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Fed Prepares For Bond-Fund Runs, Looking At Imposing "Exit Fee" Gates

Tyler Durden's picture




 

It was two short years ago that the Fed, in its relentless attempt to push everyone into the biggest equity bubble of all time, did something many thought was merely a backdoor ploy to forcibly reallocate capital out of the $2.7 trillion money market industry and into stocks when, as we wrote in July 2012, it contemplated imposing suspensions of fund redemptions to "allow for the orderly liquidation of funds assets." Or in other words "gate" money markets.

Since then various iterations of this proposal have been attempted, either by the Fed or the SEC, however due to stern industry push back (and the relatively modest amount of money at stake) the attempt to force investors to rotate their funds out of money markets (because it is quite clear that if the Fed is hinting at gating issues with a given asset class, it is only a matter of time before the hint becomes a reality) has failed, and as a result the total amount of notional capital held at money market funds has been largely unchanged in recent years.

Here comes attempt number two.

Only this time it is no longer aimed at money market funds, but that other most hated, by the Fed, asset class: bond funds, whose relentless inflows, we shouldn't have to remind readers are the main reason why the propaganda myth of a recovery, and the resulting con game, keep crashing and burning, as it is impossible to spin a 2.5% 10 Year yield as indicative of anything remotely resembling a recovery, and shows at best, a semi-deflationary world. Said inflows also are recurring evidence that whatever retail money remains unallocated, continues to go into the one asset class which is actively disparaged by the Fed at every opportunity.

In brief, if anything, the Fed would prefer that all retail investors pull their money out of bonds funds (and money markets of course), and invest them into 100x+ P/E biotech stocks. Because after all, today's stock market is nothing but the biggest Fed-propped Ponzi scheme in existence.

And in order to achieve that, according to the FT, "Federal Reserve officials have discussed imposing exit fees on bond funds to avert a potential run by investors, underlining regulators’ concern about the vulnerability of the $10tn corporate bond market."

FT justifies this latest unprecedented pseudo-capital control by sayng that "officials are concerned that bond-fund investors, as with bank depositors, can withdraw their money on demand even though the assets held by their funds are long-term debt and can be hard to sell in a crisis. The Fed discussions have taken place at a senior level but have not yet developed into formal policy, according to people familiar with the matter."

“So much activity in open-end corporate bond and loan funds is a little bit bank like,” Jeremy Stein, a Fed governor from 2012-2014 told the Financial Times last month, just before he stepped down. “It may be the essence of shadow banking is ... giving people a liquid claim on illiquid assets.”

The Fed's justification for this latest bazooka approach in forced capital reallocation:

Exit fees would seek to discourage retail investors from withdrawing funds, thereby making their claims less liquid and making a fire sale of the assets more unlikely.

"Oddly" there is nothing in the Fed's proposal about gating the most overvalued asset classes of all, equities, or say, biotechs and momo stocks, where the drawdowns, when they happen, are so fast and vicious, the bulk of hedge funds are still down for the year precisely because they were all led like obedient sheep into the Div/0 PE slaughter. Also, memory is a little fuzzy, but in the days after Lehman, it was equity hedge funds that promptly gated all their investors.... not bond hedge funds, which in fact were scrambling to deal with the influx of new funds.

Also, it goes without saying that "discouraging investors" from withdrawing funds is the last thing on the Fed's mind, which knows very well that when it comes to investor behavior all that matters is how the Fed's future intentions are discounted.

And with this unprecedented step, the Fed is sending a very clear message: it may be next year, or next month, or next week, but quite soon you, dear retail bond-fund investor, will be gated and will be unable to pull your money.

The only thing that was missing from the FT piece was a casual reference to Cyprus.

So what is the obvious desired outcome, at least by the Fed? Why a wholesale panic withdrawal from bond funds now, while the gates are still open, and since those trillions in bond funds have to be allocated somewhere, where will they go but... stock funds.

In other words, now that the Fed is pulling away from injecting tens of billions of liquidity into the market every month, it is hoping the investing population will pick up the torch. And since it has failed to incite the mass reallocation of funds from bonds to stocks, the Fed is willing to use every trick in the book to achieve its goal.

