Treasury Cuts Its Borrowing Need Estimate By Half, To Suspend State, Local Gov't Funding Due To Upcoming Debt Ceiling Breach

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Mon, 05/02/2011 - 15:34 | 1231182 carbonmutant
carbonmutant's picture

Paging Meredith Whitney...

Mon, 05/02/2011 - 15:47 | 1231213 hedgeless_horseman
hedgeless_horseman's picture

...it will deprive state and local governments of an important tool to manage their outstanding debt expenses.

Congress needs to subpoena the traitor that wrote this, too!

Mon, 05/02/2011 - 16:10 | 1231360 Bastiat
Bastiat's picture

Why?  SLGS are custom issued securites to allow advance refunding of muni bonds. The municipality sells new bonds to get cash which it pays the US Trasury cash for these securities (SLGS).  The SLGS are then used to fund an escrow to make the payments on the refunded (defeased) bonds including the principal and premium, if any, at the first call date.  The statement you object to is true and fair.

Such refundings take place in the vast majority of cases in a falling rate environment in order to get existing higher yeilding bonds off the books, replacing it with lower yielding, new bonds.   Same idea as refunding your mortgage but without the ability to call in the mortgage until a certain date.

Not many of these are going on these days as rate are flat and the escrows are inefficient -- ie. the yield on the SLGS or, alternatively market UST paper, are much lower than the interest rates on any new issued refunding bonds.

 

Mon, 05/02/2011 - 15:51 | 1231273 SilverRhino
SilverRhino's picture

Yet another building block in the manipulation of PM's ... in 6 months this week will be looked at like a giant speed bump on the way up.

 

Mon, 05/02/2011 - 17:24 | 1231730 km4
km4's picture

Geithner wants to protect America’s creditworthiness ;)

 

Mon, 05/02/2011 - 20:30 | 1232355 bankonzhongguo
bankonzhongguo's picture

Its really just goes to show the absolute contempt the federal government has for the States and that they will do whatever they can to usurp State's rights and power.

Let the Feds abandon the States. 

We will be better off without those debt issuing free lunch whores.

Mon, 05/02/2011 - 15:34 | 1231186 Misean
Misean's picture

I think Timmah! is confuzzled...

Mon, 05/02/2011 - 16:19 | 1231393 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Timmah!"  Timmah quipped with a smile on his face as he played his 8 bit PPT video game on his Nintendo.  "Timmah, Timmah, Timmah!"

He was enjoying his morning Jolt soda as he took the market for a ride.  He was pleased to sell all the miners he had accumulated during the Fall of '08.  He wanted to show all those gold bugs who was boss.

"Timmah, bitchez!"  He drooled as he slurped his Jolt from a beer helmet.  Just then BS Bernanke walked into the room.

"Good work this morning Timmah.  We are going to use the proceeds from SLW to buy AMZN.  Got it?"

"Timmah!"

"And make sure to cut funding to everything except US."  BS licked his chops.  "Next we will cut spending to SS and then once the dollar hits DXY 66 we will steal the pensions."  He made a weird face as he began to talk to himself.  "Oh, you are going to move out of the dollar?  But who will protect the world from the bad guys?  Who will fight al qaeda?"  He laughed to himself and pulled a cigar out of his coat pocket.  "I will be in my den.  Daddy has some dollars to print."

Timmah didn't hear him.  He was busy pulling buy bids and selling the moves.  Bernanke walked into his den and closed the door.

Mon, 05/02/2011 - 15:39 | 1231195 1100-TACTICAL-12
1100-TACTICAL-12's picture

Smoke & mirrors, shell game. But sufficient to not startle the sleeping sheep..

Mon, 05/02/2011 - 15:46 | 1231197 NOTW777
NOTW777's picture

good grief - the jp morgan guy just said on national tv that bin ladens death with give americans new confidence in their government and in particular - to fix the economy

Mon, 05/02/2011 - 15:54 | 1231282 NOTW777
NOTW777's picture

surreal - sorry, but they look like bused in actors

who would cheer like that?

Mon, 05/02/2011 - 16:10 | 1231349 NOTW777
NOTW777's picture

obama and holder would like to remind everyone there is no "war on terror" and no "war" in libya

Mon, 05/02/2011 - 17:54 | 1231844 Bicycle Repairman
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This is why Obama's speech was delayed.  The buses hadn't arrived on time.

Mon, 05/02/2011 - 16:27 | 1231427 angmikey
angmikey's picture

No need to worry about the people hearing that, they are sleeping well now that the mastermind of all things evil has been terminated. As a plus, JPM can continue doing what it does best.....hey where is my wallet!

Mon, 05/02/2011 - 15:42 | 1231202 TruthInSunshine
TruthInSunshine's picture

Good.

