This page has been archived and commenting is disabled.

JP Morgan Money Market Funds Join Fidelity, Sell Bills "In Light Of Possible U.S. Government Default"

Tyler Durden's picture




 

Yesterday, it was Fidelity who in conducting its fiduciary duty, announced it was getting out of any and all near-term risky Bill insturments, namely those that mature just around the time of a possible technical debt default. Today, while the stock market was soaring on hope that a Washington debt ceiling deal was imminent, it was another firm that was quietly doing the opposite, and was taking "action in light of a possible US government default), and as highlighted earlier when we showed the ongoing divergence between stocks and Bills, was quietly "boosting" liquidity (i.e. selling short-term securities) in order to avoid breaking the buck (which as we also learned yesterday had been breached by not only the Reserve fund but by 28 other heretofore unknown money market funds). The firm: JPMorgan.

 From JPMorgan's Investment Management (JPMIM) group:

J.P. Morgan takes action in light of possible U.S. Government default

 

Although J.P. Morgan Investment Management Inc (JPMIM) continues to believe that the probability of a U.S. Government default is low, it has taken certain precautionary measures with respect to the money markets (the “Funds”)

 

These actions were taken in an attempt to manage the Funds in line with their objectives to seek to maintain a net asset value of $1.00 per share.

 

· As of October 9, 2013, the funds did not own any securities issued by the U.S. Treasury that mature or have scheduled coupon payments between October 16, 2013 and November 6, 2013.

 

· In addition, JPMIM has increased liquidity positions in the Funds

And now we know who was on the other end of today's equity-debt disconnect.

Full release here.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 10/10/2013 - 16:50 | 4042764 Landotfree
Landotfree's picture

There is not going to be a default.  

Thu, 10/10/2013 - 16:56 | 4042768 lolmao500
lolmao500's picture

If a default happens, it's the treasury that does it on purpose.

In other news...

http://www.opposingviews.com/i/society/dry-run-terror-attack-took-place-...

Dry Run For Terror Attack Took Place On Sept. 2 Flight From D.C. To Orlando, Newly Revealed Memo Says

A recent flight from Washington D.C. to Orlando, Fla., was used by possible terrorists as a “dry run” for a planned attack on United States airliners, similar to the 2001 September 11 attacks.

That, anyway, is what a Tampa TV station says it has discovered by obtaining an internal e-mail sent to members of a pilot’s union, the U.S. Airline Pilots Association, which represents US Airways pilots.

The memo, reproduced on the web site of WTSP TV, pinpoints the dry run to US Air’s Flight 1880 on September 2. On the flight, according to the memo, the following transpired:

“A group of Middle-Eastern males boarded in DCA. Shortly after takeoff, one got up and ran from his seat in coach towards the flight deck door. He made a hard left and entered the forward lav, where he stayed for a considerable length of time! While he was in there, the others got up and proceeded to move about the cabin, changing seats, opening overhead bins, and generally making a scene. They appeared to be trying to occupy and distract the flight attendants.”

The memo goes on to ask, “Coincidence?”

The memo says that Federal Air Marshalls on board the flight saw the situation as serious enough to reveal themselves and “deal with the situation in no uncertain terms.”

The Transportation Safety Administration confirmed the incident, the WTSP report says. The TSA told the station that there is no cause to investigate further.

But an unnamed Federal Air Marshall told WTSP, “they're liars. They're flat out liars." The anonymous marshall said that the TSA does not want the public to know about the inadequacy of its anti-terrorist procedures.

The memo also said that on Flight 1180's return trip to Washington, no air marshall scheduled to fly that route, but there was supposed to have been “a significant VIP” on board. The VIP rebooked to another flight after being informed of the incident on the incoming leg of Flight 1880.

The memo notes that there were “eight Middle Eastern females, concealed in full burkas” waiting to board that return flight.

“Coincidence?” the memo asks again.

 

The PTB would sure love a nice 9/11 distraction to start another war/raise the debt ceiling... and women in burkas? Saudi Arabia funded/trained terrorists yet again? If they do this and say it was Iran I'm gonna blow a fuse.

Thu, 10/10/2013 - 17:16 | 4042825 TeamDepends
TeamDepends's picture

Memo to middle-eastern dupes/jihadis being recruited for just such a plan:  You will be torn limb from limb by every able bodied passenger on that flight, including cripples, old people, and children.

 

 

 

Thu, 10/10/2013 - 17:24 | 4042838 lolmao500
lolmao500's picture

They don't even need jihadis to do anything... Just get them in the planes, remote control planes into buildings (while shutting down comms) = then blame the jihadis for it. This is probably what went down on 9/11.

Thu, 10/10/2013 - 17:49 | 4042905 eatthebanksters
eatthebanksters's picture

"Hi Jamie, it's Barry..Barry who? Your fucking president Barry that is.  I have a scoop for you...get out of short term treasuries, I'm going to publicly fuck Boehner in the ass.  And for my services wire another $25 million to my Jersey Isles account.  Watch and learn."

As Barry hangs up the phone he says to himself,"And Jamie thinks he's rich because he's smart...what a fucking joke!"