Sure enough, "introducing exit fees would require a rule change by the Securities and Exchange Commission, which some commissioners would be expected to resist, according to others familiar with the matter." However, those commissioners would be promptly silenced when a joint effort between the NSA and the Fed were to threaten the release of embarrassing photographs or conversations to the general public. And watch how all dissent promptly disappears, and the Fed once again demonstrates it is increasingly more helpless in not only preserving the biggest asset bubble in US history, but at modeling and nudging human behavior.

Sadly for the Fed, America is now on to its endless bullshit experiments. Because absent an executive order from Obama demanding that Americans invest every spare Dollar in a Ponzi scheme, this too attempt to forcibly reallocate capital from Point A to Point B will fail.

Which, however means one thing: since the Fed is so desperate it has to float trial balloons of this nature in the financial press, the untapering can't be far behind, and with it QEternity+1.

Finally, just like in Europe with its revolutionary NIRP experiment, it will also confirm that the real economy has never been worse than it is now.

 

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Mon, 06/16/2014 - 15:38 | 4862372 So Close
So Close's picture

Free markets

Mon, 06/16/2014 - 15:42 | 4862399 kliguy38
kliguy38's picture

"We're gonna need a bigger gate"

Mon, 06/16/2014 - 15:47 | 4862420 ZerOhead
ZerOhead's picture

So naturally you'll get a smaller gate.

(The better to throttle you with while you get ass-raped on the way out...)

Mon, 06/16/2014 - 15:50 | 4862442 DoChenRollingBearing
DoChenRollingBearing's picture

Best to get something out now, before the gate appears...

And choose different exits...

Mon, 06/16/2014 - 15:54 | 4862462 Kaiser Sousa
Kaiser Sousa's picture

well will u look at that...

the Dow just turned green in the last 9 minutes to wipe away all loses...

and Gold and Silver which where attacked at the same times in London and NY, then traded sideways all day long, r now shedding additional gains on the Globex...

miracles do happen...

Mon, 06/16/2014 - 15:56 | 4862475 gh0atrider
gh0atrider's picture

Bits of cryptose are beginning to form and foam at the corners of gh0atrider's mouth.  Can barely contain himself....

Mon, 06/16/2014 - 16:13 | 4862537 zaphod
zaphod's picture

From the FED's comments, their focus seems to be to match the liquidity of the funds with the liquidity of the underlying assets. This is reasonable in a sense. The high liquidity of bond funds makes investors think they can enter/exit at will, but the underlying bond market does not support this.

Of course the issue is (as with everything with the FED) that while the FED only looks at regulatory and control solutions, there are many other potential solutions as well, but the FED never considers anything other than expanding it's control.

Mon, 06/16/2014 - 16:20 | 4862549 Manthong
Manthong's picture

Gated.. Haircut..

Seems the language is compromised.

Home of the free?

Or Land of the Slaves.. 

Mon, 06/16/2014 - 16:27 | 4862572 THX 1178
THX 1178's picture

Ever tried squeezing 100 ornary elephants through a keyhole?

 


Exit fees would seek to discourage retail investors from withdrawing funds, thereby making their claims less liquid and making a fire sale of the assets more unlikely.

 


You heard it here ladies and germs- the Fed is terrified of a fire sale. Now why would that be?

Mon, 06/16/2014 - 16:29 | 4862591 Manthong
Manthong's picture

.. because they cannot control (gate) the outflow when the Ponzi gets widely understood. 

Mon, 06/16/2014 - 17:16 | 4862777 Thought Processor
Thought Processor's picture

 

 

 

This is all so fucked up.

Tue, 06/17/2014 - 00:52 | 4864061 whotookmyalias
whotookmyalias's picture

The greed in me wants to chase some sort of return. The sane in me is happy to be mosting in (worthless US) cash and some Gold/Silver/Lead.

 

This is beyond fucked up.

Tue, 06/17/2014 - 01:49 | 4864116 Manthong
Manthong's picture

Just wait until the first money market breaks the buck.

On second thought, that probably already happened, but since the CB’s can hit Ctrl-P anytime they want and will buy anything and everything at any monopoly money valuation, it does not matter that there are a stack of hotels to the ceiling on Park Place until the other kids are busted or just walk away from the game.

