The "Kinks" Return As Treasury Bills Reprice Debt Ceiling Debacle

Tyler Durden's picture

Just when funds thought it was safe to buy short-term Treasuries and rehypothecate them to immeasurable leverage, yields on Bills due after the February 7th debt-ceiling suspension ends are lifting significantly in recent days. Since the year-end liquidity squeeze, yields on the March bills have developed a hump indicating concerns beginning. Of course, levels remain very low for now but the 'kink' is notable.



Congress suspended the $16.7 trillion debt ceiling on Oct. 16 – a day before officials estimated the government would have exhausted its emergency borrowing authority. The suspension will last through Feb. 7, 2014. On Feb. 8, the debt limit will be reinstated reflecting the debt issued between Oct. 17 and Feb. 7, increasing the ceiling to roughly $17.3 trillion by then.

If lawmakers don’t act on the debt limit before Feb. 8, then the Treasury will employ “extraordinary measures” to keep the government afloat for a bit longer.

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Seasmoke's picture


Cognitive Dissonance's picture

Here we go again. How many times are they gonna run this farce?

<As many as it takes to beat us into obedient submission.>

Sudden Debt's picture

the big question will be what happens when Russia and China take over when America falls...

What will happen when the militairy breaks up in America?

Just look at when the civil war ended in America. You had outlaws all over the place with militairy weapons.

Manthong's picture

How many times are they gonna run this farce?

"All the Day and All of the Night"

Tao 4 the Show's picture

You think that's bad? Have you ever experienced In-Laws with weapons?

Sudden Debt's picture

dude... I have a mother in law with a lazy eye when I step in the room and a sister in law that's a devils offspring.

I can write dante's inferno after a family gathering!

Tijuana Donkey Show's picture

Yes, but I have weapons and hand to hand skills. Krav maga baby!


vote_libertarian_party's picture

More Pro-Ceiling Lift Republicans in Congress could be staring at some primary challengers in February\March...



Then does Boehner take 10% of his caucus and work a deal with the Dems?

Bobbyrib's picture

I'm not as optimistic as you. I believe the Republicans will elect "anti-debt ceiling raising" candidate who will then sell out right after they get to DC.


As your name suggests "vote Libertarian." Neither party's candidate (except Ron Paul) can be trust to "right the ship."

Sudden Debt's picture

they can't stop the slide anymore. they're going for the wall and anybody who has a brain and doesn't mind being mocked as a stacker should buy PM's

Ness.'s picture

If you blinked, you missed it.  BTFATH idiots!!! Weeeeeeeeee



Seasmoke's picture

Whatcha Gonna Do, Jack Lew ??

Bobbyrib's picture

I have said it before and I will say it again, someone or something is pinning the ten year yield to be at or below 3.00%.

Beam Me Up Scotty's picture

Maybe that's why gold has been on the rise. They are diverting the money they were using to short gold to keep a lid on the 10 year now instead? They need cover to print moar so they can control the price of both at the same time!

Bobbyrib's picture

I never thought about that. It is interesting to see gold rise while the market either stagnates or takes a dip.

gwar5's picture

But I thought Treasury was already using "Extraordinary measures" for the last 5 years

Sudden Debt's picture

600 billion in 4 months.... DID THEY BUY EVERY AMERICAN A 2000 DOLLAR CHRISTMASS PRESENT?!?!?!?




Rubbish's picture

Baby needs a new pair of shoes.



Sudden Debt's picture

okay no prob... that's why they call it taxmoney... to buy crap... BUT RUBBY SLIPPERS FOR EVERYBODY?!?!?

Manthong's picture

The debt limit is a sham… they have raised it like 67 times or so since the Fed.

The government can “borrow” all it wants.. the debt will never be paid back.

The real scam is the Fed circular trillions to EU banks and the trillions to US banks that is actually a big game of “Hide the Salami”. That is the game that is suppressing wage increases, real investment, killing jobs and savers, and with it the middle class.

But it is making billions for the banking racket and criminals.

Oh, and keeping politicians and lobbyists fat.

LawsofPhysics's picture

only so long as the dollar is accepted...

tick tock motherfuckers...

PT's picture

SD:  SGS predicts US hyperinflation by the end of 2014.  (He first predicted 2020, then dropped it back to 2016, then the end of 2014).  Unfortunately, I still don't know how he calculated the year so I can't check his result.

Sudden Debt's picture

simple, nobody is buying the debt anymore so anything printed extra acts as the inflation number. 10% more money bought by the fed itself is 10% inflation.
If you can't move the hot potato arround you gotto eat it.

Spungo's picture

Can't I just print more potatoes?

yogibear's picture

Onward march to $20 trillion soon.

"Yes we can!"

Next stop after that is $25 trillion. Accelerating debt.

Obama is turning the country into Chicago. Bankrupt like Detroit.

Bobbyrib's picture

Except for Ron Paul, neither party is running on a "Balance the Budget" platform.

amadeus39's picture

Why woud politicians wanting to get elected or reelected run on a Balance the budget platform? More than 50% of voters are "takers"  who simply want more gifts from government and are not concerned whatsoever with how these gifts will be paid for.  Bankruptcy is for the brave and greedy and those who have no skin in the game or nothing to lose

Sudden Debt's picture

at least we'll all be still alive when that happens... only 2 more grey hairs and we're there!

youngman's picture

I dont think this year will be as good as last year tax revenue wise.....remember last year eveyone was selling before the new laws kicked they got a first quarter bonus...this year they do not have that..but they do have new Obamacare expenses.....I think 90 percent of the people that signed up are freebies.....and the insurance companies should be holding out their hand soon....but it will all blow up before the elections....that will be the big political sign...single payer..single payer..socialized medicine.....that was the end game anyway....and that will cost trillions too in ten years....wait till the CBO comes out with the new projections....if they do at has to be one is buying what they are selling...but they still have the fixed costs.....

slightlyskeptical's picture

Tax revenues will be strong again in 2014, but in 2015 they will royally suck. The biggest determinate of tax revenues is capital gains from stock trades. I think those gains will be taken in 2014, leaving 2015 with nothing but losses. Probably be 2017-18 before tax revenues start improving back to the 2014 level.

This was the very reason we ran at a surplus in 1999 and 2000. One time profit taking.

Only way to consistently raise the tax revenue needed is to tax accumulated assets rather than income.

Rising Sun's picture

fuck you Yellen - stupid cunt

J Pancreas's picture

Yellen's slophole is not amused with your lack of respect. 

cornflakesdisease's picture

Wow Ray & Dave of The Kinks are back together!