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Treasury Places $35 Billion in 5 Year Notes; US Now $64 Billion Away ($35 Billion Tomorrow) From Debt Ceiling Breach

Tyler Durden's picture


Like clockwork, the Treasury placed $35 billion in 5 year bonds with the usual suspects. While the high yield was the highest since May 2010, at 2.26% there was nothing particularly notable about this auction, which saw a 2.26 Bid To Cover, continuing the trend of a gradual trendline ever higher, with Direct bidders taking down 11.2%, the highest since November, Indirects jumping to 42.4% from 34.2% last month which was the lowest in two years, and Primary Dealers eating up the balance. The bond came with a 1.5 bps tail to the When Issued which had been hugging 2.246%. What is far more eventful is that with yesterday's $35 billion 2 Year auction, today's $35 billion in 5 Years, and soon, tomorrow $29 billion in 7 Years, total US debt subject to limit will be $14.258 trillion: just one auction away, or $35 billion, from breaching the debt ceiling. Also, the total debt, not just that subject to the ceiling, could pass the legal threshold as early as tomorrow (pro forma for settlement).


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Tue, 03/29/2011 - 13:48 | 1113439 chopper read
chopper read's picture


Tue, 03/29/2011 - 13:57 | 1113484 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I don't know.

He did NOT say that, did he?????  BAHAHAHAHAHA!

I thought he said,

I'm not telling...and you are no longer invited to my birthday party.  PPPtthhbbttt!!!

Maybe he said both.  What a loser.  He has the maturity of a five year old....or is that five year bond?  Luckily, he is a Doctor, so he totally knows what he is doing.  Totally.

Tue, 03/29/2011 - 13:19 | 1113337 RunningMan
RunningMan's picture

Debt, schmebt. Fire up the auxiliary power at Indian Point and get the presses rolling at full throttle.

Tue, 03/29/2011 - 13:39 | 1113401 Harlequin001
Harlequin001's picture

onward and upward as they say...

Tue, 03/29/2011 - 14:32 | 1113631 goldfish1
goldfish1's picture

Rules and debt ceilings do not apply.

Tue, 03/29/2011 - 16:15 | 1114098 divide_by_zero
divide_by_zero's picture

Like I said about the Fed FOIA ruling, exactly who will enforce it? Or for that matter Obamacare being ruled unconstitutional, rule of law no longer in effect.

Tue, 03/29/2011 - 13:20 | 1113341 Racer
Racer's picture

Well done evil ones, the latest debt target has nearly been achieved

Tue, 03/29/2011 - 13:23 | 1113346 dbTX
dbTX's picture

they must be blowing through cash like crap through a goose

Tue, 03/29/2011 - 14:14 | 1113559 Larry Darrell
Larry Darrell's picture

Spending for FY 2011

~$3.3 trillion (or $3,300,000,000,000)

= $3.3 E+12 / 365 --> $9,041,195,890 per day

= $9,041,195,890 / 24 --> $376,712,329 per hour

= $376,712,329 / 60 --> $6,278,539 per minute

= $6,278,539 / 60 --> $104,642 per second


That's right.  Your government spends way more than the average citizens' YEARLY income EVERY SECOND OF EVERY DAY

But, the US economy is NOT, I repeat NOT a ponzi scheme (/s)

Tue, 03/29/2011 - 13:23 | 1113349 the not so migh...
the not so mighty maximiza's picture

they will raise the debt ceiling in the middle of the night when no one is looking.

Tue, 03/29/2011 - 14:07 | 1113535 Harlequin001
Harlequin001's picture

all the newsworthiness of a credit card limit increase...

when you think about it.

Tue, 03/29/2011 - 14:14 | 1113567 Zina
Zina's picture

The problem is: tens of Tea Party-backed Republican representatives elected in last November are afraid of voting in favor of the debt ceiling raising, and have to explain that vote to their voters...

So, there is a real danger the debt celing raising don't pass the vote. And Obama will not put that into vote until he is sure that will pass. In the meantime, there is a real risk the debt is reached, and all hell breaks loose... "Black swan", some will say...

Tue, 03/29/2011 - 14:37 | 1113658 the not so migh...
the not so mighty maximiza's picture

It will be interesting if the tea partiers actually do what they say.

