Treasury Department

Tyler Durden's picture

The World's Most Profitable Hedge Fund Is About To Make The US Treasury's Life Much Easier





We know its not Paulson, Ackman, or SAC; is it Dalio's Bridgewater? No, the world's most profitable private entity that is in business to generate profits via speculation in financial markets is, drum roll please, the Federal Reserve. Stone & McCarthy (SMRA) estimates the Fed will make around $90bn profits in 2012. Of this around $87.5bn will be remitted to the US Treasury - a new record high (quite helpful when one is trying to avoid a debt ceiling using 'extraordinary measures' though we assume this is already penciled in due to its consistency). Since 1947 the Federal Reserve has paid the Treasury roundly $975 bln, about 1/3 of which has been paid over the past 6 years. In other words, the cumulative Federal deficit since 1947 has been reduced by nearly $1 trillion since 1947 due to the repatriation of Fed earnings to the Treasury Department. SMRA estimates that this profitability, thanks to the spread between SOMA coupon income and IOER will likely lift the Fed's profitability to around $120bn in 2013, but a 1% rise in yields would translate into a $275bn loss.

 
Tyler Durden's picture

Frontrunning: December 27





  • U.S. Family of Mao’s General Assimilates, Votes for Obama (Bloomberg)
  • Iron ore prices hit eight-month high (FT)... four months after plunging and crushing iron ore miners
  • Obama seeks 60 Senate votes for cliff deal (MarketWatch)
  • Need. Moar. InfinitQEeee: Japan PM adviser urges unlimited BOJ easing, higher price goal (Reuters)
  • Yen Touches 16-Month Low Versus Euro Before Japan CPI (BBG)
  • China consumers driving economic rebound (Reuters) - ot just year end window dressing to accompany the new Politburo
  • Rajaratnam agrees to pay $1.5 million disgorgement in SEC case (Reuters)
  • France should review 2013 deficit target with EU partners (Reuters)
  • Monti-led poll alliance takes shape (FT)
  • Bersani wants growth-oriented Europe (FT)
 
Tyler Durden's picture

Barack Is Back: The 2012 Season Of The Fiscal Cliff Soap Opera Is Finally Concluding





While the market will look with some last trace of hope to Obama's return from Hawaii to D.C. today, the reality is that even the mainstream media, which had so far gotten everything about the cliff spectacularly wrong (proving that sample polling and actual "predicting" are two very different things), is waking up and smelling the coffee. As Politico reports, "nearly all the major players in the fiscal cliff negotiations are starting to agree on one thing: A deal is virtually impossible before the New Year. Unlike the bank bailout in 2008, the tax deal in 2010 and the debt ceiling in 2011, the Senate almost certainly won’t swoop in and help sidestep a potential economic calamity, senior officials in both parties predicted on Wednesday. Hopes of a grand-bargain — to shave trillions of dollars off the deficit by cutting entitlement programs and raising revenue — are shattered. House Republicans already failed to pass their “Plan B” proposal. And now aides and senators say the White House’s smaller, fall-back plan floated last week is a non-starter among Republicans in Senate — much less the House. On top of that, the Treasury Department announced Wednesday that the nation would hit the debt limit on Dec. 31, and would then have to take “extraordinary measures” to avoid exhausting the government’s borrowing limit in the New Year."

 
Marc To Market's picture

Abenomics and other Drivers of Holiday Markets





The main feature in the foreign exchange market continues to be the yen’s weakness. This weakness, based on expectations that the new Japanese government will succeed in driving the dollar to JPY90 with a combination of more aggressive monetary and fiscal policy (“Abenomics), is offering support to the other currencies. The yen sales are a combination of momentum and carry strategies. There are two other forces in the market as well. First, the market is anticipating a further reduction in tail risks in Europe. Of course the large moves away from the abyss this year are clearly the doing of the ECB with its long-term repos and offer of (conditional) outright purchases.

 
Tyler Durden's picture

Frontrunning: December 20





  • IMF Demands Partial Default for Cyprus (Spiegel)
  • Boehner's 'Plan B' Gets Pushback (WSJ)
  • Beijing criticises US ‘political checks’ (FT)
  • White House Said to Tell Business Groups Talks Stall (BBG)
  • NYSE tries to get hitched again: IntercontinentalExchange in talks to buy NYSE (Reuters) -> N-Ice coming?
  • Greece faces ‘make or break’ year (FT)
  • Fed rejects idea of consensus forecasts, "maybe forever": Fisher (Reuters)
  • Rajoy Drives Spanish Revolution With Low-Cost Manufacture (BBG)
  • Italian Senate Set for Budget Vote Before Monti Resigns (BBG)
  • BOJ Loosens With Pledge to Review Inflation Objectives (BBG)
  • Bowing To Abe, BOJ To Review Price Goal (WSJ)
 
Tyler Durden's picture

Frontrunning: December 12





  • Here come the low margin products: Apple Tests Designs for TV (WSJ)
  • Obama and Republicans Trade Offers to Avert Fiscal Crisis (BBG)
  • Carney broaches dumping inflation target (FT)
  • Bernanke Critics Can’t Fight Bonds Showing No Inflation (BBG)
  • Corporate Taxes on Table in Cliff Talks (WSJ)
  • US business chiefs back tax rise (FT)
  • Greece Confident Bond Buyback Needed for Aid Succeeded (BBG)
  • New Faith in Europe's Banks (WSJ)
  • European Bank Sees Little Room for Rate Cuts (WSJ)
  • North Korea Claims Success in Rocket Launch (WSJ)
 
