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Treasury Redeems $144 Billion In Bills In First Four Days Of May

Tyler Durden's picture


A few days ago we reported, quite stunned, that the US Treasury had redeemed nearly $600 billion in Bills in the month of April. Alas, the side-effects of an massively short-maturity heavy bond curve will be here to haunts us for a long time: according to today's DTS, in the first 4 business days of May alone, the UST has redeemed $144 billion in Bills. Annualized this number is surely something that even Richard Feynman would not joke about. We have gotten to the point where the roll issue is not a monthly concern, but is becoming a weekly funding threat, and even daily. Of course, as we speculated in December, what better way to raise demand for Treasuries than to stage an equity selloff. Well, we got our selloff, and the 10 Year was trading in the lower 3% range today. However, the risk now is how the sovereign fire will spread through the periphery and into the core. Already, we are seeing that CDS traders are massively betting on a collapse of the UK as the next bastion of sovereign spending lunacy. And when the UK goes, Germany is next, shortly to be followed by Japan and the US. At that point the only buyer of US debt will be the US itself. Which will lead to the final outcome of massive consumer deflation as economic collapse finally strikes home, coupled with asset price hyperinflation, as a gallon of oil hits $10 (and helping the Dow hit 36,000). And as this is not an equilibrium state, the outcome will be, as it always is in these situations, war. Hopefully the US is good as it historically has been at finding its "deserving" opponent, WMDs aside. Otherwise, things may be a little rough for the great declining American civilization after the next 5 years.


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Fri, 05/07/2010 - 17:57 | 337293 sysin3
sysin3's picture

first 4 business days of April should probably be edited to "May".  Or I'm an idiot.  Or both.

Fri, 05/07/2010 - 18:00 | 337297 Tyler Durden
Tyler Durden's picture

fixed on the former. not sure about the latter.

Fri, 05/07/2010 - 18:10 | 337319 Implicit simplicit
Implicit simplicit's picture

Thanks for zero hedge.

Fri, 05/07/2010 - 18:18 | 337340 SilverIsKing
SilverIsKing's picture

IS, have you bought any physical gold or silver yet?

Fri, 05/07/2010 - 18:36 | 337368 Implicit simplicit
Implicit simplicit's picture

I am seriously looking into it. 1st things 1st. This week I decided to start a business and personal accounts at a credit union.

 I changed my phone and got an unlisted number. Next I will stiff Citibank for jacking my rate even though I never missed a payment (they did this after the crash), and refusing to lower more than 1 pt. at a time. They basically told me they don't negotiate until your delinquent.(so be it) Well, that part comes easy. I used to be a juvenile delinquent.

Next, I will buy physical gold and silver. Like an idiot I bought $100 worth of US gold coins and realized that wasn't a good idea, som I started spending them.

"I'm an air conditioned gypsy, watch the police and the tax man miss me"

Fri, 05/07/2010 - 19:36 | 337426 Janice
Janice's picture

NO!  Get another credit card, purchase gold & silver...then default.  Beats them at their own game.

Fri, 05/07/2010 - 19:46 | 337450 Implicit simplicit
Implicit simplicit's picture

I am only really pissed off at Citi on a personal personal level, while I am pissed at all the big banks in general; maybe cap I too, we'll see.

Fri, 05/07/2010 - 20:03 | 337472 fuu
fuu's picture

walstreetpro2 is that you?

Fri, 05/07/2010 - 20:25 | 337488 Janice
Janice's picture

Nada ~ I need no alias, never have. 

"I am, what I am, what I am".  Popeye

Fri, 05/07/2010 - 23:09 | 337619 i.knoknot
i.knoknot's picture

he's not saying "yam what i am" ?

all these years...

Fri, 05/07/2010 - 23:48 | 337636 Janice
Janice's picture

I'm a southerner...we have sweet potatoes, not yams.  Maybe I should say sweet taters.

Sat, 05/08/2010 - 17:19 | 338317 IBelieveInMagic
IBelieveInMagic's picture

F@#k, not one comment on how to save our system and ourselves!! Are you saying we are done and there is no solution? Blood thirsty f@#kers!

Fri, 05/07/2010 - 20:06 | 337474 Rider
Rider's picture

Amen, thats the way to go.

Worry, do not. All credit scores will be reset in 2012 when no "worthy" creditors are left. Just like it happened after other crisis.

Fri, 05/07/2010 - 22:39 | 337595 chumbawamba
chumbawamba's picture

Good job, brother.  Like the other guy said, get another card, max it out on physical gold and silver purchases, then just throw it away and wait for them to come asking about you.

When they come calling you out to play, get your foo on here:

It'll take at least 6 months for them to catch up to you at this point, longer if the economy deteriorates rapidly (i.e. longer to never...the trick is to outlast them).

I am Chumbawamba.

Fri, 05/07/2010 - 23:22 | 337633 Almost Solvent
Almost Solvent's picture

Steal from them before they rape you. Self defense!

Fri, 05/07/2010 - 23:30 | 337641 Janice
Janice's picture


I am not a guy.....not yet.  Chastity Bono is now there may be hope...but I no like getting what he/she gets....I prefer the outie, not the innie. 

Fri, 05/07/2010 - 18:54 | 337383 Implicit simplicit
Implicit simplicit's picture

Seriously, I'm hoping gold comes in some when the market has its next big down day. Probably won't happen for a bit, but ya never know.

Have you been collecting for a while?

Fri, 05/07/2010 - 19:04 | 337391 SilverIsKing
SilverIsKing's picture

I started buying gold when it was just below $800 and silver in the $10-$13 range.

Now that the cat's sort of out of the bag, i.e. currencies are blowing up and more and more people are catching on, I'm trying to figure out the catalyst that will bring the price of gold down and it's hard to come up with something.  The deleveraging process may do it when something big fails and everything comes crashing down but you'll have to act quickly in that event.  I don't think the deflation argument or fake IMF sales will do the trick.  The world is burning and there's no stopping it.