Wed, 03/30/2011 - 03:27 | 1116112 StychoKiller
StychoKiller's picture

Time to count the number of spines in Congress...

Tue, 03/29/2011 - 13:21 | 1113350 RobotTrader
RobotTrader's picture

Since when has the debt ceiling mattered?

They will just raise it.

Or print more paper anyway, monetize something else off-balance sheet, or whatever.

Really, it is a non-event.

Tue, 03/29/2011 - 13:29 | 1113373 Spastica Rex
Spastica Rex's picture


Tue, 03/29/2011 - 13:33 | 1113378 Long-John-Silver
Long-John-Silver's picture


As long as the Bernak can swap counterfeit paper between the FED and Treasury and people continue to take FRN's as real money, the debt means nothing.

Tue, 03/29/2011 - 14:03 | 1113515 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Since when does anything matter in finance?


Tue, 03/29/2011 - 17:33 | 1114517 andybev01
andybev01's picture


Tue, 03/29/2011 - 16:48 | 1114306 Ethics Gradient
Ethics Gradient's picture


They're not going to stop paying coupons.

Tue, 03/29/2011 - 13:22 | 1113352 jkruffin
jkruffin's picture

Must be why they are pumping stocks so hard today, because when the ceiling is breached, its gonna crash and yields are going way up.

Tue, 03/29/2011 - 14:56 | 1113706 Dr. No
Dr. No's picture

and yields are going way up


Not sure.  Supply and demand right?  IF the treasury actually stopped issuing debt, supply would dry up.  With the FED continuing POMO, demand is still heavy.  Prices would go up.  Yields down.  Am I wrong on this? There may be some posturing like issue more short term rather than long term in order to stay under the limit.  None the less, will be interesting. 

EDIT:  But then the treasury would have to default (since it is a ponzi), resulting in HUGE deflationary forces.   Yields?  not sure since a default is a default.  my head just exploded.

Tue, 03/29/2011 - 13:28 | 1113355 Cdad
Cdad's picture

the total debt, not just that subject to the ceiling, could pass the legal threshold as early as tomorrow (pro forma for settlement).

Now that would surprise people...right?  People would not be expecting that, would they?  With Bob Pisani screaming "teflon" and "the nothing matters rally", and even the supreme idiot over at the Ministry of Truth, Tyler Mathisen, figuring out that no one is selling....but one can see a sell off coming, right?  No one is bothered that the very last buyer of everything in the market is about to hit zero on his balance...and no one can see it coming.

And Apple languishing in the rear, and casual diners levitating on PixieDust lots changing hands [check the one day chart on EAT...literally...I don't think any lots are actually moving...but the price is oddly] one is really thinking to sell, right?

And you got your Iphone ready...right?

Tue, 03/29/2011 - 13:32 | 1113374 Greater Fool
Greater Fool's picture

Yes, including a special e*Trade app featuring a cute little talking baby that projectile barfs every time I hit "sell."

Unfortunately, the only other setting for that app has Ken Griffin saying "Buy the Fucking Dip, You Fucking Idiot." And Ken Griffin is way creepier than that talking baby.

Tue, 03/29/2011 - 13:38 | 1113393 Cdad
Cdad's picture

Understood Greater Fool,

You are putting yourself down for "complete surprise" then, and being straight up honest about it, which I appreciate.  Do I have that right?


Tue, 03/29/2011 - 13:40 | 1113400 SheepDog-One
SheepDog-One's picture

Everyone sees clearly the game is over, but for today, stocks love it and climb higher. Like a crackhead on the Golden Gate bridge.

Tue, 03/29/2011 - 13:44 | 1113420 Cdad
Cdad's picture

And so Dog is also in camp "surprise."  Got it.

Tue, 03/29/2011 - 13:51 | 1113465 camaro68ss
camaro68ss's picture

I LOL so loud everyone is looking at me in the office. Thats good stuff!

Tue, 03/29/2011 - 13:28 | 1113364 TruthInSunshine
TruthInSunshine's picture

I'd love to see the government shut down.

The best thing that could happen to this country is for her citizens to realize that they'd be better off without the Faustian Pact many of them have bartered with the government, and that getting back to some semblance of limited government would ensure that there could once again be hope that their childrens' lives would be better than theirs.

