 - 18:05 | 691763 DaveyJones
DaveyJones's picture

they stay the same but sometimes the problems are more "compounded" than others

Mon, 11/01/2010 - 17:45 | 691726 DoChenRollingBearing
DoChenRollingBearing's picture

Vamos pues...

Mon, 11/01/2010 - 16:58 | 691620 Joe Davola
Joe Davola's picture

As usual the R's (D's) who are in tight districts will be given the freedom to vote against (for).

Mon, 11/01/2010 - 15:54 | 691450 Ivanovich
Ivanovich's picture

Will be an interesting test for all those new "conservative" republicans.  See if they live up to their word.

Mon, 11/01/2010 - 16:35 | 691562 Turd Ferguson
Turd Ferguson's picture

not a chance

Mon, 11/01/2010 - 16:57 | 691616 centerline
centerline's picture

Can't. This puppy is on autopilot now.  The self-destruct button is about all that remains.

Mon, 11/01/2010 - 15:55 | 691453 Cleanclog
Cleanclog's picture

GOP won't NOT raise the debt ceiling but wait for the most incredible excuses and finger pointing "they did its".  Unless the GOP doesn't actually capture the House tomorrow.  Then watch the Dems go crazy in avoidance of owning that decision without accepting fault for the past 10 years, not just past 2 years, or economic incompetence in fiscal action (I really hesitate to call it policy).


Mon, 11/01/2010 - 15:55 | 691455 Something Wicke...
Something Wicked This Way Comes's picture

Not suprised by gov't check kiting and counterfeit black ops. I just want me Timmy to put on the gloves. Never met a tax cheating weasel I couldn't whip.

Mon, 11/01/2010 - 16:01 | 691479 SteveNYC
SteveNYC's picture

Geithner's head as a speed-bag......I'd buy that for a dollar!

Mon, 11/01/2010 - 16:55 | 691613 xenophobe51
xenophobe51's picture

Better act fast at that price. Inflation is a bitch.

Mon, 11/01/2010 - 15:56 | 691456 Tortfeasor
Tortfeasor's picture

Not going to see this reported today.  The only finance stories allowed are b.s. predictions on when broke companies plan on paying back their government loans (see, e.g. AIG and GM)

Pre-election stories MUST reflect well on incumbents.  

Mon, 11/01/2010 - 15:56 | 691458 Azannoth
Azannoth's picture

I see a Revolution by March 2011

Mon, 11/01/2010 - 15:59 | 691464 Ragnarok
Ragnarok's picture


Mon, 11/01/2010 - 16:36 | 691568 Turd Ferguson
Turd Ferguson's picture

probably not but the election of 2012 is going to be far more interesting than this one

Mon, 11/01/2010 - 17:48 | 691734 DoChenRollingBearing
DoChenRollingBearing's picture


2012 could be the most interesting election ever (though two years may change that).

Gridlock from now until then will be interesting as well.

Mon, 11/01/2010 - 18:12 | 691774 tmosley
tmosley's picture

I'm looking for the emergence of a major third party in 2012.  I'm thinking it will either be the Libertarian party, or the Tea Party will form a formal third party.

The only way it can be avoided is if the Republicans step up to the plate and do the right thing.  The public won't give the Democrats another chance, and the Republicans are damn lucky to get this one, but they are likely to squander it.  If they do manage to do the right thing, then they have a chance at forming a Right-libertarian coalition that will keep them in power for decades, so long as they don't fall back into the stupid partisan crap, abortion hate, Jesus based thuggery, and warmongering.  I'd give this a less than 1% chance of happening.  The Rep. leadership can't see the bullet headed for their forehead.

Mon, 11/01/2010 - 19:23 | 691888 Mitchman
Mitchman's picture

+1000!  Hear, Hear!

Mon, 11/01/2010 - 15:56 | 691459 Sudden Debt
Sudden Debt's picture


Mon, 11/01/2010 - 16:02 | 691482 ZeroPower
ZeroPower's picture


Mon, 11/01/2010 - 16:08 | 691483 plocequ1
plocequ1's picture

YEA BABY, BRING ON MR DEATH!! Ill kick his ass

Tue, 11/02/2010 - 01:05 | 692499 Best Satan in Town
Best Satan in Town's picture

Just watched that TZ episode in, of all places, my American Literature course.