Tue, 06/17/2014 - 09:55 | 4864715 Thought Processor
Thought Processor's picture

 

 

I think all of this really started when the first money market broke back in 2008.   It was then that the 'extreme' measures were put in action in order to prevent panic outflows.

They had to do something and they couldn't do nothing.

 

And it all went downhill from there, moral hazard being what it is.

 

It's all just a bunch of lies layered on top of each other now.  And the only way to get out of it is to blow it all up and start over.

 

The reset cometh.

Mon, 06/16/2014 - 17:25 | 4862813 Oracle 911
Oracle 911's picture

It wont work and we all know that.

I think it will be still a fire sell even the retail investors ( MSM muppets) will sell it as crazy. And they will not give a damn about some fees, they will get rid of this toxic "asset" at whatever price fees or not.

Mon, 06/16/2014 - 19:49 | 4863286 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Exit fees would seek to discourage retail investors from withdrawing funds, thereby making their claims less liquid and making a fire sale of the assets more unlikely.

In other words it is a lose lose situation for the muppets.

Tue, 06/17/2014 - 05:33 | 4864227 CuttingEdge
CuttingEdge's picture

Maybe its to scare the Chinese into hanging on to that $2T or so they are holding...

Mon, 06/16/2014 - 16:48 | 4862663 Colonel Klink
Colonel Klink's picture

Bits of crypterm are beginning to form and foam at the corners of gh0atrider's mouth.  Can barely contain himself....

Fixed it for you goatfucker.  Crypto + sperm = crypterm

Mon, 06/16/2014 - 16:57 | 4862701 gh0atrider
gh0atrider's picture

Within the cryptosphere every cryptsperm swims and is challenged for life, to impregnate the mind of a latent gh0at.  A new alt-coin?  Perhaps, yet unseen. 

Mon, 06/16/2014 - 17:46 | 4862876 Miffed Microbio...
Miffed Microbiologist's picture

May be he should put the bit coins in a MyRA and complete the circle of exuberant idiocy. But he'd probably prefer to swallow the other.

Miffed;-)

Mon, 06/16/2014 - 17:53 | 4862904 gh0atrider
gh0atrider's picture

Hey fuckhead...  name one thing you have done online besides visit websites?

Mon, 06/16/2014 - 19:18 | 4863178 DaddyO
DaddyO's picture

Listen Ghoathead, is that any way to talk to a lady!

Yeah, I'm talking to you douche'bag.

Take you bitcoin schtick and stick it where the sun don't shine.

What a dweezle.

DaddyO

Mon, 06/16/2014 - 19:26 | 4863202 gh0atrider
gh0atrider's picture

Your human sexes do not compute with gh0atrider!  Everyone save Satoshi is to be disrespected!

Mon, 06/16/2014 - 19:43 | 4863263 Miffed Microbio...
Miffed Microbiologist's picture

Dearest fonestar,

I will not descend to your level in either idiocy or foulness. I am a user of the internet, not a developer as you have accused me. I will never claim otherwise. My talents are based in the real world not in the virtual one. I have friends who have been in software architecture for more than 30 years and they have collectively called you a moron. We shall see if the assessment is true in the end.

When the time comes I hope you find a virtual microbiologist to see to your needs. You may be in luck and will take Bitcoin for their services.

Miffed;-)

Mon, 06/16/2014 - 19:55 | 4863301 gh0atrider
gh0atrider's picture

gh0atrider knows aging software deveopers that don't get Bitcoin either, had one as an instructor.  They didn't get it at $50 and they don't get it at $500.  But he knows more young ones that do.

Mon, 06/16/2014 - 20:00 | 4863322 gh0atrider
gh0atrider's picture

...and your division of "virtual" from "real" is simplistic and stupid.  Like most Zeroheads you don't seem to understand the difference between real and corporeal.

Mon, 06/16/2014 - 20:52 | 4863470 Miffed Microbio...
Miffed Microbiologist's picture

Simply semantics my love. Time will tell who the stupid one truly is. We just have to wait.

So a thought is real. But it has only value to the thinker unless developed into a form appreciated by others. This historically has been physical. That you have bypassed this critical step is the issue.