Tue, 03/29/2011 - 13:40 | 1113403 traderjoe
traderjoe's picture

So true. But, I think the PTB have masterfully relied on the people's desire for short-term gain, over long-term prosperity.  

Tue, 03/29/2011 - 17:37 | 1114534 andybev01
andybev01's picture

America: where instant gratification isn't fast enough.

Tue, 03/29/2011 - 13:40 | 1113407 sdmjake
sdmjake's picture

That is my great wish as well {but much to idealogical to work in reality}...but we can dream!

Tue, 03/29/2011 - 13:41 | 1113410 SheepDog-One
SheepDog-One's picture

Only going to see that after about 100 million or more americans are dead.

Tue, 03/29/2011 - 13:56 | 1113455 depression
depression's picture

The budget deadline is April 8, word is the negotiations are not going well at all. A shutdown does look possible. The debt ceiling is gonna get hit right about that same time, first week or April. and then QE-2 ends in June... gas at $4 per gallon, could make for some interesting times this summer.

So I guess the market is pricing in that Congress will raise the debt ceiling by another $1Trillion or so before the end of next week, the new budget will pass before April 8, and QE-3 will come online in the late May time frame.

Tue, 03/29/2011 - 13:31 | 1113372 Fenlander
Fenlander's picture

forgive me, I'm a Brit so don't follow the US Congress closely.  Is it a legal requirement in the US for Congress to formally authorise a raise in the debt ceiling,  or is it something that can happen with the simple signature of some official?

Tue, 03/29/2011 - 13:38 | 1113398 Bastiat
Bastiat's picture

We really don't have any legal requirements for the executive branch anymore.

Tue, 03/29/2011 - 13:42 | 1113412 Long-John-Silver
Long-John-Silver's picture

It's become an Oligarchy with a powerless and irrelevant congress.

Tue, 03/29/2011 - 13:41 | 1113404 Long-John-Silver
Long-John-Silver's picture

Technically congress must authorise a new debt limit or the government shuts down. At this point the Republicans fear a shutdown as Democrats want a shut down so they can blame the Republicans for a Government shutdown. The Republicans will be forced to increase the debt limit so nothing changes. The US Dollar WILL crash at some point in this ignorant political game. I gave up long ago and convert all US Dollars to physical Gold and Silver. At some point Gold and Silver will be worth an infinite number of US Dollars because no one will trade any amount of them for anything including food, energy, Gold, and Silver.

Tue, 03/29/2011 - 13:45 | 1113426 Fenlander
Fenlander's picture

Thanks LJS.  Follow up:  is Congress actually doing anything about this?  Is there some emergency vote or even debate scheduled?  Per TD's forecast, what happens on Thursday when the limit is breached?

Tue, 03/29/2011 - 13:54 | 1113470 Long-John-Silver
Long-John-Silver's picture

congress is irrelevant. They will be forced by Obama and his pawns to increase the debt limit. Obama will continue to spend the unlimited number of FRN's the Bernak can print on paper and digital ones and zeros. As long as food and energy is exempted from inflation calculations everything will remain the same.

Tue, 03/29/2011 - 13:58 | 1113486 TruthInSunshine
TruthInSunshine's picture

It's called Kabuki Theater.

See, our political parties aren't really different, as they work for the same masters (not voters, either).

They'll raise the debt ceiling because there's no way for their masters to rape and pillage further if taxpayers can't be squeezed further.

Theoretically, if they didn't raise the debt ceiling, the government would have to start scaling back all non-essential government functions (in reality, this would be about 92.387% of them, but in real life, it's about 5% to 10%), so that they could match the existing debt ceiling.

But again, that's a theoretical exercise in Amerika.

Tue, 03/29/2011 - 13:49 | 1113446 TruthInSunshine
TruthInSunshine's picture

Fenlander, Congress has 'the purse,' as they say, under our Constitution.

Yes, the House of Representative and Senate have to both vote to raise the debt ceiling in order to allow further spending to occur.

Tue, 03/29/2011 - 13:57 | 1113482 metastar
metastar's picture

Hmmmm. It seems to me that the unelected FED has the purse and thus must be ended.

Tue, 03/29/2011 - 14:02 | 1113509 TruthInSunshine
TruthInSunshine's picture

Congress delegated its coinage authority, de facto, to The Federal Reserve, in 1913.