Mon, 11/01/2010 - 17:51 | 691740 Rainman
Rainman's picture

This ain't workin'. That's the way you do it. Money for nuthin' and your chicks for free.....!!

Mon, 11/01/2010 - 15:58 | 691461 johngaltfla
johngaltfla's picture

Thankfully, Ben is a buyer of crap. And creator. And shoveler. And stepping in it. And sharing it. And socializing it. And reeking of it. And dropping it from helicopters. And......

Mon, 11/01/2010 - 16:19 | 691524 Waterfallsparkles
Waterfallsparkles's picture

Yep, the FED is a shit shoveler.  They keep shoveling shit on their balance sheet trying to pump the market so the shit smells better and just maybe someone will buy it.

Mon, 11/01/2010 - 17:52 | 691741 Calculated_Risk
Calculated_Risk's picture

He is the alpha and the omega...

god's work after all!

Mon, 11/01/2010 - 15:58 | 691462 hugolp
hugolp's picture

And this is the real reason QE2 will happen, no matter where it sends the prices of food and raw materials.

Mon, 11/01/2010 - 16:33 | 691551 SheepDog-One
SheepDog-One's picture

What do you mean 'QE2 will therefore happen'? How so? $100 billion per month for bonds? $1 Trillion all at once? $4 trillion? What IS QE2?

Mon, 11/01/2010 - 16:39 | 691579 Turd Ferguson
Turd Ferguson's picture

I'm pretty sure it will be $100B/mo for 12 months.

What HellyBenny doesn't realize (but maybe he does) is that once you start, you can't stop. No way we get to Nov 2011 and the Fed just stops. They will be forced to continue. The market won't allow them to stop without total disruption.

Mon, 11/01/2010 - 16:48 | 691599 Shameful
Shameful's picture

While I think Zimbabwe Ben knows, just he either does not care or feel it's the lesser of two evils But you are right once he starts he cannot stop without a brutal selloff, since his presence will be "priced in".

To me the real question is how long will the market play ball? Sooner or later producers are going to want a lot more dollars for their commodities, products, or services. Then the real commodity is it seems that the stock indexs of a hyper inflating country never keeps up with the loss in the currency.

Mon, 11/01/2010 - 16:01 | 691465 tahoebumsmith
tahoebumsmith's picture

Living on a credit card..Pretty sad. Just keep raising the limit in hope of some miraculous turn of events. I don't even know why we are bothering to have an election tommorow, the only thing that matters now is what the FED does. Congress, Senate, President...doesn't make one bit of difference anymore. The only thing that matters is how much the FED will print this time.

Mon, 11/01/2010 - 16:03 | 691486 Sean7k
Sean7k's picture

If the banks keep raising the governments's limit and we have to pay the government's credit debt, why won't they raise my limit? Heck, the government can't pay the interest much less the capital at this point...

Mon, 11/01/2010 - 15:59 | 691467 Shameful
Shameful's picture

Of course the ceiling will be raised. Even if by some miracle it's not what is going to happen, is the gov really going to stop spending? I expect some claptrap about "Support the troops" "Think of the children" or other old favorites.

Mon, 11/01/2010 - 16:01 | 691475 RobotTrader
RobotTrader's picture

QE2, 3, 4, 5, 6, 7, etc.

Will be required to keep the Ponzi going.

Mon, 11/01/2010 - 16:02 | 691484 John McCloy
John McCloy's picture

Yup. Until something politically or judicially proves that their is justice in store for the criminals of our wealth.

Mon, 11/01/2010 - 16:40 | 691583 Turd Ferguson
Turd Ferguson's picture

Once QE starts, and Wednesday isn't the beginnning, its a contiunuation, the market will never allow it to be stopped.

Mon, 11/01/2010 - 16:06 | 691497 Spalding_Smailes
Spalding_Smailes's picture

+ 8 suppressed renminbi

Mon, 11/01/2010 - 16:34 | 691554 SheepDog-One
SheepDog-One's picture

Go ahead do QE2 and blow the ship out of the water. Im dying to see it!

Mon, 11/01/2010 - 19:02 | 691850 rocker
rocker's picture

What will we float on.