Good luck.

Fri, 05/07/2010 - 20:39 | 337498 Bananamerican
Bananamerican's picture

"Otherwise, things may be a little rough for the great declining American civilization"



Fri, 05/07/2010 - 18:58 | 337386 Henry Chinaski
Henry Chinaski's picture

Gold up 1.3±%, GLD down 0.2±% today.

Fri, 05/07/2010 - 19:33 | 337423 tmosley
tmosley's picture

What is your source on gold price?

Sat, 05/08/2010 - 00:33 | 337690 RockyRacoon
RockyRacoon's picture

That does NOT mean you should buy gold/silver there.  It is a place to start pricing the market.

This (above) will tell you prices in the small lot market.

Sat, 05/08/2010 - 08:24 | 337816 1TAAT
1TAAT's picture

Use EBAY for price, but becareful. ALot of fake coins on there. Don't buy anything from China.

Sat, 05/08/2010 - 10:38 | 337893 tmosley
tmosley's picture

The thing about eBay is that they have systematic price distortions that have been created by the cashback offer.  I'm not sure that you can use ebay gold prices as a market indicator for that reason.

I have been using kitco for spot prices for years, and yes, you are correct, never order from them because they are awful.  My first experience with gold was buying in one of their gold pools, some years ago, before I knew the dangers.  Made quite a bit of money, but now I'm all about physical accumulation.

Sat, 05/08/2010 - 01:12 | 337711 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

misplaced post

Sat, 05/08/2010 - 02:29 | 337724 Hansel
Hansel's picture

US gold coin sales surge as investors flee risk - Reuters

...On Friday, the U.S. Mint said sales of the most popular American Eagle one-ounce gold coins totaled 41,500 ounces so far in the first week of May, compared to 60,500 ounces in the entire month of April.


Fri, 05/07/2010 - 18:04 | 337305 Fraud-Esq
Fraud-Esq's picture

HOW does the UK's debt trouble stay out of US news. It's always Spain, Portugal, Greece and Italy. I am amazed the UK gets little play.

Fri, 05/07/2010 - 18:06 | 337311 AnAnonymous
AnAnonymous's picture

Eurozone is bigger on consumption. Eurozone falling apart, more space freed for last man standing.

Fri, 05/07/2010 - 18:20 | 337324 wang
wang's picture

you are a ZH reader and then ask such a question???


Having said that check out Brian Williams, Anchor of NBC Nightly News on Letterman last night, Williams must have had his White House issued electronic taser collar removed  as he declared the world has no money, and he was dead serious.

Fri, 05/07/2010 - 18:29 | 337355 Fraud-Esq
Fraud-Esq's picture

I would never call ZH the news. "The news" is a pejorative for me. ZH is my secret source 

Fri, 05/07/2010 - 23:11 | 337624 i.knoknot
i.knoknot's picture

 call it my "financial porn" site.

i'm sure the Wall Street Puritans just can't stand the filth found on this site :^)


Fri, 05/07/2010 - 18:30 | 337356 faustian bargain
faustian bargain's picture

I can't believe I heard him say that on network TV.

Fri, 05/07/2010 - 22:38 | 337593 Alienated Serf
Alienated Serf's picture

whoa. did i just see a network news anchor describing something that resembled the truth on network tv.

Fri, 05/07/2010 - 18:11 | 337314 Hughe Crapper
Hughe Crapper's picture

Yep, you figured it all out TD. Nice summary.

When the SHTF, don't say Tyler didn't warn you! ;)

ps: Just imagine, if the US is first before Japan. Epic thought...

Fri, 05/07/2010 - 18:10 | 337318 Janice
Janice's picture

I'm not sure that the typical American has the stomach for warfare ...... unless the cable t.v. gets cut off. 

Fri, 05/07/2010 - 18:14 | 337330 Rainman
Rainman's picture that's funny, J !! Rabbit ears and 5 channels might rescue millions of minds.

Fri, 05/07/2010 - 19:00 | 337388 Amish Hacker
Amish Hacker's picture

The eyes of the world are on America, and the eyes of America are watching television...

Fri, 05/07/2010 - 21:19 | 337538 w a l k - a w a y
w a l k - a w a y's picture

Beautifully put.

Fri, 05/07/2010 - 23:48 | 337662 A Nanny Moose
A Nanny Moose's picture


Sat, 05/08/2010 - 00:33 | 337692 Al Huxley
Al Huxley's picture

But a good part of American income seems to be being spent on guns and ammo (more than usual).

Fri, 05/07/2010 - 19:32 | 337419 cossack55
cossack55's picture

We were better off with three.  Only things anyone watched were Bananza, Lucy and real Disney.

Fri, 05/07/2010 - 23:50 | 337665 A Nanny Moose
A Nanny Moose's picture

Twilight Zone....but we don't need TV for that anymore. Life imitates art.

Fri, 05/07/2010 - 18:59 | 337387 Cow
Cow's picture

It wouldn't interrupt American Idol, would it?

I don't mind a war as long as it's not too inconvenient.

Sat, 05/08/2010 - 10:23 | 337880 jdrose1985
jdrose1985's picture

+1 Cow

Fri, 05/07/2010 - 20:45 | 337505 Bananamerican
Bananamerican's picture

"I'm not sure that the typical American has the stomach for warfare ...... "

why do you think we inported all those mexicans?

They some crazy head-chopping, acid dippin', 3rd world mofo's

Fri, 05/07/2010 - 18:16 | 337335 DoChenRollingBearing
DoChenRollingBearing's picture

Gordon_Gecko issued the last best alert to buy gold here at ZH a few weeks ago.

I think this WILL become clear to even the MSM, .gov, our neighbors and all others who have no clue when the next Greece happens.

Time to get prepared.  Looks like a catastrophic disintegration approaches.  Many will be hurt and full of woe. 

Get busy!