Thu, 10/10/2013 - 18:10 | 4042956 AllWorkedUp
AllWorkedUp's picture

Yeah, but why would they do that? What do they know? Surely they knew like the rest of the country Boner would cave right?

Thu, 10/10/2013 - 20:03 | 4043319 eatthebanksters
eatthebanksters's picture

barry's Jersey isle account number ends in 8 and Boner's is 9...got it? :-)

Thu, 10/10/2013 - 17:21 | 4042833 NotApplicable
NotApplicable's picture

Well, Florida is where the CIA ran the 9/11 attacks from, so...

Thu, 10/10/2013 - 23:56 | 4043923 NaN
NaN's picture

That's a remarkable level of paranoia. Since when is using the lav. and opening bins suspicious?

In any case, everyone knows that the same diabolical plan can never work again.

Moreover, there is no need for an attack since the US has done a fine job of bankrupting itself with wars, non-productive spending on DHS, NSA, etc., exactly according to the stated OBL plan. The loss of moral leadership, the Patriot Act, and financial crisis are a cherry on top.

Fri, 10/11/2013 - 00:10 | 4043942 NaN
NaN's picture

Paul Craig Roberts pointed out that a default would hand Obama a state of emergency that would enable him to do whatever he wanted for nat. sec. reasons. It would be a gift.

Thu, 10/10/2013 - 16:51 | 4042765 buzzsaw99
buzzsaw99's picture

And promptly put the funds on deposit with the fed. Too bad Fidelity doesn't have that option.

Money for nothin'

Chicks for free...

Thu, 10/10/2013 - 16:51 | 4042766 Devotional
Devotional's picture

This is what "frightens" me, if JPM and Fidelity dumped their short term debt, this increase in the stock market (euphoria) seems like cattle being herded in for the kill. There is NO agreement yet, right? We will see how this shit plays out tomorrow ... remember that it will be FRIDAY.

Thu, 10/10/2013 - 17:01 | 4042782 lolmao500
lolmao500's picture

They probably gonna put their insider trading positions on Friday near the close... then do a deal this week-end and make a shitton of money monday morning.

Thu, 10/10/2013 - 17:20 | 4042828 Devotional
Devotional's picture

ok, you said it better!

Thu, 10/10/2013 - 17:04 | 4042785 McMolotov
McMolotov's picture

Monday is Columbus Day, so stocks will be open, but the bond market and banks will be closed. Any thoughts?

Thu, 10/10/2013 - 17:32 | 4042840 Ham-bone
Ham-bone's picture

the T-bill market is too big even for the Fed to move - it's measly $45 billion a month is tied down maintaining the intermediate and long end...$45 billion a month wouldn't even make a dent in the $7 T t-bill market that is issuing and rolling way to fast - plus, nearly all $5 T of foreign Treasuries are T-bills...if T-bill market starts to spike and foreigners (China) don't roll over, that would well and truly be game, set, match.

Not saying were there...but that the this is a highly dangerous situation for if the Fed had to buy up the T-Bill market, you can add $3 to $7 Trillion to it's QE within a year...only good thing at that point would be Fed would own all public debt so bond vigilantes would be truly extinct assuming Fed just continues rolling it's balance sheet.  Those pesky markets would never bother us again...phewwww.

Thu, 10/10/2013 - 17:34 | 4042859 Arius
Arius's picture

hammy - i agree with you 45 billion is chump change in these games ... but cant the Fed just add a few more zeros ... it is funny money anyway right?

Thu, 10/10/2013 - 17:59 | 4042895 Ham-bone
Ham-bone's picture

Yeah - Fed can do as it see fit but lets think a minute...

-1mo t-bill is the most liquid (more money than any other US debt instrument...maybe $3 T rolling over every month...actually on Thursdays but you get the point)

-interest on this debt just spiked from .003 in late September to .35 yesterday and .25% today

-Obama names Yellin chief this week in the middle of this little storm effectively creating a lame-duck out of Ben...if something goes wrong, could be a bit of paralysis (intentionally? why now???)

-nearly all foreign treasury debt has been swapped (via QE) from notes / bonds into almost entirely bills...

-Would Janet support the Fed enlarging QE into the T-bill market and radically increasing QE to ward off those "evil, manipulative foreigners" who now hold it???>>>

Like you said Arius, Fed can add some zero's but when you are starting at $45 billion in treasury purchases a month already, adding a zero or maybe just doubling or tripling takes you to bout the right number to control the t-bill market

Thu, 10/10/2013 - 18:02 | 4042936 prains
prains's picture

that smell is the printer overheating.........it's the only trick left in Yellin's "bag"

 

sorry, tough visual

Thu, 10/10/2013 - 18:15 | 4042957 Ham-bone
Ham-bone's picture

but the Trillions of dollars would go to foreigners for treasuries and they would likely change dollars into equities, CRE/RE, n lots of low priced PM's???