Tyler Durden's picture

Frontrunning: December 11





  • Fed Seen Pumping Up Assets to $4 Trillion in New Buying (BBG)
  • China New Loans Trail Forecasts in Sign of Slower Growth (BBG)
  • U.S. "fiscal cliff" talks picking up pace (Reuters)
  • Insider-Trading Probe Widens (WSJ)
  • U.K.'s Top Banker Sees Currency Risk (Hilsenrath)
  • Three Arrested in Libor Probe (WSJ)
  • Nine hurt as gunmen fire at Cairo protesters (Reuters)
  • Egyptian President Gives Army Police Powers Ahead of Vote (BBG)
  • Pax Americana ‘winding down’, says US report (FT)
  • Japan Polls Show LDP, Ally Set for Big Majority (DJ)
  • HSBC to pay record $1.9 billion U.S. fine in money laundering case (Reuters)
 
Tyler Durden's picture

Who Is In And Who Is Out In Obama's Second Term Cabinet





Tim Geithner's time is almost done, but the former NY Fed head is only one of very many whose position is expected to be replaced in Obama's second term (just so there is a non-continuous chain of command if and when the time comes for the people to demand an explanation for the state of the US economy from the talented Mr. Geithner). Who else is out and who is expected to be in? The following list attempts to cover all upcoming rotations at the top of the US cabinet. What is not attempted is a prediction of where in the private sector people such as Geithner will end up: that is considered largely self-explanatory.

 
Tyler Durden's picture

The Shocking Statistics Behind The Pentagon's Revolving Door 'Policy'





"High ranking generals and admirals earn their stars.  They earn their stripes.  Then, they earn their cash." Citizens for Responsibility and Ethics in Washington (CREW) has just released a fantastic new report on the revolving door between the Pentagon and the private sector, which raises serious concerns not only about ethics and corruption within the defense sector, but also raises issues of national security if retired generals are merely acting as mercenaries once they retire. As Mike Krieger notes: "When I first figured out the gigantic ponzi scheme, theft and fraud within the financial system... I never imagined the same thing goes on in virtually every sector of our corrupt crony capitalist economy... including the military." Absolutely incredible...

 
Tyler Durden's picture

Frontrunning: November 29





  • As this has been priced in since September 13, it should come as no surprise to anyone: Fed Stimulus Likely in 2013 (Hilsenrath)
  • Bowles Says Fiscal Cliff Deal Unlikely by End of Year (Bloomberg)
  • Argentina debt repayment order frozen (FT)
  • Obama Is Flexible on Highest Tax Rates (WSJ)... not really
  • Geithner deployed for fiscal cliff talks (FT)
  • Audit firms Deloitte and KPMG sued in HP's Autonomy acquisition (Reuters)
  • Euro-Zone Budget Proposal Is Unveiled (WSJ)
  • EU Nations Clash on Thresholds for Direct ECB Oversight (Bloomberg)
  • LDP leader Abe: BOJ must ease until inflation hits 3 percent (Reuters)
  • SNB’s Jordan Says High Swiss Franc Burdens Many Companies (Bloomberg)
  • EU to launch free trade negotiations with Japan: EU officials (Reuters)
 
Tyler Durden's picture

Frontrunning: November 28





  • Egypt protests continue in crisis over Mursi powers (Reuters)
  • Greece hires Deutsche, Morgan Stanley to run Greek voluntary debt buy back, sources say (Kathimerini)
  • Executives' Good Luck in Trading Own Stock (WSJ)
  • Hollande Presents Mittal Nationalization Among Site Options (Bloomberg)
  • Eurozone states face losses on Greek debt (FT)
  • Spain's rescued banks to shrink, slash jobs (Reuters)
  • EU Approves Spanish Banks' Restructuring Plans (WSJ)
  • At SAC, Portfolio Managers Are Treated Like Stocks (BBG)
  • China considers easing family planning rules (Reuters)
  • European Court to Rule Over ECB’s Secret Greek File (BusinessWeek)
  • And another top tick indicator: Asia Funds Buy London Offices in Bet Volatility Is Past (Bloomberg)
  • Harvard Doctor Turns Felon After Lure of Insider Trading (BBG)
  • Zucker Is Lead Candidate to Head CNN (WSJ) - it's not true until CNN misreports it
  • Iran "will press on with enrichment:" nuclear chief (Reuters)
 
Tyler Durden's picture

Frontrunning: November 27





  • OECD slashes 2013 growth forecast (FT)
  • Fiscal Cliff Compromise Elusive as Congress Returns (Bloomberg)
  • China’s PBOC Chief Search Spurs Focus on Finance Regulators (Bloomberg)
  • Elected, but Still Campaigning (WSJ)
  • Pentagon Readies Options for Afghanistan Force After 2014 (Bloomberg)
  • Greece Wins Easier Debt Terms as EU Hails Rescue Formula (Bloomberg)
  • Monti presses Cameron for EU referendum (FT)
  • Welcome, Mr Carney – Britain needs you (FT)
  • Argentina seeks halt to $1.3bn debt order (FT)
  • Asean chief warns on South China Sea disputes (FT)
  • South Korea Tightens FX Rules to Temper Won Surge (WSJ)
 
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