Miffed;-)

Mon, 06/16/2014 - 21:49 | 4863682 DaddyO
DaddyO's picture

Miffed, your grace and eloquence has exceeded my ability to deal with this pinhead, kudos my dear lady.

DaddyO

Mon, 06/16/2014 - 22:05 | 4863726 gh0atrider
gh0atrider's picture

You shut up!

Mon, 06/16/2014 - 23:15 | 4863906 Miffed Microbio...
Miffed Microbiologist's picture

DaddyO, honestly I don't harbor animosity for Fonestar just pity. He is stuck. Obsessively fixated on one thing. And he will repeat his mantra over and over and be comforted. No one can help because he doesn't want to see. So when he calls me a fuckhead I just feel sorry for him not anger.

We have so much more than he could ever hope and experience he does not have. Who would you rather be in the end? Let's just try not to tease too greatly when his world comes down.

In friendship always,

Miffed;-)

Mon, 06/16/2014 - 22:05 | 4863724 gh0atrider
gh0atrider's picture

No systems are tangible including Bitcoin (and your "gold backed") nonsense scam.  Trying to say systems are "not real" because you can't touch them is plain stupid.

Mon, 06/16/2014 - 23:26 | 4863942 Miffed Microbio...
Miffed Microbiologist's picture

I never said bit coin was not real. Thoughts are real as are concepts. Dreams are real. However, they hold no long term value unless tied to something physical others can appreciate.

When cash becomes virtual central control will be possible. Even the very simple will see the danger in this and this is why so many here fear it. You offer something that has the same risk and will never be fully secure.

Miffed;-)

Mon, 06/16/2014 - 23:56 | 4863999 MontgomeryScott
MontgomeryScott's picture

JESUS H. FUCKING CHRIST.

No, I won't be so kind, you ignorant, shitheaded, puling, child-man NWO minion.

Your reliance on the electric grid to transact monetary trades is as weak as the grid itself. Before Tesla, there WAS NO ELECTRICITY, you stupid little shit. TRY to tell everyone that a hundred years of electricity will replace 6,000 years of honest trade. GO AHEAD, you NWO SHILL.

Hey, what about those EMP's, huh? They COULDN'T WIPE OUT the grid, now; could they? NAW. It could NEVER HAPPEN, and anyone who says this is a tin-foil-hat-wearing conspiracy theorist.

REALLY?

http://empcommission.org/

http://en.wikipedia.org/wiki/Electromagnetic_pulse

http://dailysignal.com/2013/03/12/chaos-from-the-sky-why-the-emp-threat-...

Do you need MOAR sources, or are you getting the idea, you sheep-dipped little TWAT?

WELL, as long as I have my RFID CHIP implanted in my forehead or my right hand, my SHITCOINS will NEVER 'permanately disappear', you are saying, AREN'T YOU, gOatfucker?

Sorry, I am not quite as restrained as some of the others on the Zero Hedge blogs; regarding fuckstains who interject bullshit memes.

It's all ones and fucking zeroes, you know. It's in your hand, or it isn't in your hand (in which case it DOES NOT FUCKING EXIST).

Excuse me, while I go and finish playing my game of 'World Of Dipshits', in Momma's basement. OH, SHIT! TOO LATE! Momma's turning off the power.../

 

(Mommy, can I have some clothes, please? It's kind of cold down here in the dark.)

 

Tue, 06/17/2014 - 00:16 | 4864024 Miffed Microbio...
Miffed Microbiologist's picture

Preach it Brother! The sad thing is neither subtle or in your face will work here. He must know to be viable, Bitcoin must be accepted by the public and we ain't buying it. It is doomed to fail. Too bad the fuckheads have more sense then he realizes.

Miffed;-)

Tue, 06/17/2014 - 00:36 | 4864050 gh0atrider
gh0atrider's picture

Oh no!  The EMPs are coming any day now! (in the next five hundred years).

And if that fails...

The one-world government that owns every power station on Earth is going to turn them all off!!

 

You fucking mental reject!

Tue, 06/17/2014 - 08:03 | 4864340 sleigher
sleigher's picture

Ghoatstar, we just missed a big CME last week dude.  I am not saying the end is nigh, but we really just don't know.  Could happen any day or 500 years from now.