Shut it down.

Lay millions off.

I am serious.

It's the best thing for the Republic in the long term. It will remind people that government doesn't produce much of value, and certainly what it does produce is done at an incredibly inefficient rate and cost, and that more often than not, government gets in the way of and impedes the market and the choices and freedoms of average Americans, while it picks their pockets to fund the kleptocracy of Crony Capitalism.

And if we're really serious about returning to liberty and opportunity based on merit, send that SEAL team in to the lair of The Bernank to neuralize forever the threat that is the Federal Reserve Bank.

Mon, 05/02/2011 - 16:34 | 1231473 nmewn
nmewn's picture

Exactamundo!

"Therefore, on May 16, I will (1) declare a “debt issuance suspension period” under the statute governing the Civil Service Retirement and Disability Fund, permitting us to redeem existing Treasury securities held by that fund as investments, and to suspend issuance of new Treasury securities to that fund as investments and (2) suspend the daily reinvestment of Treasury securities held as investments by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift Savings Plan.  >>>(Under the law, Federal employees are protected by a requirement that both funds be >>>made whole<<< after a debt limit increase is enacted.)<<<

OMG!!!...not the dreaded "debt issuance suspension period"!!!

Hey honey come here, just look at this pile of bills...we're going to have stop using those damn credit cards, a kind of "debt issuance suspension period"...ROTFL!

Mon, 05/02/2011 - 15:41 | 1231206 Duuude
Duuude's picture

 

Paging Chuck Jones...

Paging Chuck Jones...

We have a call for you from Rod...

 

Mon, 05/02/2011 - 15:40 | 1231208 Cleanclog
Cleanclog's picture

  In order to honor those obligations, increasing the debt limit is unavoidable.  

But not honoring those obligations is actually what some people want.  Then what Timmy?

Mon, 05/02/2011 - 15:42 | 1231209 medicalstudent
medicalstudent's picture

less than they expected... to borrow.

 

you know, as in interest payments are now not part of the debt..

 

did they update all those accounting textbooks yet.

Mon, 05/02/2011 - 15:54 | 1231285 Cleanclog
Cleanclog's picture

Good point!  They will need to make interest payments or they will actually default - so just not paying bills to employees and vendors is what they'll do first.  Do not provide services or goods to the US of A until debt ceiling raised. Federal employees can take a page from California state employees.

Mon, 05/02/2011 - 15:43 | 1231211 Blagio
Blagio's picture

It's called living paycheck to paycheck. Deal with it Timmay!

Mon, 05/02/2011 - 15:53 | 1231268 Dr. Richard Head
Dr. Richard Head's picture

True, but instead of stalling on the elctric bill so the gas gets paid during the winter, Timmay wants to rob Peter to pay Lloyd.  Cock gobblers.

Mon, 05/02/2011 - 15:41 | 1231216 trav7777
trav7777's picture

where are the silver pimps today?  PMs getting crushed. 

Mon, 05/02/2011 - 15:45 | 1231223 hedgeless_horseman
hedgeless_horseman's picture

Buying low to sell high?

Mon, 05/02/2011 - 15:51 | 1231255 penisouraus erecti
penisouraus erecti's picture

++

Nice opportunity again as it dips below 44 just before the close

Mon, 05/02/2011 - 16:45 | 1231470 Pegasus Muse
Pegasus Muse's picture

Trav and other PM-bashing irritants only show up on down days.   Boringly predictable.

As TF pointed out so well the other day:

"I wish to remind you again that none of the fundamentals have changed. In fact, they've only moved further in our favor.

Has the U.S. government discovered spending restraint and is moving toward a balanced budget?

Are California, Illinois, New York, Michigan and about 30 other states suddenly solvent and prosperous?

Did the TBTF banks suddenly become solvent, their CDOs and loan portfolios truly valued at par?

Has the Comex opened a hidden vault containing 1,000,000,000 ounces of physical silver, tested and ready for immediate delivery?

Have peace, love and harmony suddenly broken out all over the MENA region as well as the entire world?

If you answered NO to any (all) of these questions, why do you care what the fiat prices of silver and gold are this morning? The prices may not recover to new highs today or even this week but recover they will. Sit back, relax, gaze at your physical holdings and smile."

http://tfmetalsreport.blogspot.com/2011/05/was-it-really-just-week-ago-20.html 

I bought more ounces of Ag this morning on the Bankster orchestrated slam-down.  Thanks JPM.  Thanks Blythe.  Thanks Jaime. Appreciate the discount.

Physical Silver.  No paper for me.  

 

Mon, 05/02/2011 - 15:46 | 1231247 LawsofPhysics
LawsofPhysics's picture

Gold is still at 1556 and silver is at 45.  Oh wait, that is right this is the up is down, down is up bad is good mantra.  Got it.  Just glad I got out of PMs (except physical) in November.