Mon, 11/01/2010 - 16:01 | 691477 Paul Bogdanich
Paul Bogdanich's picture

When the system cracks is all about velocity.  We seem to be pretty good a shrugging off one event at a time but if they start coming too fast and furious it may be too much.  As to the politics.  Whether any of these Tea Party representatives can do arithmetic is questionable.  it's clear that the people that elected them can not.  If they fail to raise the celing the borrowing is halted.  If borrowing is halted so are medicare, social security and defense and there is no way to restart them without borrowing.  Just those items alone are more than tax receipts and these bozos are going to do tax cuts first thing.  Let's see the Tea party's reaction to that revelation.   

Mon, 11/01/2010 - 16:25 | 691532 Assetman
Assetman's picture

The Tea Party is irrelevant to the conversation.  The arithmetic began well before anyone outside of the D and R parties started this mess-- and it will take a massive restructuring to turn the tide. 

The Tea Party is still essentially not a real "party" in a true sense and will have very limited influence, anyway.  What carries more influence will be the underlying message sent from voters (buh-bye, incumbents), and what needs to be done from a spending standpoint.

My guess is that the ceiling will be raised by the exiting Congess... those leaving have little left to lose, and those still there have 2 years to get their act together.  If not done in December, it will need to be done anyway.  I think even the Tea Party reps will be able to figure out the math soon enough.

Mon, 11/01/2010 - 16:40 | 691552 centerline
centerline's picture

comment removed for further thought by author!  got to check my math here.

Mon, 11/01/2010 - 16:35 | 691561 SheepDog-One
SheepDog-One's picture

Oh, and the present monetizers math skills you deem acceptable?

Mon, 11/01/2010 - 16:38 | 691575 Canucklehead
Canucklehead's picture

The Tea Party's reaction will be obvious.  In politics, there is give and take.  Expect the unravellng of Obama's legacy as he personally negotiates the debt limit increases by selling his monopoly hotels et al to buy "Boardwalk".  He can kiss goodbye many "properties" he collected when he started the game of monopoly.

Where do the cherished Obama programs resourcing commitments stand going forward?  On shaky ground.

Mon, 11/01/2010 - 16:02 | 691481 Cyan Lite
Cyan Lite's picture

Does the Debt Ceiling take into account the amount that the Fed monetizes?

Mon, 11/01/2010 - 16:07 | 691499 Sudden Debt
Sudden Debt's picture

no, whatever they monetize is subtrackted from the debt.

But by doing so, the dollar gets weaker. So there is a limit in doing so.

It's called "The last resort" and that's not a hotel or a spa ;)

Mon, 11/01/2010 - 16:03 | 691488 DB Cooper
DB Cooper's picture

Why would I care when the Treasury is forced to default when the Fed owns all the Treasuries.  Can't see that happening as they will keep this ponzi going for longer than I can last, but it would be a just end to the Fed.

Mon, 11/01/2010 - 16:05 | 691492 centerline
centerline's picture

Bond bubble turns into bond bomb thanks to the QE feedback loop.  Feels like the gas pedal is stuck to the floor.

Mon, 11/01/2010 - 16:09 | 691503 Cyan Lite
Cyan Lite's picture

Mainstream Media will NOT report on this.  It's gonna be fun to see how all these Republicons here respond when a Republican Congress raises the debt ceiling.

Mon, 11/01/2010 - 16:36 | 691569 SheepDog-One
SheepDog-One's picture

Perhaps they simply dont raise it. Someone at some point has to say 'NO MAS'!

Mon, 11/01/2010 - 16:41 | 691585 Turd Ferguson
Turd Ferguson's picture

don't count on it

Mon, 11/01/2010 - 16:41 | 691586 DoChenRollingBearing
DoChenRollingBearing's picture

No mas!

Mon, 11/01/2010 - 16:15 | 691511 Waterfallsparkles
Waterfallsparkles's picture

Bam Zoom To The Moon Alice.

Mon, 11/01/2010 - 16:17 | 691518 Yophat
Yophat's picture

....meanwhile in the real world!

INDIANAPOLIS -- Armed security guards will be on hand at 36 unemployment offices around Indiana in what state officials said is a step to improve safety and make branch security more consistent.

No specific incidents prompted the action, Department of Workforce Development spokesman Marc Lotter told 6News' Norman Cox.

