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Treasury Places $35 Billion in 5 Year Notes; US Now $64 Billion Away ($35 Billion Tomorrow) From Debt Ceiling Breach
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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http://www.youtube.com/watch?v=JNDcuVMnFbc
+1
He did NOT say that, did he????? BAHAHAHAHAHA!
I thought he said,
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.
Debt, schmebt. Fire up the auxiliary power at Indian Point and get the presses rolling at full throttle.
onward and upward as they say...
Rules and debt ceilings do not apply.
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 Or for that matter Obamacare being ruled unconstitutional, rule of law no longer in effect.
Well done evil ones, the latest debt target has nearly been achieved
they must be blowing through cash like crap through a goose
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)
they will raise the debt ceiling in the middle of the night when no one is looking.
all the newsworthiness of a credit card limit increase...
when you think about it.
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...
It will be interesting if the tea partiers actually do what they say.
Time to count the number of spines in Congress...
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.
Boring.
+1
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.
Since when does anything matter in finance?
Zombiebwe...
Yup.
They're not going to stop paying coupons.
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.
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.
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 still...no 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]...no one is really thinking to sell, right?
And you got your Iphone ready...right?
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.
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?
Everyone sees clearly the game is over, but for today, stocks love it and climb higher. Like a crackhead on the Golden Gate bridge.
And so Dog is also in camp "surprise." Got it.
I LOL so loud everyone is looking at me in the office. Thats good stuff!
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.
So true. But, I think the PTB have masterfully relied on the people's desire for short-term gain, over long-term prosperity.
America: where instant gratification isn't fast enough.
That is my great wish as well {but much to idealogical to work in reality}...but we can dream!
Only going to see that after about 100 million or more americans are dead.
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.
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?
We really don't have any legal requirements for the executive branch anymore.
It's become an Oligarchy with a powerless and irrelevant congress.
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.
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?
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.
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.
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.
Hmmmm. It seems to me that the unelected FED has the purse and thus must be ended.
Congress delegated its coinage authority, de facto, to The Federal Reserve, in 1913.
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.
Perfect
Who cares. Just buy stocks and let Dr. Bernanke perform his majestic work. There is no debt ceiling. Its all good.
Bernanke says, "Just pull it. Just pull it."
www.buildingwhat.org
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?
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. http://www.rayservers.com/images/ModernMoneyMechanics.pdf
And finally, read www.bigeye.com/griffin.htm 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.
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.
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.
/ES
H&S target of 1285.30.
http://www.zerohedge.com/forum/99er-charts-0
Bernanke with his ballsack in a bear trap was earlier heard to yelp 'Dont worry, I got this shit under control!'
No, he said that when his Depends sprung a leak.
Announcement that the debt celing is lifted should be good for another 150 points on the DJIA.
"schmeiss den Benster aus dem Fenster"
.
POMO and the fed-treasury circle jerk is the best example of a snake eating it's own tail that I can think of.
Or a dog licking its own asshole.
Well, I'm long SPXU here anyway. May hold overnight. Wow, this feels like Summer 2009.
When the risk-free asset suddenly becomes risky, I fear the S&P becoming a landing pad for quality flight....
Bizzaro world.
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.
Can't be, cause we be in recovery, the Bernank said so.
Dominos lining up? Debt Ceiling coming up, Impeachable WAR without Congress approval offense by Soetero, COMedianEx Silver default, and full Nuke meltdown confirmation...
The Oligarchy remains in full control. Move along, nothing you can do about it.
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.
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.
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.
Bravo.
This reality, Empire 2011.
exactly! worth re-posting periodically especially for the newbies and sheeple.
No.
Citizens doNOT have such a private right of action, as they lack standing, to litigate such matters, according to the SCOTUS.
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.
Why else would Gold be over $1,416 and Silver over $37 an ounce
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.
@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.
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...
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.
Go ahead, GOP-controlled congress, raise the debt ceiling, I dare you. Either way my golden and silver buying power gets stronger. Thanks!
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.
all ponzis collapse and take down even the top cheaters....
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.
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.
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.
no way they make it to April 15.........April Fools day ??
Weren't we down to zero operating cash a while back? What happened with that?
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.
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.
https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=11032500.pdf
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.
So why did the total public debt go down in the past 4 days?
Look at:
https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=11032500.pdf
then compare it to:
https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=11032100.pdf
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.
no trigger TD, saudi has a check in the mail to cover libya..
It will be interesting to hear OPuppetama's response to the media when debt ceiling is raised another trillion.
Drop in the bucket but $29Bln 7-year notes tomorrow, not $35Bln.
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.
Hold the line guys. No increase in the debt ceiling. Cease and Desisit.