Tue, 03/29/2011 - 13:56 | 1113479 metastar
metastar's picture

Let me explain it real simple.

There is no constitution, no supreme law of the land.

In fact, there is no law period! There is simply force wielded by a brutal regime upon its citizens and the world to keep power for itself and big corporate interests.

America is dead.

Tue, 03/29/2011 - 13:58 | 1113487 Long-John-Silver
Long-John-Silver's picture


Tue, 03/29/2011 - 13:33 | 1113376 plocequ1
plocequ1's picture

Who cares. Just buy stocks and let Dr. Bernanke perform his majestic work. There is no debt ceiling. Its all good.

Tue, 03/29/2011 - 13:32 | 1113380 ShankyS
ShankyS's picture

Bernanke says, "Just pull it. Just pull it."

Tue, 03/29/2011 - 13:41 | 1113409 traderjoe
Tue, 03/29/2011 - 13:35 | 1113385 iinthesky
iinthesky's picture

Someone tell me is this makes sense.. The Bernank says there is no inflation and he sticks to that story. But yet we have crazy price inflation. Where are the mega bank primary dealers getting the money to constantly scoop up all these Notes and Bonds? I believe they're dipping into th so-called sterile excess reserves parked in their accounts by The Bernank and using their iFed applet to conjur funds for Treasury. Tiny Tim then goes and spends all that into the economy inflating indirectly and by stealth? Could that be one of the ways they're hiding this?

Tue, 03/29/2011 - 13:46 | 1113432 traderjoe
traderjoe's picture

In fractional reserve banking, the private banks can create money out of thin air. They do not "need" money to buy UST's. They simply create the money. See the (in)famous Credit River case (google those terms). See Modern Monetary Mechanics to understand how (debt-)money is created in the fractional reserve system.

And finally, read to understand why and how the Fed was created.

Essentially, private banks can create money for free and lend it to the Treasury at interest. It's the scam of the century.

Tue, 03/29/2011 - 14:36 | 1113645 iinthesky
iinthesky's picture

Joe.. thanks for the info. I read MMM and Jekyll Island and the Credit River case and many other books and listen to Rod Class all the time. I know the system I was just speculating if this is a way they are possibly hiding that they are leaking the so-caleld sterile reserves at the fed into the real economy and giving The Bernank plausible deniability cause the full-o-shit meter is off the charts.

Tue, 03/29/2011 - 15:01 | 1113753 jkruffin
jkruffin's picture

Here is how the scam works in real action:

Permit me to issue and control the money of the nation, and I care not who makes the laws.
~ Mayer Anselm Rothschild, Banker

I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
~ Thomas Jefferson

Where does money come from? - As best I can tell, money is literally created from debt. So when a bank is established, it makes a deposit into a Federal reserve bank. The amount they deposit determines how much money the bank can (initially) loan. So if a bank puts $10,000 into the Federal reserve, they can loan something like 10 times that, or $100,000. In other words, the act of depositing into Federal reserve gives them the right to loan $100,000. Where does the extra $90,000 come from?

That's the sleight of hand that no one talks about.

When you are approved by a bank for a loan of $100,000, the bank has the right to add a $100,000 balance into your account (assuming it's put the $10,000 into Fed reserve). Existing money isn't shifted from another account to your account. In fact, $90,000 of that money doesn't exist at all before the bank makes the deposit into your account. The $100,000 amount is simply entered or added to your account. It's like entering a number into a spreadsheet...but the bank has the right to do so as granted by (who? government? fed?).

So where we started with $10,000 deposit into a Federal reserve bank, we now have another $90,000 added to the money system.

But it doesn't end there. If the $100,000 is deposited into a bank, it can be used as the basis for ANOTHER loan. Technically, the next loan in the cycle can be made for about 90% of the deposit (in this case $90,000) which, if deposited, can be the basis for yet another loan of around $85,000, and so on. This cycle continues, transforming a $10,000 deposit into the Federal reserve into around a $1,000,000 in loans AND newly created money.

Again, with a $10,000 deposit into the Federal reserve, the banks gains the right to create around $1,000,000 in loans if the loan/deposit cycle is taken to it's conclusion.