Tue, 06/17/2014 - 01:13 | 4864078 G-R-U-N-T
G-R-U-N-T's picture

As the Fed continues to try to control the economy and with it society, it is only spring boarding us into economic disaster and with it civil unrest! The business cycle will always prevail despite the horrible decisions coming from a detached self absorbed entity. Watch the Fed blame everyone but themselves.

Tue, 06/17/2014 - 06:57 | 4864270 ArkansasAngie
ArkansasAngie's picture

Liquidity on illiquid assets.  Sounds lioke the funds have a fundamental flaw.  Don't buy the funds.  They aren't riskless.

Keeps your assets closer to home.

Mon, 06/16/2014 - 15:54 | 4862466 Buckaroo Banzai
Buckaroo Banzai's picture

Holy fuck. It's the Degree "All-in" moment for STAWKS.

Mon, 06/16/2014 - 15:55 | 4862469 fonzannoon
fonzannoon's picture

I call bullshit on this whole thing. The only reason you announce that there will be exit fees is to purposefully try to get capital to flee...and hopefully into SPY. Everyone can see the nirpish future and 2.60% looks like a fat juicy steak right now. They are doing this not to prevent money from fleeing bawnds...rather they are hoping and praying money moves out of bawnds.

Mon, 06/16/2014 - 16:12 | 4862525 Dr. Engali
Dr. Engali's picture

Agreed. The topic of 401k and IRA confiscation comes up a lot in conversations and yet that money won't move either. Clients don't want to see their portfolios cut in half by taxes if they withdraw everything to avoid it, and even if they did they have no idea what to do with the "money" so they just stay put.

Mon, 06/16/2014 - 16:20 | 4862555 NotApplicable
NotApplicable's picture

I have a 401k that used to sit entirely in a money market fund. Then I got a letter a year or so ago stating the fund was being shut down and my only "cash equivalent" option was to put it into a bond fund. Now, it too shall no longer be a "safe haven."

Gee, it's like they're trying to corral me in an effort so that I'm easier to slaughter.

Sorry, but there's no way I'm committing eventual suicide by moving into stocks.

 

Mon, 06/16/2014 - 16:30 | 4862597 fonzannoon
fonzannoon's picture

CNBC has the Traveler's CEO on right now. He has blah blah blah billions in AUM. He says he is mostly out of stocks and owns a shit ton of bawnds. The interviewer is all "Why won't you just invest in the damn S&P!!!". 

I don't that guy is too concerned about exit fees from his bawnds.

Mon, 06/16/2014 - 17:31 | 4862828 NoDebt
NoDebt's picture

I noticed the word "retail" featured prominently in the article.

Mon, 06/16/2014 - 16:39 | 4862618 Manthong
Manthong's picture

if the money is more than a year or two of wages.. GET THE F OUT.

it is free collateral for the banks and wage slaves are grease for the wheels of kleptocracy.

 

 

Mon, 06/16/2014 - 17:50 | 4862892 SilverRhino
SilverRhino's picture

If you still have a 401K you are effectively committing suicide anyway.

PM's ... they cant hold them down forever and they sure as fuck cant keep this ponzi going much longer.

Mon, 06/16/2014 - 20:29 | 4863406 Kirk2NCC1701
Kirk2NCC1701's picture

Nor can they track it, or seize it as litigation - vulnerable assets.
Which, to many people is even more important.

Tue, 06/17/2014 - 00:29 | 4864042 MontgomeryScott
MontgomeryScott's picture

Roosevelt, 1933, emergency declaration, Gold seizure from the citizens of the republic.

Um, WHAT?

Tue, 06/17/2014 - 00:48 | 4864057 Nick Jihad
Nick Jihad's picture

Which is why it is very important never to take your gold with you on boating trips.

Tue, 06/17/2014 - 00:25 | 4864039 MontgomeryScott
MontgomeryScott's picture

The Tribe rules.

OOPS, I mean 'The Mob Rules' (if you listen to fools).

GEE, it's like they're trying to corral you. YA THINK?