Equities keep going higher, same for RE...rates after a short term blip in the short end all go down ala Japan...til 10yr will be under 1% and ever generally going lower by the time Janet's Fed completes QE with a balance sheet of 70% of all public debt - say $8T'ish and then just roll it for eternity

Thu, 10/10/2013 - 18:14 | 4042972 Arius
Arius's picture

thanks!  intruguing thoughts about Yellen's appointment ... interesting times indeed ... it feels good to have ZH as a punching board of exchanging ideas in these times ... we are lucky

Thu, 10/10/2013 - 16:53 | 4042767 CClarity
CClarity's picture

Since similar entities are pretty much the only bids for super short Tbills, besides dealers and foreign Central Banks, this could get very interesting if the other "fiduciaries" become like minded and punt their front end Tbills and stop bidding for them in auctions.

Thu, 10/10/2013 - 16:54 | 4042771 SheepDog-One
SheepDog-One's picture

Quick! Gimme some stawks to buy before the curtain goes up for act 23,750 of the shit-show! Must....Buy....

Thu, 10/10/2013 - 16:57 | 4042772 gbresnahan
gbresnahan's picture

let's just hope they don't pull a Cyprus

Thu, 10/10/2013 - 17:00 | 4042779 SheepDog-One
SheepDog-One's picture

Any day now, they certainly won't be warning anyone when.

Thu, 10/10/2013 - 17:22 | 4042835 Eternal Complainer
Eternal Complainer's picture

The big event!

Damn cyber terrorists!

Thu, 10/10/2013 - 16:59 | 4042778 Cognitive Dissonance
Cognitive Dissonance's picture

But......but.......but I thought Boner said they had a short term deal. Why would JPM sell short term bills when it was all kicked down the road 6 weeks or more?

Thu, 10/10/2013 - 17:15 | 4042815 Arius
Arius's picture

good question ... thats why you get paid the big bucks AND you are richer then me i might add

Thu, 10/10/2013 - 17:13 | 4042813 ebworthen
ebworthen's picture

Ah the J.P. Morgue:

 

  1. Key recipient of .gov money to administer unemployment, welfare, and EBT/Food Stamp debit card accounts and the fees and commissions that go along with it.
  2. Receiver of backdoor Treasury funds at 0.05% to lend out to the sheeple at 4.5%-29%.
  3. Un-prosecuted LIBOR rigor and accomplice to Corzine stealing $1.2 Billion.
  4. Key member of the shadow government manipulating the FED & .gov.
  5. One of the head Capo's of the Wall Street organized crime syndicate.
Thu, 10/10/2013 - 17:24 | 4042839 Rainman
Rainman's picture

Skull and bones, baby, skull and bones

Thu, 10/10/2013 - 17:18 | 4042824 Brett Merkey
Brett Merkey's picture

 

 

Meanwhile, on the Goldman Sachs front...

The former examiner who pushed for a downgrade, Carmen Segarra, now contends in a lawsuit filed Thursday that just weeks after the vote, her superiors asked her to change her findings on Goldman and fired her after she refused.

Bank Examiner Was Told to Back Off Goldman, Suit Says

 

 

 

 

Thu, 10/10/2013 - 17:28 | 4042847 Rainman
Rainman's picture

She needed firing because she is stupid. Everybody knows Squid is off limits.....good riddance.

Thu, 10/10/2013 - 17:17 | 4042826 Australian Economist
Australian Economist's picture

Gold is getting slammed today -> $1285

Thu, 10/10/2013 - 17:20 | 4042831 Devotional
Devotional's picture

if it hits that 1200 USD I am buying a shitload this time round.

Thu, 10/10/2013 - 17:23 | 4042832 Kirk2NCC1701
Kirk2NCC1701's picture

Don't [expletive] care! 

Wake me when it's  $1000 and my truck can go "beep, beep, beep", or it's >$1900 (so I can swap it for some other valuable and real assets).

Thu, 10/10/2013 - 17:25 | 4042837 Devotional
Devotional's picture

1000 USD? Make that another truck next to yours.

Thu, 10/10/2013 - 18:16 | 4042978 AllWorkedUp
AllWorkedUp's picture

What else is new? It gets slammed at nearly the same time every single day.

Thu, 10/10/2013 - 17:20 | 4042827 QQQBall
QQQBall's picture

Banksters giving Congress Critters a light tap in the shins. Wall Street showing them the carrot. Same as it ever was...

Thu, 10/10/2013 - 17:32 | 4042856 brettd
brettd's picture

How do we "default" when the Treasury takes in

250 billion a month and the interest on the debt is ~20 billion?

Talk about an indictment of the education system!

It's all theater for traders and Wall Street insiders...yeesh....

 

Fri, 10/11/2013 - 08:24 | 4044352 lucyvp
lucyvp's picture

I used to think this too, then I though what if the 400B that also needs to roll in the next 30 days has no takers?  oops

Thu, 10/10/2013 - 18:26 | 4043024 AllWorkedUp
AllWorkedUp's picture

and now we know why JPM did it.

"Per ZH: Obama rejects Republican short term plan"

Whoops

Thu, 10/10/2013 - 20:14 | 4043345 jonjon831983
jonjon831983's picture

Let me guess all this is just part of plan, formalized with that meeting they had with Obama a week ago?

Do NOT follow this link or you will be banned from the site!