This explains why banks can make a good return on low interest rates. The are lending money they do not hold, that they created literally from nothing more than a loan agreement from you.

This system is possible because we got rid of money representing an asset (like gold or silver). Instead, money is declared by law as legal tender with no promise that there is an asset behind it. In other words, today's money is not backed by any asset. If it were, banks would not be able to loan money the way they do. To loan the money, the government would have to have an asset behind the money. But that isn't required an longer. Hence bankers get very rich.

Something fuzzy about the legal tender/backed by asset stuff above, but doesn't negate the fact that money is created by debt.

Tue, 03/29/2011 - 13:37 | 1113395 99er
Tue, 03/29/2011 - 13:41 | 1113405 SheepDog-One
SheepDog-One's picture

Bernanke with his ballsack in a bear trap was earlier heard to yelp 'Dont worry, I got this shit under control!'

Tue, 03/29/2011 - 17:20 | 1114452 jkruffin
jkruffin's picture

No, he said that when his Depends sprung a leak.

Tue, 03/29/2011 - 13:43 | 1113419 ml8ml8
ml8ml8's picture

Announcement that the debt celing is lifted should be good for another 150 points on the DJIA.

Tue, 03/29/2011 - 13:45 | 1113424 TradingJoe
TradingJoe's picture

"schmeiss den Benster aus dem Fenster"

Tue, 03/29/2011 - 13:47 | 1113429 chopper read
chopper read's picture


Tue, 03/29/2011 - 13:46 | 1113433 myTPisUSD
myTPisUSD's picture

POMO and the fed-treasury circle jerk is the best example of a snake eating it's own tail that I can think of.

Tue, 03/29/2011 - 13:54 | 1113468 TruthInSunshine
TruthInSunshine's picture

Or a dog licking its own asshole.

Tue, 03/29/2011 - 13:48 | 1113434 Saxxon
Saxxon's picture

Well, I'm long SPXU here anyway.  May hold overnight.  Wow, this feels like Summer 2009.


Tue, 03/29/2011 - 13:55 | 1113478 thedrickster
thedrickster's picture

When the risk-free asset suddenly becomes risky, I fear the S&P becoming a landing pad for quality flight....

Bizzaro world.

Tue, 03/29/2011 - 13:50 | 1113458 Yield2Greatness
Yield2Greatness's picture

Debt ceiling is a joke.  Why have it?  Why is it relevant?  Just print and borrow, regardless of the ceiling; who's is going to do anything about it?  Certainly not Congress, Obama wants the presses going, and the courts are so bottled up they get in their own way, while on the path of trying to do something right.

Tue, 03/29/2011 - 13:50 | 1113461 digalert
digalert's picture

Can't be, cause we be in recovery, the Bernank said so.

Tue, 03/29/2011 - 13:54 | 1113474 Josh Randall
Josh Randall's picture

Dominos lining up? Debt Ceiling coming up, Impeachable WAR without Congress approval offense by Soetero, COMedianEx Silver default, and full Nuke meltdown confirmation...

Tue, 03/29/2011 - 14:02 | 1113506 Long-John-Silver
Long-John-Silver's picture

The Oligarchy remains in full control. Move along, nothing you can do about it.

Tue, 03/29/2011 - 14:04 | 1113510 depression
depression's picture

Budget crisis, CR ends April 8, so they either do another CR and kick the can into May or the Fed. govt. shuts down on April 8. I think we will hit the debt celing before that date.

QE-2 is slowly winding down, notice the POMO's are smaller and less frequent. Today for example the Fed drained reserves using reverse repo's. Bernank will have to start ramping up QE-3 in May.

Tue, 03/29/2011 - 14:00 | 1113496 ml8ml8
ml8ml8's picture

Who sues whom if the debt ceiling is violated?  Do citizens have a private right of action under that statute?  I'm not even going to bother looking. 

Tue, 03/29/2011 - 14:03 | 1113519 Long-John-Silver
Long-John-Silver's picture

Metastar explains it perfectly

Let me explain it real simple.

There is no constitution, no supreme law of the land.

In fact, there is no law period! There is simply force wielded by a brutal regime upon its citizens and the world to keep power for itself and big corporate interests.

America is dead.