Lotter said the agency is merely being cautious with the approach of an early-December deadline when thousands of Indiana residents could see their unemployment benefits end after exhausting the maximum 99 weeks provided through multiple federal extension periods.

"Given the upcoming expiration of the federal extensions and the increased stress on some of the unemployed, we thought added security would provide an extra level of protection for our employees and clients," he said.

Some offices have had guards for nearly two years but those guards were hired on a regional basis, meaning some offices had armed guards while others did not, Lotter said.

The cost of the armed guards varies dramatically around the state. Lotter said the agency is trying to be more consistent and that it plans to employ armed guards in all 36 offices where unemployment insurance benefits are handled.

The overall cost for the security is $1 million, paid for with federal funds designated for administration of the unemployment system, Lotter said.

Other agency offices that provide job training or are not full-service branches will continue to have unarmed guards.

Lotter said state employees in the affected offices have also recently gone through stress-management training in which they learn how to respond appropriately to angry clients.

Mon, 11/01/2010 - 16:18 | 691520 Gimp
Gimp's picture

They won't stop till gas is $5 a gallon and the economy collapse for real.


Mon, 11/01/2010 - 16:42 | 691589 Turd Ferguson
Turd Ferguson's picture

And at that point, they won't be able to stop.

Mon, 11/01/2010 - 18:29 | 691797 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Madness.  Madness.  Madness.

Mon, 11/01/2010 - 16:28 | 691538 taraxias
taraxias's picture

It's all up to our creditors now, not the FED. If they continue to accept the debasement of the USD the ponzi continues. If they don't, the game stops right there and then.

Hyperinflation will be an external event.

Mon, 11/01/2010 - 16:38 | 691574 SheepDog-One
SheepDog-One's picture

Yep my friend I think thats the nail on the head...only question is when THEY say no more of this shit we want our money back! Could be months away, could be tomorrow, we shall see.

Mon, 11/01/2010 - 16:42 | 691590 Turd Ferguson
Turd Ferguson's picture

When they say "no more" it will only accelerate the process.

Mon, 11/01/2010 - 18:39 | 691817 Bill Lumbergh
Bill Lumbergh's picture

You mean we cannot just print the money to fund our needs...someone tell Ben because I am beginning to think he believes his own nonsense.

Mon, 11/01/2010 - 20:29 | 692011 Calmyourself
Calmyourself's picture

I may be way behind here, but educate me please.  How does Hyperinflation begin as an exogenous event? If the Chinese/creditors overall do what, repudiate the money we owe them?  I may be missing something very big here so please expand on this.

Mon, 11/01/2010 - 16:33 | 691550 JuicyTheAnimal
JuicyTheAnimal's picture

I could be wrong but maybe this is a good plan.  Raise the debt ceiling, borrow a couple more trillion then take it to the casino and bet it all on red or black or whatever.  Then double down a few times.  Just need a little lucky streak.  Only way I can see 'em getting out of debt ever.  Timmy, just ask for the ultra super duper high stakes room when you get there. 

Mon, 11/01/2010 - 17:22 | 691667 AbandonShip
AbandonShip's picture

Who junked him? He's on to something.  This is well documented thinking...

"Shareholders of financially distressed firms may have incentives to invest in riskincreasing

negative-NPV projects, as they reap the benefits if things go well "

See also "Agency Problem"

Mon, 11/01/2010 - 16:35 | 691560 Something Wicke...
Something Wicked This Way Comes's picture

Remember this bullshit?

Monetize? Ya know I had this kid I caught counterfeiting once. Claimed he was monetizing his debt. Oh in that case, sorry to bother ya kid. His name was Benny.


Mon, 11/01/2010 - 16:36 | 691565 Steve Zissou
Steve Zissou's picture

Oh...I know the answer to this one.  Print 600 trillion.  Pay everyone.  We should be fine.

Mon, 11/01/2010 - 16:37 | 691573 Racer
Racer's picture

Why on earth is the debt ceiling still called a 'debt ceiling'?

'Debt target to beat urgently' more like!

Mon, 11/01/2010 - 16:38 | 691577 SheepDog-One
SheepDog-One's picture

'Debt highly flexible membrane'?

Mon, 11/01/2010 - 16:43 | 691591 Turd Ferguson
Turd Ferguson's picture

"Debt Ceiling" is just another bullshit, political trick designed to mollify the masses.