Fri, 05/07/2010 - 18:21 | 337344 Implicit simplicit
Implicit simplicit's picture

 It will be like I, Robot. The algos will start the all ending war. The bots will deduce that mankind will destroy itself, and them, if they don't take over the world, and destroy man. (and woman)




Fri, 05/07/2010 - 19:30 | 337418 Argos
Argos's picture

Everyone is forgetting about the game changing Katla volcano. 

Fri, 05/07/2010 - 19:33 | 337422 cossack55
cossack55's picture

I recommend a preemptive nuclear strike on the volcano, after we nuke the oil blowhole, of course.

Sat, 05/08/2010 - 00:35 | 337695 Al Huxley
Al Huxley's picture

Media has the attention span of a small, yappy dog.  General public maybe as well, I'm not sure.  If Katla erupts, there will be some very serious problems to deal with globally, and nobody is ready.

Sat, 05/08/2010 - 17:48 | 338335 snowball777
snowball777's picture

Think of the Witchy volcano as a hedge against global warming.

Fri, 05/07/2010 - 23:27 | 337639 Alienated Serf
Alienated Serf's picture

War Games

Fri, 05/07/2010 - 18:24 | 337348 Juggernaut Nihilism
Juggernaut Nihilism's picture

So can we monitor when the Treasury has large upcoming redemptions?  Should be a good indicator to short the equity markets.

Fri, 05/07/2010 - 18:36 | 337362 perchprism
perchprism's picture


Barzini's dead.  So is Phillip Tattaglia---Moe Greene---Strachi---Cuneo----today we settle all Family Business.  So don't tell me you're innocent.  C'mon...admit it---you bought that 4-wheeler on credit, didnchu? Didnchu?!!!

Fri, 05/07/2010 - 18:36 | 337367 Problem Is
Problem Is's picture

"Richard Feynman would not joke about."

Richard Feynman would stand on his head and urinate to prove to you the Fed yield curve does not function on the basis of gravity... nor your bladder...

However, if you were a stacked physics major with gravity defying tits... Feynman was likely to have used you as an art model...

Fri, 05/07/2010 - 18:44 | 337376 Mitchman
Mitchman's picture


Fri, 05/07/2010 - 18:56 | 337385 Henry Chinaski
Henry Chinaski's picture

TD's insights are scary smart. It's a wonder he doesn't work for the dark side.

Fri, 05/07/2010 - 19:05 | 337392 Gimp
Gimp's picture

Yes War will probably be the final outcome. I pity the next third world backward nation we start bombing from the air, sneaking  cruise missiles into and finally assaults by the marines and air cav. 

The ultimate final distraction from the PONZI Masters.


Fri, 05/07/2010 - 22:40 | 337596 Alienated Serf
Alienated Serf's picture

we are gonna be thrid world after the war.

Sat, 05/08/2010 - 13:05 | 338026 Cpl Hicks
Cpl Hicks's picture

The only good Thrid is a dead Thrid.

They're just f***ing insects!

Fri, 05/07/2010 - 19:07 | 337397 Instant Karma
Instant Karma's picture

"Already, we are seeing that CDS traders are massively betting on a collapse of the UK as the next bastion of sovereign spending lunacy. And when the UK goes, Germany is next, shortly to be followed by Japan and the US. At that point the only buyer of US debt will be the US itself. Which will lead to the final outcome of massive consumer deflation as economic collapse finally strikes home, coupled with asset price hyperinflation, as a gallon of oil hits $10 (and helping the Dow hit 36,000)."


I don't follow. Can't see Germany, Japan, or the US having bond market problems just yet. Massive consumer deflation? Economic collapse? Hyperinflation? Dow 36000? All low probability events.

Fri, 05/07/2010 - 19:39 | 337429 Implicit simplicit
Implicit simplicit's picture

I'd like 2c dow 3600 1st:>)

Fri, 05/07/2010 - 19:42 | 337437 tmosley
tmosley's picture

Can I have a loan then?

I've got a great credit score, but I've maxed out my $220,000 credit line, am underwater on my mortgage with a 5,000,000 balloon payment due next month.  Oh, and I only make $200,000 a year.

Also, I may be guilty of passing bad checks (even though I always replace them with new, "good" ones), and passing phony IOUs.

Fri, 05/07/2010 - 19:51 | 337458 Implicit simplicit
Implicit simplicit's picture

A loan? Forget that. You have excellent credentials for a job at the fed!

Fri, 05/07/2010 - 23:25 | 337637 Almost Solvent
Almost Solvent's picture

That balloon payment is bigger than that fat blueberry Wonka girl!

Sweet, bend that bank over!

Fri, 05/07/2010 - 19:52 | 337459 faustian bargain
faustian bargain's picture

The future will be determined by low probability events.

Fri, 05/07/2010 - 19:14 | 337404 Carl Marks
Carl Marks's picture


In time of war the loudest patriots are the greatest profiteers.

Fri, 05/07/2010 - 19:14 | 337405 Fix It Again Timmy
Fix It Again Timmy's picture

"How can ya have your pudd'n, if ya don't eat your meat?"

Fri, 05/07/2010 - 19:26 | 337414 Sisyphus
Sisyphus's picture

"You! Yes, you behind the bikesheds, stand still laddy!"

Fri, 05/07/2010 - 23:33 | 337465 Janice
Janice's picture

"I like to go swimming with bow-legged men and swim between their legs"  Oh ~ wrong song.

Fri, 05/07/2010 - 19:45 | 337446 bigkahuna
bigkahuna's picture

I have been trying to tell as many people as I can about this problem approaching of not being able to roll over treasuries. People are really not understanding how this impacts them. Our here and now culture is going to get us in big trouble. When the failure to roll over gets to here and now--there are going to be a vast majority of people who did not see this coming. I just hope we don't end up with a country full of brain eating zombies.

Fri, 05/07/2010 - 19:54 | 337462 faustian bargain
faustian bargain's picture

"The problem with a country full of brain eating zombies is, eventually you run out of other people's brains."