Tue, 03/29/2011 - 14:08 | 1113544 thedrickster
thedrickster's picture


This reality, Empire 2011.

Tue, 03/29/2011 - 14:21 | 1113592 aerial view
aerial view's picture

exactly! worth re-posting periodically especially for the newbies and sheeple.

Tue, 03/29/2011 - 14:05 | 1113525 TruthInSunshine
TruthInSunshine's picture


Citizens doNOT have such a private right of action, as they lack standing, to litigate such matters, according to the SCOTUS.

Tue, 03/29/2011 - 14:13 | 1113558 thedrickster
thedrickster's picture

The insanity of standing, coupled with the SCOTUS power to decide the meaning of its employer's limiting compact has rendered the Consitution DOA.

This bitch hit the iceberg long ago, time to jump.

Tue, 03/29/2011 - 14:20 | 1113593 Long-John-Silver
Long-John-Silver's picture

Why else would Gold be over $1,416 and Silver over $37 an ounce

Tue, 03/29/2011 - 14:03 | 1113511 Dr. No
Dr. No's picture

So if the debt ceiling is the law of the land, by breaking it, will Timmah go to jail?  I have visions of "The Blues Brothers" when paying the cook county assessor's office, the moment the money is handed over, the cuffs get slapped on.

Tue, 03/29/2011 - 14:03 | 1113513 Saxxon
Saxxon's picture

@Josh Randall, something like that I am thinking.  I don't believe the effects of $100+ crude have worked their way onto Main Street just yet.  But we know the Fed looks farther down the block than the average Joe, and I speculate the Fed is setting up another temporary corrective action.

Here we are recently at $4 for 87 octane gas in No. California; which is a pivot point in my personal book.  On the other hand melt-up is in full swing and there is NO FEAR.

Tue, 03/29/2011 - 14:04 | 1113523 Zina
Zina's picture

Can't wait to see what happens when this "black swan" comes: "oh, the US debt reached the ceiling, we can't do more auctions, who could imagine something like this would happen?"

And I'm starting to suspect Obama is afraid of puting the raising of the debt ceiling  into vote. If he wasn't afraid, he would have done it already. Why is him waiting the debt approaching so dangerous levels before doing that? Is he afraid of not having enough votes to pass the raising? The House is full of Tea Party-backed Republican representatives elected in last November...

Tue, 03/29/2011 - 16:02 | 1114006 NidStyles
NidStyles's picture

Don't count on them to stand against it. They have their asses on the line too. If they don't extend, the government shut's down and everyone will blame them. They will not get paid while this is going on either. They extend and they get voted out in the next election cycle.



Tue, 03/29/2011 - 14:06 | 1113530 LawsofPhysics
LawsofPhysics's picture

Go ahead, GOP-controlled congress, raise the debt ceiling, I dare you.  Either way my golden and silver buying power gets stronger.  Thanks!

Tue, 03/29/2011 - 14:08 | 1113545 johny2
johny2's picture

It happens all the time, Some people cheatting others. But this is the biggest Ponzi scheme ever and it is getting bigger by the day. 


Tue, 03/29/2011 - 14:17 | 1113573 Seasmoke
Seasmoke's picture

all ponzis collapse and take down even the top cheaters....

Tue, 03/29/2011 - 14:34 | 1113646 johny2
johny2's picture

All of them come to its natural conclusion, where it gets so big that there is nothing for it but to collapse. However very often the creators of the ponzi get away with all the money and no pain. I am quite sure that the victims of this Ponzi ( USA, Chinese, Japanese and others ) will be blaming each other instead of the real Thieves. 

Tue, 03/29/2011 - 14:12 | 1113552 TruthInSunshine
TruthInSunshine's picture

Anyone who doesn't think the debt ceiling won't be raised in quick order is not paying attention, I'm afraid to report.

Will there be hyperbolic theater and huffing and panting? Sure. That's worked for politicians before, in terms of perceptions by the Sheeple, and they'll use it until it's a liability.

Will there be a shutdown for more than a few days or a few weeks, at the complete outside fringe possibility? No way.

TPTB would start spreading rumors of how Social Security, SSI, SNAP, Medicare, etc. payments would be in jeopardy, and there'd be a flood of angry, petrified calls to Congress by worried cheese eaters.