A little Black Sabbath/ Heavy Metal Noise for your insightful analysis:

http://www.youtube.com/watch?v=mXl9mkRxPTg

Those who are most easily enslaved truly believe that they are free.

"...my only "cash equivalent" option was to put it into a bond fund." GEE, it sounds like you were corraled a long time ago.

I guess you CAN 'grow' your 'portfolio'. I tried planting some currency in the back yard, as a learning moment for my children (along with some corn and tomatoes). Every day, I had them water the rows, and I weeded them, for about 6 months. Can you guess which ones actually GREW?

 

The center does not hold. The FED is collapsing. As the FED goes, so goes the shadow-economy. Yeats was right.

Fed Prepares For Bond-Fund Runs, Looking At Imposing "Exit Fee" Gates

I'm going long on lead, antimony, and brass. Arable land; potable water, clothing, shelter, and food supplies are also quite high on the list.

http://www.youtube.com/watch?v=nd3ZiAwmLpM

What's a '401(K)'? Is that some type of 'retirement fund', like IRA's or KEOGH's used to be? ALL HAIL the IRS!

 

 

Tue, 06/17/2014 - 01:27 | 4864100 bilbert
bilbert's picture

Yep - me too.....

We have fewish 401 plan options, and I don't really like any of my allocation choices. 

I'm currently weighing the option of cashing the darn thing out, paying taxes on it, and keeping it close at hand.

B

Mon, 06/16/2014 - 16:16 | 4862542 EverythingEviL
EverythingEviL's picture

Did you read a bizarro article or something? That's exactly what the article said numbnutz

Mon, 06/16/2014 - 16:28 | 4862587 fonzannoon
fonzannoon's picture

well first off please forgive me, I don't really read the articles much anymore. I was calling bullshit on this

" the Fed is sending a very clear message: it may be next year, or next month, or next week, but quite soon you, dear retail bond-fund investor, will be gated and will be unable to pull your money."

 

 

I did not read much futher. So If Tyler drew the same conclusion than good for him and numbnutz for me.  I don't agree about the untaper though. I think the fed will actually raise rates. Look at last year. Yields went up and the S&P was up 30%. The 10yr started redlining at 3% and here we are again. That is the ultimate problem. The fed' sweet spot is so small that it is easy for things to get out of whack either way.

Mon, 06/16/2014 - 16:35 | 4862609 EverythingEviL
EverythingEviL's picture

Numbnutz withdrawn lol

Mon, 06/16/2014 - 16:41 | 4862624 fonzannoon
fonzannoon's picture

oh no definitely keep it. It's important to be called a numbnutz every so often. I thank you kindly.

Mon, 06/16/2014 - 15:59 | 4862485 aVileRat
aVileRat's picture

Yup, the big fear is where will that money go. Recall there is a cost to having dead capital given the non-core inflation rate and cost of borrow. Also, ROA's will need to have a yield component similar to 1970 style investment structures inorder to fend off the growth bears, particularly cash yield not correlated to T-10.

If that money washes out to sea, or to more lax monetary regimes then we could see a rapid un-taper or need to twist the yield curve to supress the rampant money route. Note, a similar panic inflation then un-taper was what happened in 1994/1995 which then led to a total riskapalooza until 1998. Tapering or hiking the rates with no net improvement in the U90 will only tailspin the US at this stage.

Which is cool, since displaced/returning to market unemployment is clearly not the target of the TALF/TARP regime.

I honestly suspect high energy prices will naturally cool inflation expectations (and ROE's for the go-go sectors) naturally over the next 5 months. Which is great, because there are plenty of editorials who are calling for a returned focus on Return on Asset productivity vs. Return on Equity via financial gimmicks, which will improve the gross hiring ex-energy sector of the OECD plus improve consumer purchasing power without fucking up the Laffer curve or tax base further.

(Not an IMF guy, but worried he is starting to sound like one; shit.).

 

Mon, 06/16/2014 - 16:03 | 4862501 fonzannoon
fonzannoon's picture

That money ain't going anywhere. Those bondholders are dug in like ticks. I would venture the fed goes so far as to actually raise rates in hopes of freeing up some coupons. Not gonna happen. That will be an interesting moment. Either the fed threads the needle and gets velocity going and some movement out of bonds but into stocks but not too much. Or the bond market calls bullshit on the fed and yields go down even as the fed says they will go higher. I don't think it's possible for yields to shoot higher because the fed owns too many UST's.