Fri, 05/07/2010 - 20:53 | 337515 akak
akak's picture

Margaret Thatcher, eat your heart out!

(Or your brain.)

Fri, 05/07/2010 - 21:50 | 337561 cougar_w
cougar_w's picture

Yer on a roll tonight.

Fri, 05/07/2010 - 22:40 | 337597 faustian bargain
faustian bargain's picture

Tears of a clown, coug. Tears of a clown.

Sat, 05/08/2010 - 02:30 | 337725 Hephasteus
Hephasteus's picture

I've got a really huge project. Finishing the project isn't important. What's important is that I'm in charge during the whole project and I pay myself well. The project has huge needs of talent and resources. Would you mind sharing your thoughts and resources on the project. It will benefit all of mankind once it's done and make the world a better place if you want to believe that. Ok not really it will just make a sociopathic destroy the competition monopoly.

But anyway want to kick in and let me zombie your brains? Because it's tradition. Were not just going to build a stupid pyramid to bury me in this time. I've got bigger better ideas now a days.


Fri, 05/07/2010 - 23:29 | 337643 Almost Solvent
Almost Solvent's picture

Virus Zombies are way more scary than dead Zombies.

28 days later (after market crashes) people will be no better than Zombies.

Sat, 05/08/2010 - 00:38 | 337697 Al Huxley
Al Huxley's picture

First all of Europe defaults, then maybe Japan, then people 'suddenly' notice the elephant in the living room that is the US deficit.

Fri, 05/07/2010 - 20:05 | 337473 GlassHammer
GlassHammer's picture

I just told my roommate that when I see the monthly Treasury redemption exceed $650 billion I am getting $10k of gold coins. 

Fri, 05/07/2010 - 20:29 | 337490 Janice
Janice's picture

1,270.25 per

Fri, 05/07/2010 - 20:47 | 337507 Nikki
Nikki's picture

Mr. Hammer. Might I suggest you buy those coins now while they are $2000 ?. Jus sayin...

Fri, 05/07/2010 - 23:41 | 337654 hack3434
hack3434's picture

I bought 100oz silver about 4 months ago and when it arrived, the box was empty...I believe it was my mailman but no need to point fingers since it was insured...Apmex took care of everything but BEWARE that once the price gets going our dirty third world mail system is going to get a whole lot dirtier 

Fri, 05/07/2010 - 23:46 | 337659 Janice
Janice's picture

Wow, that's the first I've heard of that.  I love APMEX and have reccommended them to others.  It's good to know that they stand behind their stuff when there is a problem.  I've never had an issue.

Sat, 05/08/2010 - 00:08 | 337673 hack3434
hack3434's picture

Same here but getting the physical from point A to point B (for me at least) is definitely not the way it used to be. I wont sleep if/when I buy 1k+oz

Sat, 05/08/2010 - 01:01 | 337708 Janice
Janice's picture

Interesting.  I haven't bought in 6+ months, but was certainly eyeing those 100oz silver bars.  Waiting for a drop, but may have missed out....had to pay taxes with my extra funny money.

Sat, 05/08/2010 - 09:02 | 337831 Crime of the Century
Crime of the Century's picture

I bought 100oz silver about 4 months ago and when it arrived, the box was empty...I believe it was my mailman but no need to point fingers since it was insured...Apmex took care of everything but BEWARE that once the price gets going our dirty third world mail system is going to get a whole lot dirtier

APMEX=USPS, Bullion Direct=FedEx

I am not surprised that APMEX stood behind the transaction, they are good people, but shipping cost between the two is very competitive. APMEX has a better selection, especially in the assayed gram weight product.

Sat, 05/08/2010 - 09:28 | 337849 RobD
RobD's picture

I made a medium size purchase from APMEX and they shipped it UPS. Small purchased came USPS.

Sat, 05/08/2010 - 10:45 | 337895 tmosley
tmosley's picture

What to you consider medium sized?  I had a 60 pound shipment of bullion come from them and it came by USPS.

I told the post office lady that it was lead lining for laboratory equipment ;)

Fri, 05/07/2010 - 20:53 | 337516 fuu
fuu's picture

FTA: "A few days ago we reported, quite stunned, that the US Treasury had redeemed nearly $600 billion in Bills in the month of April."


Maybe grab $9230.77 worth or about 7.64 oz's at today's spot close. $50 Billion is your average Monday 13 week and 26 week issues.

Sat, 05/08/2010 - 08:18 | 337793 JethroBodien
JethroBodien's picture

I'm not entirely convinced gold will have any more value than increasingly worthless FIAT currencies when things collapse.  So what you may ask would replace FIAT money.   I think there is the potential for a cashless system that is purely digital since this would certainly mitigate a lot of problems like fraud, tax evasion, money laundering, bank robberies and so on.  If things get bad enough, in the not to distant future, we may get to the point where people are actually receptive to this.

Of course the detractors would argue this would put too much control in the hands of the few but when weighed agaisnt the benefits I fear most people would support it.

What is playing out in Eurpose now is analogus to what happened in the United States back in early 2009.  Its simply a back door bail out of the entire banking system with public funds. 

In reality money is debt and people are living in a fantasy world if they think that debt can ever be repaid.  Most of the western world is getting very close to not being able to service that debt.  i.e Greece, Portugal, Spain, Italy, Ireland, United States and so on.

Buckle up becuase things are about to get bumpy.


Sat, 05/08/2010 - 09:09 | 337835 Crime of the Century
Crime of the Century's picture

Oh, that will be the story alright. You want it on the hand or the forehead? Fries with that?

PS - you said it will mitigate fraud and bank robberies? Only from the outside, sucka...

Fri, 05/07/2010 - 20:15 | 337479 43 Steelie
43 Steelie's picture

Most Used Phrase of 2007 - Moral Hazard

Most Used Phrase of 2008 - Oh Fuck

Most Used Phrase of 2009 - Economic "Recovery"

Most Used Phrase of 2010 - Cautiously Optimistic

Most Used Phrase of 2011 - Stagflation

Most Used Phrase of 2012 - Crack-Up Boom

Fri, 05/07/2010 - 20:49 | 337510 Buck Johnson
Buck Johnson's picture

Stagflation is coming, stagflation is coming.