Tue, 03/29/2011 - 14:10 | 1113554 I Am The Unknow...
I Am The Unknown Comic's picture

It must be time for a bigger, better, more-improved, lemon-scented crisis.  Obviously Japan, Libya, et al are not cutting it.  I can only wonder what lies before us.  Something must happen very soon in order to justify an enormous emergency increase in the US debt ceiling and/or another massive TARP/TALF like scheme. 

Maybe I'm thinking too small....maybe it will be World Bank and/or IMF style and that the US TARP was just a rehearsal.  I can imagine it now....the IMF members leadership (including Obama/Geithner, Sarkozy, Merkel et al) go running to Zoellick at the World Bank in the style and urgency of Hanky Paulson with an urgent demand that the World Bank print up a gazillion in Special Drawing Rights or else "the entire world economy will collapse and there will be martial law all over the world."

Times like this I am inclined to withdraw all cash and hunker down in physical PMs.  Easier said than done in an emergency.  I mean seriously, if the US legally hits the debt ceiling in two weeks at the next treasury auction, which is before the 4/15 deadline for tax receipts (or filing for extensions), then game over and major crisis. 

There will have to be some impetus to twist the arms of US congresspeople to get the ceiling raised within 14 days.  If they won't do it, then it will be done for them.         

Tue, 03/29/2011 - 14:13 | 1113565 Seasmoke
Seasmoke's picture

no way they make it to April 15.........April Fools day ??

Tue, 03/29/2011 - 14:16 | 1113580 tmosley
tmosley's picture

Weren't we down to zero operating cash a while back?  What happened with that?

Tue, 03/29/2011 - 15:12 | 1113799 I Am The Unknow...
I Am The Unknown Comic's picture

For some inexplicable reason, many ordinary Americans choose to send in their checks to the US Treasury (for IRS debt obligations) before April 15.  I have never understood how so many people could be so ignorant as to pay their debts in advance of the due date.   

Tue, 03/29/2011 - 14:25 | 1113611 progro
progro's picture

Tyler is a little off-base. The debt ceiling encompasses total debt not debt issued.

If you look at the Treasury balance sheet, Treasury is being offset with tax receipts.

Looks like another 60 days before we have a breach.




Tue, 03/29/2011 - 14:42 | 1113671 Tyler Durden
Tyler Durden's picture

The only thing that offsets the total debt is if there is an accelerated redemption of bills/bonds in the next two weeks. And based on the issuance calendar where we have 3, 10, and 30 Years (probably another $66 billion total) coming on the 12, 13 and 14, it seems that's when the actual trigger will be surpassed.

Tue, 03/29/2011 - 14:46 | 1113703 progro
progro's picture

So why did the total public debt go down in the past 4 days?

Look at:

then compare it to:


Tue, 03/29/2011 - 16:46 | 1114298 Tyler Durden
Tyler Durden's picture

It went down based on drivers from Table III A, when there was a greater marginal drop due to more Bill redemptions than issuance. The operating cash, which is a product of the "cash flow" is not netted out in the debt table.

Tue, 03/29/2011 - 17:29 | 1114486 overmedicatedun...
overmedicatedundersexed's picture

no trigger TD, saudi has a check in the mail to cover libya..

Tue, 03/29/2011 - 14:34 | 1113649 aerial view
aerial view's picture

It will be interesting to hear OPuppetama's response to the media when debt ceiling is raised another trillion.

Tue, 03/29/2011 - 14:45 | 1113696 hitmikey
hitmikey's picture

Drop in the bucket but $29Bln 7-year notes tomorrow, not $35Bln.

Tue, 03/29/2011 - 15:10 | 1113786 tinsmith
tinsmith's picture

Here's what's really happening on the ground re: inflation.  I own a small sheet metal fabrication company.  Since the end of Nov. the price I pay for raw materials has gone up 50%.  I know this may be off topic.  But underneath all the numbers and statistics and skewed B.S. the truth is this: Our Dollars Are Worth Less.  Period.  I understand the fluctuations and intricacies of the price of steel.  I know there are other outside forces at work, but at the end of the day the dollar is starting to suck.

Tue, 03/29/2011 - 19:50 | 1114998 bugs_
bugs_'s picture

Hold the line guys.  No increase in the debt ceiling.  Cease and Desisit.

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