Mon, 06/16/2014 - 16:19 | 4862552 Panafrican Funk...
Panafrican Funktron Robot's picture

I've been saying this for a good 9 months now, but above 2.5% on the 10 year is a problem, above 3% puts at least one international and one domestic TBTF into fail mode.  IR swaps have created a box that they cannot get out from under without blowing everything up; the erroneous assumption is that the party/counterparty at the individual bank level for IR swaps is as balanced as the overall, ie., you may have heard of the idea "well, the notional is 800 trillion or whatever, but there's only like 25-30 billion of net exposure", which is probably true for the market as a whole, but there are a couple of players who are waaaaaay the fuck one sided on the 10 year staying under 3% (and to a lesser extent, 2.5%), like, so one sided that the 10 year being above 3% for more than a couple of weeks would literally break them in half over the knee of a fucking giant.  

Ergo, there is exactly one play left for the Fed and ECB, and that play is exactly the same as what Japan has had in front of them for over a decade.  "Keep benchmark yields low or we push the button".  

Mon, 06/16/2014 - 17:43 | 4862846 ThroxxOfVron
ThroxxOfVron's picture

The FED have themselves sold IR Swaps.

Ask yourself WHO the FED sold the IR Swaps to and WHY.

It's a TWO TIERED Market.  

Selective Defaults/Haircuts are being engineered at the FED.   -As was the case with Sovereign Bonds in Europe.   -As was the case in the fraudulent GM 'bankruptcy'.   -As is presently being contrived/devised concerning Argentina Sovereigns -and kaput Austrian Bank Juniors...

Not everyone is powerless to fight back.  Gazprom's demand of full payment for the Ukraininan Gas bill and pre-payment for future flow through to the EU is Russia's retort to the Cypriot Banking bail-in theft.   WHo gives a fuck about sanctions and gates if the damned contracts and laws are gonna just get broken without recourse?

Mon, 06/16/2014 - 18:58 | 4863118 Fish Gone Bad
Fish Gone Bad's picture

the damned contracts and laws are gonna just get broken without recourse

Rules, contracts and laws only apply to OTHER people.  You know, the people who some kind of enforcement action can be done against them and they can't fight back.

Mon, 06/16/2014 - 21:41 | 4863645 MrSteve
MrSteve's picture

this just puts the icing on top of the old rule about bonds being guaranteed certificates of confiscation.

Mon, 06/16/2014 - 16:24 | 4862567 JR
JR's picture

A bigger gate... or knock the wall down.

Because when they are shooting at you and you see them locking the doors it’s time to turn defensive-running into offense.

Is this the last round-up, herding first the savers and retirees into the corral called risk; not enough cattle in the risk markets so let's add the 401(k)s (the dotcom massacre) and the home buyers (the housing bust) and now we need the bond holders to put their money in the risk corral.

If this weren't bad enough in the corral they call the market, the top rustlers await with their HFT machines.

Mon, 06/16/2014 - 18:52 | 4863108 Kirk2NCC1701
Kirk2NCC1701's picture

I see dead sheeple.  A sheep and his fleece are soon parted.

Mon, 06/16/2014 - 18:53 | 4863110 Kirk2NCC1701
Kirk2NCC1701's picture

That flocking guy is all hat an no cattle.

Mon, 06/16/2014 - 21:41 | 4863643 JJdog
JJdog's picture

They desert to lose money if they are still this clueless and have money in Bonds and stocks. put the fee up for 20%, F them!

Tue, 06/17/2014 - 13:54 | 4865869 screw face
screw face's picture

+1

"we're gonna shut them gates pretty cockeyed quick"....bitchez

Mon, 06/16/2014 - 15:43 | 4862407 alien-IQ
alien-IQ's picture

some market participants are more free than others.

Mon, 06/16/2014 - 15:43 | 4862408 ZerOhead
ZerOhead's picture

I wonder what the necessary exit fee would have been in the fall of 2008 if the Fed hadn't stepped in to save the banks... 10%... 50%?