Fri, 05/07/2010 - 20:52 | 337511 Day_Of_The_Tentacle
Day_Of_The_Tentacle's picture

Fraud-esq asks "HOW does the UK's debt trouble stay out of US news. It's always Spain, Portugal, Greece and Italy."

Because the US and UK are buddy-buddies in the Club of Imperialists for Quantitative Easing. Continental Europe has so far declined the offer for full membership of said club, and they even have the audacity to frown upon the ways of the US in the process.

Why? Because in a not too distant past, Europe itself was full member of that same Club, and the subscription fee was paid in large quantities of blood - and not yet quite forgotten. Back then the British and the Americans were our saviors. Without them decades of dark ages would have engulfed our shores.

Now it looks more like we have become adversaries. When did this happen? How?

Is it because of European Socialist Imperialism and Anglo-American Corporatist Imperialism and Chinese Communist Imperialism that we now begin to see the contours of war on the horizon again?

Gimp says "The ultimate final distraction from the PONZI Masters."

And are we just to shrug in resignation over such a revolting possibility?.

I say no.

The imperialists have been peddling enemies at the street corners for some time now, and they are probably going to scream louder and louder as events unfold.

It is however for us to decide, if we are going to buy, what they try to sell. We DO have a choice on the individual level!

I have been fortunate enough to work and travel in several countries, and what strikes me with profound joy every time is that amid all the cultural variation, all the people that I have meet turn out to be good people.

All the biased stories I have read and seen on TV about other nationalities are rubbish. The governments and their rhetoric may be ugly, but that has so far not affected my impression of the people. They have been thoroughly decent, helpful and reasonably polite – no matter if they were European, American, Arab or Asian.

When the powerbrokers start peddling war, you can choose to pause, remember your friends in other countries and seek information elsewhere. You can choose to encourage your children to travel, learn other languages and make personal friends abroad. You can choose not to join the heated chants of the puppeteer orchestrated Sheople Choir of pre-programmed outrage. You can choose not to volunteer as cannon feed, and there will be no war between nations, because they will sure as hell not get into uniform to pull the trigger themselves.

Sorry for lack of brevity. Rant off.

Fri, 05/07/2010 - 20:55 | 337521 fuu
fuu's picture


Fri, 05/07/2010 - 21:53 | 337562 cougar_w
cougar_w's picture

Brevity would not have served nearly so well.

Fri, 05/07/2010 - 23:04 | 337617 DoChenRollingBearing
DoChenRollingBearing's picture

Day-of, I have found the same.  I've traveled a fair amount to various places and found people everywhere are typically friendly if you are to them.

War is the worst.  Do not attack.  If they attack you, well, kill them.

Sat, 05/08/2010 - 09:14 | 337840 Crime of the Century
Crime of the Century's picture

Satan laughing spreads his wings...

War Pigs -

Sat, 05/08/2010 - 09:43 | 337856 SofaPapa
SofaPapa's picture

Sadly, there are enough people who do not have the direct experience you have, who will believe the lies they receive on the "Big Brother Box" each evening.  They will people the war when called on to do so.  It's such a waste.

Fri, 05/07/2010 - 20:49 | 337512 Buck Johnson
Buck Johnson's picture

Or better yet Hyperstagflation is coming, Hyperstagflation is coming.

Fri, 05/07/2010 - 20:54 | 337519 cbaba
cbaba's picture

Me thinks at the end of tide hitting US Bond markets, War will not be the answer, it requires massive amounts of money to finance which will be wiped out by hyperinflation.


Fri, 05/07/2010 - 21:55 | 337564 cougar_w
cougar_w's picture

Civil war, not so much. If war is the answer.

Fri, 05/07/2010 - 23:33 | 337646 Almost Solvent
Almost Solvent's picture

Fat fingers can launch thermonuclear warheads from anywhere.

Or, how We learned to love the bomb.

Fri, 05/07/2010 - 21:25 | 337542 Bruce Krasting
Bruce Krasting's picture

Just a dumb question. Where is the money coming from? Tax receipts? Did they overfund expenditures?


Sat, 05/08/2010 - 00:41 | 337702 Al Huxley
Al Huxley's picture

Household Bruce, Household.  I explained it earlier, middle Americans are using their 'savings'  to buy treasury debt, and then spending the interest income on ipods, etc.  Hence the boom in retail, and the perpetual/infinite demand for crappy US paper.

Sat, 05/08/2010 - 09:26 | 337848 Crime of the Century
Crime of the Century's picture

What, the Caribbean is tapped out already?

Fri, 05/07/2010 - 21:26 | 337543 35Pete
35Pete's picture

Look folks, unemployment is always on topic and I just had to post this over here to give you guys a hint at what kind of ignorance is out there. This is a post from a poster at politics website that I pop into once in a while. Yes, the guy is being totally serious. 

I just read something interesting.

The only reason the unemployment rose (despite a huge rise in job offerings) is because people who were comfortable being a housewife/husband resumed their searches for work.


A bunch of jobs were added...more people re-resumed their searches for employment than we employed...

And the unemployment went up.

Whatever...there's still more Americans working now than there were a month ago...good news.

Sat, 05/08/2010 - 00:43 | 337703 Al Huxley
Al Huxley's picture

Wow!  Well that's just great news isn't it.  This economic boom is so gosh-darned good that people who gave up long ago are now streaming back into the market.  Ain't it grand?  I wonder if the past couple of days might put a cork in the bullshit being spewed by MSM at some point in the near future.

Sat, 05/08/2010 - 02:00 | 337722 Burnbright
Burnbright's picture

Yep, I loved all the double speak articles saying that the jobs numbers were good and that more people were employed even though the jobless rate increased. What the fuck sense does that make. And what was it like over 100k "jobs" were from the birth death model.