Mon, 11/01/2010 - 18:42 | 691820 Rainman
Rainman's picture

+ 1. The implication is that Jack's beanstalk cannot possibly grow big enough to rip through the ceiling.  

Mon, 11/01/2010 - 17:50 | 691736 The Disappointed
The Disappointed's picture

or 'Debt Fig Leaf', But fig leaves don't get that big, do they?

Mon, 11/01/2010 - 19:07 | 691856 lizzy36
lizzy36's picture

You are really on to something here.

We need to rebrand the whole scenerio.

We need to take a sell side anaylsts view of the debt ceiling: rebrand it a "Debt Target" upgrade it to a conviction buy and keep revising the target upwards.

Jesus, why didn't Geithner think of this.

Tue, 11/02/2010 - 00:15 | 692430 poor fella
poor fella's picture

Haaaaaaa! I'd actually fill my 401k up with that - Oh, wait, we all are already



Mon, 11/01/2010 - 16:40 | 691582 3ringmike
3ringmike's picture

quadrillion. come on just say it! kinda rolls off the tongue doesn't it?

Mon, 11/01/2010 - 16:41 | 691588 Printfaster
Printfaster's picture

I have a slightly different view than everyone else.

What the Fed is doing by buying up all the treasuries is competing with the public and retirees for yield.  The Fed is stealing the yield away from grandma in treasuries and debt and trying to starve away grandma by cutting her annuities.

This is better than cutting grandma's social security.  We must make sure that all the mandarins in the overpriced Fed offices are well remunerated.  The Fed is an organization of abject waste.  The culture of waste in the Fed was made crystal clear when the SFFED HR manager got on the airphone to listen to her voicemails.  In all my time on airplanes, I never saw anyone else pay $5 a minute to listen to voicemail which could wait the two hours until touchdown.



Mon, 11/01/2010 - 17:02 | 691629 buzzsaw99
buzzsaw99's picture

imo they are capping interest expenses on the national debt at $450B +-


They don't give a crap about grandma.


As the debt goes higher rates must come down or interest payments will devour the budget. As others have said, once started along this road there is no turning back.

Mon, 11/01/2010 - 18:00 | 691757 Calculated_Risk
Calculated_Risk's picture

Also, if interest rates rise, banks will be paying out more on interest bearing accounts, and since banks are already insolvent... I hear a cracking sound...

Mon, 11/01/2010 - 18:53 | 691839 centerline
centerline's picture

As rates rise, people will take the next necessary steps to avoid default on variable rate instruments like HELOCs - which is deflationary as well.


Rock and a hard place.

Mon, 11/01/2010 - 16:52 | 691602 Waterfallsparkles
Waterfallsparkles's picture

Does make you wonder if there are enough tax revenues to support it.  How many generations of tax revenues will it take to pay this off now 4 generations to pay this off or 5?

Mon, 11/01/2010 - 16:56 | 691611 waterdog
waterdog's picture

We knew in May 2009 that the amount of the debt would reach $ 21 trillion before it was all over. Geithner told Congress in Sept. 2009 that he would blow through $ 12 trillion by March 2010 and to raise the ceiling to $ 16 trillion immediately- but no one had the guts to do it. So, they are going to do it piece meal. Just like the FDIC knows that there are another 1100 banks to go down, but, they are going to report them 10 at a time for the next 100 months, because what 90% of the population does not know will not hurt them.


Mon, 11/01/2010 - 18:50 | 691834 lizzy36
lizzy36's picture

Well there is about 9.5 years of shadow and foreclosed housing inventory (pre fraudclosuregate). 

So, the depression should continue throught the next 4 cycles of QE or about the next 10 years.

Mon, 11/01/2010 - 16:59 | 691624 zarjad
zarjad's picture

Election question: why do we need CBO if there is no CB?

Mon, 11/01/2010 - 17:20 | 691655 AbandonShip
AbandonShip's picture


Mon, 11/01/2010 - 17:20 | 691657 sbenard
sbenard's picture

Talk about the ultimate in creepy:

I just learned that the Fed has announced a conference this weekend at JEKYLL ISLAND. The subject of the Fed is the PAST and FUTURE of the Fed!


They should have announced it on Halloween for the ultimate horror story! I certainly would have been appropriate!