Mon, 05/02/2011 - 16:00 | 1231317 slow_roast
slow_roast's picture

Yeah, because you clearly sold at the top right? 

Mon, 05/02/2011 - 16:13 | 1231366 TruthInSunshine
TruthInSunshine's picture

Gold and silver have already recovered most of last night's raid.

Nice.

Very bullish. Hugely so.

Mon, 05/02/2011 - 16:01 | 1231324 tmosley
tmosley's picture

Where are the oil pimps?

Oh yeah, where they normally are, being butthurt.

Mon, 05/02/2011 - 16:25 | 1231422 CH1
CH1's picture

Puh-leeze... I'm holding till the bag boy at Wal-Mart recommends a mining stock.

Tue, 05/03/2011 - 02:15 | 1233031 StychoKiller
StychoKiller's picture

Until I see silver dimes and other coins in my change, I see no reason to bail out!

Mon, 05/02/2011 - 16:29 | 1231441 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Staring at my coins. 

Mon, 05/02/2011 - 15:49 | 1231217 Mercury
Mercury's picture

I want to emphasize that, contrary to a common misperception, the debt limit has never served as a constraint on future spending, nor would refusing to increase the debt limit reduce the obligations the country has already incurred.

In other words it's just another silly stage prop (as this letter is) in the never-ending story of self-aggrandizing government expansion.

Mon, 05/02/2011 - 15:42 | 1231222 lolmao500
lolmao500's picture

Crash it all !

Mon, 05/02/2011 - 15:43 | 1231225 LawsofPhysics
LawsofPhysics's picture

Awesome.  Fuck the states who can not get their fiscal house in order.  I love it.

Mon, 05/02/2011 - 15:43 | 1231226 falak pema
falak pema's picture

silver is a fickle queen. My story of ancient egypt said it all...

Mon, 05/02/2011 - 15:46 | 1231227 Cognitive Dissonance
Cognitive Dissonance's picture

Before you know it they will be checking for loose change behind the sofa cushions at the Fed and Treasury.

"I found a quarter over here Timmy. Will that help?"

Mon, 05/02/2011 - 15:45 | 1231236 TruthInSunshine
TruthInSunshine's picture

The government is rolling out a new security screening device; the Upside Down Citizen Shaker 8000.

It's hit rate of anyone carrying pre-1964 quarters is 100% in elaborate testing.

Mon, 05/02/2011 - 16:33 | 1231447 Cognitive Dissonance
Cognitive Dissonance's picture

Below is a photo that was smuggled out of the Homeland Security test site of a successful test of the Upside Down Citizen Shaker 8000. It is being manufactured by GE and will be sold to the TSA for $7 million per.

 

Mon, 05/02/2011 - 22:15 | 1232595 TruthInSunshine
TruthInSunshine's picture

Thanks, CD. Very nice, too.

I envision there will be a stainless steel grate underneath the 'pocket content fall area' to collect the valuables, and a sophisticated sorter to separate the coins by denomination and silver/copper/etc. content, too.

Tue, 05/03/2011 - 02:17 | 1233034 StychoKiller
StychoKiller's picture

Comes complete with "cattle" prod to get lazy citizens to wrigglin'! :>D

Tue, 05/03/2011 - 05:02 | 1233137 medicalstudent
medicalstudent's picture

an ealier arnie gunderson...

 

nahhhh, not risky enough... so he left to study nuclear energy.

 

(reverse osmosis. hepa. polimaster.)

 

 

Mon, 05/02/2011 - 15:56 | 1231304 I Got Worms
I Got Worms's picture

Timmah: "Was it minted before 1965?"

Mon, 05/02/2011 - 15:43 | 1231228 NOTW777
NOTW777's picture

re-elect barack hussein obama - go to: cnbc.com for info

for questions or donations contact: john harwood

Mon, 05/02/2011 - 16:12 | 1231356 NOTW777
NOTW777's picture

hilarious - hear that. bill griffeth says it was thought there would be a rally when they caught obama.

Mon, 05/02/2011 - 15:47 | 1231232 falak pema
falak pema's picture

Why does Meredith have such a bad image with MSM? I find her very courageous and on the button...

Tue, 05/03/2011 - 02:19 | 1233035 StychoKiller
StychoKiller's picture

TPTB always shoots the bearer of bad news.

Mon, 05/02/2011 - 15:45 | 1231239 Ruffcut
Ruffcut's picture

Holy shit batman.

This is where the rubber meets the road.

This is not going to end well.

Perfect showing how the Hill, of critters, support their sheeples. DC, district of criminals bastards,

Sell the silver and rollover to lead, food and those piddly things.

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