How much you want to bet we get a nominal increase in jobs from the birth death model next month and we still increase in unemployment, lets say 10.2% and on top of all that the MSM will trumpet it as good news.

Sat, 05/08/2010 - 09:23 | 337844 Crime of the Century
Crime of the Century's picture

I'll bet seeing Romer's face on teevee gives him a warm and fuzzy too..

"Good Morning, class!"

"Good Morning Miss Romer!"

Sat, 05/08/2010 - 12:40 | 338000 spekulatn
spekulatn's picture

Prey for the predator. One less dummy in the food chain.

P.S. Who rang the bell announcing funemployment is over? Oh never mind... benies are running dry. Got it. My bad. Back to work or no soup for you!

Sat, 05/08/2010 - 14:09 | 338130 Common_Cents22
Common_Cents22's picture

How many people ran out of unemployment benefits?

Fri, 05/07/2010 - 21:27 | 337545 Caviar Emptor
Caviar Emptor's picture

All the world's a fool dancing on the edge of a cliff. The empire is crumbling. But the end is rarely sudden or clean and it never goes as anyone anticipated. 

Fri, 05/07/2010 - 21:49 | 337560 wang
wang's picture

ZH got a nice plug earlier today by Matt Miller of Bloomberg TV - referred to the audio of the Chicago Pits from yesterday and told viewers to go to ZH for the full monte -  (now if CNBS had given the plug the ZH site would not have crashed)

Sat, 05/08/2010 - 05:20 | 337789 Ned Zeppelin
Ned Zeppelin's picture

ditto on dat - heard it while commuting home and smiled at the mention" " . . . this comes to us from . . . zero hedge . . "

Fri, 05/07/2010 - 22:00 | 337568 Caviar Emptor
Caviar Emptor's picture

Not Stagflation. Back in the 70s the lay of the land was totally different. Growth was better than now but it was Stag compared with the 50s. Inflation was demand driven and supply was constrained. 

Now we're in a deflationary environment with low aggregate demand and huge overcapacity on the supply side. There's no wage/income inflation. Despite ZIRP and QE. Real GDP has re-set to a lower level. 

We're going to get the Double Whammy. Deflation is hitting incomes, real assets and (mark these words) retirement assets. Individual net worths will drop in real terms. Meanwhile we're experiencing the earliest stages of cost of living inflation in raw materials, energy, healthcare, insurance and the cost of doing business. Soon tax increases will hit us every which way: municipalities and states are broke. They'll raise property taxes, water taxes, tolls, inspection fees, liquor taxes. They'll levy new ones because they can't even pay for prison guards, sanitation, cops, teachers and judges. It will get harder for them to borrow since they'll be competing with massive Treasury debt and corporate debt. We may get VAT, we'll certainly get surreptitious federal tax increases. Internet tax? Closer than you think. 

So this world is not 70s style stagflation. It's deflation and inflation chanelling through different sectors simultaneously and horrifically. The numbers will merely cancel out and we'll keep getting reports that CPI, PPI and core PCE are near zero or "below Fed targets". Meanwhile the US consumer will be getting drawn and quartered.

Fri, 05/07/2010 - 23:12 | 337625 Janice
Janice's picture

Agreed ~ My thoughts exactly!  It is already happening.

Fri, 05/07/2010 - 22:08 | 337574 Mark Beck
Mark Beck's picture

I would like to mention that, the benchmark 10Y is now a very poor indication of the control on rates.

Fundementally it is broken but still used because of its legacy. Its use is predicated on a horizon that no longer exits. What would be more useful is some type of 1Y benchmark. At least it would match up better with the real interest in Ts.

The story is how the FED will make the market in T bonds. The funneling of money and the backdoor attempts to control rates, will be ongoing with the FED. This is the real story, because when these measures fail the achilles heel of bond instruments will be felt. That is, when the sovereign bond market loses trust the only buyers will be those controlled by the FED and the other central banks. At some point the central banks will break ranks, and the market will be flooded with Ts on the long end. Just think what would happen if China decides to step up liquidation of its T bonds.

I really wish I had something upbeat to say about this stuff. But, the pressure on T rates can come very switfly in an environmnet of lost confidence. It is just the enormity of what will have to exchange hands, of what real capital will have to be found, because you cannot influence a bond market by debasing what you sell.

Mark Beck

Fri, 05/07/2010 - 23:00 | 337612 trav7777
trav7777's picture

Couple of points:

one, what you say is untrue.  The Fed has always been the market maker for UST auctions.  Second, the Fed can purchase the ENTIRE auction and directly control the nominal price of the issue.  What it CANNOT do is control the forex exchange on the USD.  That is the one thing it has limited power to effect.

But, there will not be a price collapse in bonds given the Fed's power to indirectly monetize.  We also won't pay real money or even real interest rates.  Bonds can stay near par even while oil goes to $500/bbl. 

Obviously, we are caught between the devil and the deep blue sea here.  If the Fed does *not* monetize, the sovereign collapses and there goes your dollar.

Who is going to respect the currency of a central bank in an insolvent State?

Fri, 05/07/2010 - 23:36 | 337647 Almost Solvent
Almost Solvent's picture

Civil society ends LONG before oil gets to $500 Bhopal

Sat, 05/08/2010 - 01:56 | 337719 Mark Beck
Mark Beck's picture

Yes, but the market I was referring to was the market outside of the FED and Primaries directly. That is,  the FED's ability to manipulate outside buyers, by whatever means through a conversion between other central banks. The exact coversion, currency or other securities, either owned or loaned, will depend on the needs of the counter party. I refer to this as buying slack in the system. A certain amount of buy momentum in order to produce an effective overall outcome. It just depends on what the FED is willing to trade.

I guess I would see the whole purchase of issuance to be difficult to hide. Even when the $300B long term buy, which turned into spot buying to strategically effect rates, their participation was substantial, but for complete domination of the auction perhaps difficult to manage as per the balance sheet for any length of time. There is just too much to buy. Also,the SOMA amounts lately seem to be relatively small, in what could be pooled to assist in clearly dominating auctions.