Mon, 11/01/2010 - 17:22 | 691666 Shameful
Shameful's picture

Do you have a link? That sounds like a hoot, wonder if the public can crash this party :)

Mon, 11/01/2010 - 17:24 | 691671 AbandonShip
Mon, 11/01/2010 - 17:38 | 691713 gs_runsthiscountry
gs_runsthiscountry's picture

Meanwhile, what is fair value? 1/2? The headwinds at the banks continue.

Fox news Chris Whalen:

Mon, 11/01/2010 - 18:13 | 691717 buzzsaw99
buzzsaw99's picture

2007 ABK Top talent:


Robert J Genader

Total Compensation
$9.88 mil (#144)

5-Year Compensation Total
$21.903 mil

Robert J Genader has been CEO of Ambac Financial Group (ABK) for 2 years. Mr. Genader has been with the company for 21 years .


In other faux snews:


The former CEO of Enron is asking a federal appeals court to grant him a new trial based on the fact that high level fraud is no longer considered a crime...

Mon, 11/01/2010 - 18:19 | 691783 Mr Lennon Hendrix
Mr Lennon Hendrix's picture
Broken Bells - The Ghost Inside (Live at The Boat):

Mon, 11/01/2010 - 18:32 | 691801 SilverIsKing
SilverIsKing's picture

The Rs coming in will have a unique opportunity to tell the truth about what's happening and not have it reflect upon them.  If I were them, knowing it's all going to collapse one way or the other, I would be up front and offer up our two options.

1. QE to infinity which will result in hyperinflation or...

2. Tightening and austerity which will bring about depression + economic collapse?

Those are the choices and I would make it clear from day one that that's what I walked into and was handed a very short menu.

What many posters here expect them to do is fall in line with the PTB, and perhaps they will, but it's a bad strategy at this point and they should know it by now.  Do they want to be viewed as a cause of the problem or someone who identified it and communicated it to the masses and tried to help in some way.

I think we are too close to the end for some of the Rs not to try to do the right thing.

Mon, 11/01/2010 - 18:40 | 691816 CitizenPete
CitizenPete's picture

Must watch!  CNBC argues Keynesian methodology.




CNBC whines about ad showing China as the master of the US.  "now they work for us". 

Mon, 11/01/2010 - 19:11 | 691861 StarvingLion
StarvingLion's picture

My Tribute to Bankster_Bug:

Take your PRIVATE Federal Reserve Notes (FRN) to any Federal Reserve bank and ask for PUBLIC United States Notes (USN) (see below: "shall be redeemed in lawful money on demand")  which are still valid currency.

"Whereas issuance of United States Notes ended in January 1971, existing United States Notes are still valid currency in the United States, though extremely rarely seen in circulation, given that paper money currently consists almost exclusively of Federal Reserve Notes."

"Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank. "


Mon, 11/01/2010 - 22:31 | 692246 CitizenPete
CitizenPete's picture

... or ask for one dollar coins.  Coins are the only US sovereign money still created by the U.S. Mint.  They are not created by Congress appropriated means, but by supply/demand.  You can go long on USDs and short FRNs via the U.S. Mint web site (free shipping) or at a Federal Reserve System Bank.  


Note that the FED pays FULL FACE VALUE for all U.S. Mint coins and any profits go back into the Treasury general fund to pay down the debt.  


Dollar coin .06 material cost + .06 manufacturing overhead = $.12 or .88 gross profit (seignorage) from the FED or by exchanging FRNs for USDs. 

The U.S. Mint creates and sells coins under authorization of  the Public Enterprise Fund (PEF), Public Law 104-52 (codified 31 U.S.C. § 5136). (US Code - Cornell)


Mon, 11/01/2010 - 22:07 | 692202 Captain Courageous
Captain Courageous's picture


you STOOPID mtherphuckers!

Mon, 11/01/2010 - 23:05 | 692324 Grand Supercycle
Tue, 11/02/2010 - 07:49 | 692686 overmedicatedun...
overmedicatedundersexed's picture

More of the same will not do.

Wall st ,the Fed and the free trade lobby ,are very big targets  if the new congress has the balls.

 Much wealth can be clawed back from the those elites..with only positives for the American people.

One Honest Fed judge and prosecutor with some in the new congress could start the ball rolling.

It's a long shot but better than the alternatives of continued FED treachery.

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