To me a bond collapse would be one of rates (spreads) and not a premium or discount, but the point I trying to make is that the change in interest rates is only applicatble when you have buyers outside the FED and its many channels, and these buyers have enough USD to make your huge sale of debt viable.

Also, at the point where the FED must QE in the open in order to have positive cash flow for the treasury, we will have two effects. First is a loss in outside buyers (once the slack is gone), and next is an increase in rates. From a time line standpoint, when the FED is tasked with dominating the T buys through QE, I think we will see capital flee the US. This will lead to a churn highly dependent upon rates (very rate sensitive). Which will also reduce the attractiveness of Ts, overall US credit rating, due to interest paid.

I guess were we differ is, I do not think the FED will try and protect the USD. To me the sequence of events is to QE to pay the bills while debasing the currency.

Mark Beck

Fri, 05/07/2010 - 22:20 | 337581 waterdog
waterdog's picture

Stop sugar coating it Mr. Durden. It is worse than you report and you know the day and time. When is it going to happen, and how will you tell us so we will be the first to know?


Fri, 05/07/2010 - 22:48 | 337603 faustian bargain
faustian bargain's picture

One if by land, two if by sea.

Fri, 05/07/2010 - 22:56 | 337609 waterdog
waterdog's picture


Fri, 05/07/2010 - 22:23 | 337584 George Costanza
George Costanza's picture

The Europeans have learned from history.  They knew that a war cannot be won in Iraq, so they did not join the war (except UK). For them, it was the right decision to NOT follow the US lead.

Now in recession, bank collapse, sovereign collapse, US is pressuring them to employ Quantitative Easing - like we did.   They are again NOT following us.  

I admire them for standing their ground.  Someone has to stop the bail out insanity, or else it will eventually make it's way to US sovereign debt.

Fri, 05/07/2010 - 23:04 | 337616 trav7777
trav7777's picture

You're joking, right?

France has participated in Afghanistan to the point of conducting joint operations off of the de Gaulle in the Indian Ocean with one of our CVNs.  Their Rafales and our Rhinos swapped decks.

France wanted in on Iraq before Busch snubbed them.  Chirac thought it would be valuable to get his troops real combat experience.

Fri, 05/07/2010 - 23:41 | 337651 Almost Solvent
Almost Solvent's picture

Vietnam Redux

Sat, 05/08/2010 - 12:25 | 337980 Crime of the Century
Crime of the Century's picture

Indochine Retourner

Sat, 05/08/2010 - 10:58 | 337903 Day_Of_The_Tentacle
Day_Of_The_Tentacle's picture

First of all – It is very important to distinguish between the operation in Afghanistan and the operation in Iraq. Next, I have tried to get hold of some more information. 

Afghanistan Coalition:

Iraq Coalition:

@ George. Plenty of European countries joined the operations in both Afghanistan and Iraq for a shorter or longer duration.

@ Trav. Where did you get the information about France wanted to get in and got snubbed?. It would appear, that France was in direct opposition to the US regarding when it was the right time to enter Iraq.

Most of us got hit deeply in the pit of the stomach when 9/11 happened. In the summer of 2004, I was standing at Ground Zero looking at the construction site and the memorial to the more than 3000 people, who perished that day.  I noticed some melted asphalt at the curb of the road, and I had to cry. It kinda just sunk in at that point.

I had no objection whatsoever to the desire to pursue the perpetrators. I did not like the way the American President spoke in general with his religious undertones and categorical rhetoric, but who am I to judge on the format, when the essence was that the US has been attacked. In NATO we have pledged to step in and help, if an ally is attacked on his own territory. Later, of course, that picture got horribly murky as the many still unanswered questions about 9/11 began to surface.

Iraq was an entirely different story. I think that many Continental Europeans were profoundly sceptical about the eager enthusiasm that was displayed on the part of US and UK to go into Iraq, before the weapons inspections had been concluded.

Personally, I had pretty much no faith in the integrity of the President, but I did put a lot of weight to the words of Colin Powell in the UN. I also put a lot of weight on the fact that Saddam was a brutal man, who had used chemical weapons against a minority in his own country. Mr. Powell later retracted his words, and the picture here got murky as well.

With all the disagreement about legitimacy and doubt about the correct timing of the intervention in Iraq, you can ask why DID many European countries put aside the internal disputes and join the US and the UK in Iraq.

I think that there are two answers to that question.

1) You have seen first hand exactly how efficient the EU is at making joint decisions, and any smaller European country is probably reluctant to rely solely on the EU to provide security in case of new worldwide turmoil.

2) I think the most likely answer is, that we took on an emotional debt back in 1940-1945, and that debt had to be repaid.

Fri, 05/07/2010 - 22:28 | 337587 DollrZar
DollrZar's picture

I trade cable for a living, so I have to pay attention to the U>K. The one thing that no one has talked about, which I think will be the next major thing that everyone will look at, is debt maturity. U>K has longest maturity of anyone, which will end up being a saving grace. Don't count out the Brits, they made these markets. Just sayin.

Fri, 05/07/2010 - 22:28 | 337588 chumbawamba
chumbawamba's picture

There is no such thing as "price hyperinflation".  Hyperinflation applies to a currency only and always.

I am Chumbawamba.

Fri, 05/07/2010 - 22:38 | 337594 Sespian
Sespian's picture

"Double the holdings? It is definitely impossible."

"The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world.  The world does not have so much money to buy more US Treasuries."

-Zhu Min, deputy governor of the People's Bank of China

Fri, 05/07/2010 - 22:49 | 337604 Alienated Serf
Alienated Serf's picture

exaclty!!  when china does not have dollars to send right back, the printing press goes to terminal velocity.

Fri, 05/07/2010 - 22:42 | 337600 waterdog
waterdog's picture

The next war will be in the streets of America. While our government saviors will be looking for camel riders, home grown hate groups will be attacking infrastructure. Osama does not understand that every day in this country thousands of women and children are beaten to death by fathers, husbands and boyfriends. He truly believes that killing a few New Yorkers and tourist makes a statement in this country.

He is a camel rider, always will be.

The next war will not be on foreign soil. The next war will be in America. All military commanders will tell you, you cannot defeat an enemy on its own soil.

The oligarchy has a problem. That problem is that one day, their names will be public information.


Fri, 05/07/2010 - 22:52 | 337606 trav7777
trav7777's picture

I see Japan going before Germany.

If they don't absolutely pour in liquidity the yen carry trade unwind will crush them.  As soon as the stresses of the economic peak become apparent and "developing" market profitability begins to flag, the yen goes vertical and Japan must default.

They are in the worst shape of all in terms of debt.  All it takes is for people to stop borrowing yen and investing that hot money into wherever...we've already gone through Asia and South America with this carry and now into Africa.  With the oil peak having come and gone, and the rising real cost of energy, the aggregate profitability of the developing world will decline faster than it did for the earlier economies.

Economic "development" is a lot like oil development; low hanging fruit first, less profitable higher fruit next.  Once they start trying to develop Africa, you know the end is at hand.

Sat, 05/08/2010 - 11:37 | 337935 jdrose1985
jdrose1985's picture

Ernst & Young's African Dream

Global accounting giant Ernst & Young says it expects rapid business growth in Africa with it's initiative to expand the firm's practices across the continent

Edit: source Reinhardt's Journal

Fri, 05/07/2010 - 22:59 | 337611 bernorange
bernorange's picture

Am I understanding correctly that the Fed is backed into a corner with their DV01 ( ) as far as being able to buy Treasuries?

Fri, 05/07/2010 - 23:50 | 337666 Madcow
Madcow's picture

could someone please explain what a "reverse mortgage" is?  where does the capital come from?

Sat, 05/08/2010 - 00:31 | 337689 Janice
Janice's picture

HEY! I know this one!  A reverse mortgage occurs when you own your home AND you contact a lending source AND they send you monthly opposed to a mortgage where YOU send the payments into the lending source. 

Interest and fees apply.  The source of funding is from investors or if you are a TBTF Bank, created out of thin air by the FED and lent to you at 0% so that you can charge some poor sap 7% -12%, plus fees and closing costs. 

The same people that got rich in the subprime mortgage situation, get rich again off a different poor (elderly) American population.  Pretend & Extend while taking more US citizens to the outhouse.

Sat, 05/08/2010 - 05:26 | 337792 Ned Zeppelin
Ned Zeppelin's picture

Correct me if I am wrong but all reverse mortgages are for seniors and are basically FHA insured loans.

Sat, 05/08/2010 - 09:54 | 337864 Janice
Janice's picture

Not sure if they are FHA, but my neighbor did one.  I begged him not to do it.    However, the cost of food, utilities & property taxes pushed him over the edge.  The social security check was not enough to pay the bills.  He said he was about $100 short each month.  I check in on him often, he doesn't go to wal-mart every day, he doesn't blow money.  IMHO...This is where we are all headed as noted earlier in this thread.  Income (government subsidies) will not be sufficient to cover basic expenses, causing liquidation of hard & real assets, slow drain, wealth destruction.  I just think it's in the cards.

Sat, 05/08/2010 - 00:03 | 337669 anarkst
anarkst's picture

The truly interesting thing is that infinite number of events to play out will result in an outcome completely incalculable.  Although war appears inevitable (it's what we being humans do), the particulars can not be known in the least.  Having said that, my money will remain on the country with the

Sun, 05/09/2010 - 02:24 | 338795 Sespian
Sespian's picture

How EXTREMELY short sighted of you.  Try reading a history book.

Sat, 05/08/2010 - 00:10 | 337677 whatsinaname
whatsinaname's picture

A reverse mortgage is when the lender sticks something up the borrowers hind side and ....

Hence a "reverse" mortgage. You can fill in the dots !!

Sat, 05/08/2010 - 02:47 | 337736 Grand Supercycle
Grand Supercycle's picture


This was posted on May 1st - a week before the crash.

 '11,250 / 300 is an area of significant resistance and if this level can’t be breached it should signal the end of the March 2009 bear market rally - the weekly DOW chart shows an expanding wedge indicating a significant move is probable - this remains an overbought bear market rally and the uptrend could falter at any time - the VIX index continues to give bullish warnings which is bearish for equities - long term charts of key equity indexes continue to give bearish warnings and the March 2009 lows will be breached in my opinion - USD Index bullish warnings since 2009 on the weekly and monthly chart have not changed and further USD strength and thus EURO weakness is still expected '

Sat, 05/08/2010 - 04:07 | 337782 putbuyer
putbuyer's picture

Soon short selling will be banned. Our government is a bunch of shitheads pushing us into the shit storm. The drones will learn their mistakes when it is too late. At least I got my cabin now. Good luck all.

Sat, 05/08/2010 - 05:21 | 337790 Gordon_Gekko
Gordon_Gekko's picture

Good. It will allow this casino "market" to collapse faster.

Sat, 05/08/2010 - 05:23 | 337791 Gordon_Gekko
Gordon_Gekko's picture

It will all be over soon.

Sat, 05/08/2010 - 08:58 | 337828 jp
jp's picture

Deflation is very real and it is not made up. There is only one chart to prove that fact and it is going down.

Take Greece and the EU for example. Gasoline prices are a reflection of the dollar, as oil is traded in DOLLARS. What is a gal. of gas in the EU now? As the EU falls so will the cost of that gal. of gas. As fuel prices fall, all prices fall. Why? Distribution costs fall. Until prices at the pump come down, you will see protests in the streets. If and when they do come down, people will go back to work. If it costs you more to drive to work, than you make that day, why go in the first place. This is the lot of labor & the choices they must make.

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