Mon, 06/16/2014 - 15:45 | 4862416 IridiumRebel
IridiumRebel's picture

What are these things? I've only heard about them...

Mon, 06/16/2014 - 18:15 | 4862979 rubiconsolutions
rubiconsolutions's picture

There's already a steep "exit fee". It's called going to the market to buy groceries or the gas station to pump gas. Money "exits" from my wallet at a fairly high rate. 

Tue, 06/17/2014 - 10:15 | 4864809 Franktastic
Franktastic's picture

which would explain a tailspin in the retail stores...sorry keeping the old jeans and patching em, need the money for food n fuel.

Mon, 06/16/2014 - 20:03 | 4863330 Kirk2NCC1701
Kirk2NCC1701's picture

<-- US = Free Markets. Free Enterprise.
<-- US = Free Banksters, FSA

Mon, 06/16/2014 - 21:39 | 4863641 mt paul
mt paul's picture

wasn't there an executive order back in 2008 or 2009

pertaining to money market withdraws 

some thing along the lines of 

we can stop or limit MM withdraws any time 

necessary for national defense or economic crisis

blah blah blah i paraphrase ..

Mon, 06/16/2014 - 15:39 | 4862376 Jason T
Jason T's picture

2015.75 Sovereign Debt Crisis Big Bang 

- Martin Armstrong's computer circa 1998

Mon, 06/16/2014 - 15:45 | 4862415 CrashisOptimistic
CrashisOptimistic's picture

Sounds like someone at FT shorted bonds in January and is getting their teeth smashed by 2.6%.

Mon, 06/16/2014 - 15:51 | 4862452 DoChenRollingBearing
DoChenRollingBearing's picture

Amateur Investor Bearing Guy is happy to have lost very little in options (long ago).  And nothing by going short.  Going short is best left to pros, not punters.

Mon, 06/16/2014 - 15:39 | 4862380 AccreditedEYE
AccreditedEYE's picture

European markets don't seem to me to be at all concerned with NIRP. If they were really upset, you would know it.

Mon, 06/16/2014 - 15:40 | 4862387 Shizzmoney
Shizzmoney's picture

And so it begins

I'm telling you, bonds is the next mega bubble.  No country will be safe.  

Mon, 06/16/2014 - 15:54 | 4862463 MeMongo
MeMongo's picture

Mongo knows it's time to get out when he saw two janitors in the break room discussing how they have their money positioned in the market. 401 k's and such!

Mon, 06/16/2014 - 18:16 | 4862981 Terminus C
Terminus C's picture

Were you one of the janitors?

Mon, 06/16/2014 - 18:45 | 4863081 MeMongo
MeMongo's picture

Haha! Someone has to clean those little asian footprints off of the toilet seats! Where Mongo works those funny little people are bizarrely phobic! No squatting.

Mon, 06/16/2014 - 15:40 | 4862388 disabledvet
disabledvet's picture

"It was when Bank One went to Zero."

Cleveland will be obliterated.

Mon, 06/16/2014 - 15:44 | 4862412 IridiumRebel
IridiumRebel's picture

Cleveland...like Detroit, Stockton, Bridgeport, Gary and numerous other cities, is already obliterated.

Mon, 06/16/2014 - 16:02 | 4862495 Pee Wee
Pee Wee's picture

The ruins are still there but the money was laundered in Manhattan.

This is the only option on the table for middle America et al.

Mon, 06/16/2014 - 16:29 | 4862593 disabledvet
disabledvet's picture

You don't understand. "There are two Clevelands." Absolutely...there is "the City formerly known as Cleveland." But there is also "The Bank called Cleveland."

You can get a contagion which can quickly spread to Your Other Cities.

To prevent that seems to me...granted I'm lacking in info here..."under no circumstance can you slam the door in the bond market's face."

I mean if we have a second recession here...so what?

You have a safety net now. (Unlike 1937/38) Since the treasury market is working just fine and there doesn't seem to be a problem with the transfer payments...unless of course there is a problem of another shot of inflation.

In other words "if it ain't broke don't fix it."

Mon, 06/16/2014 - 15:40 | 4862392 Dre4dwolf
Dre4dwolf's picture

they are trying to fence everyone in so only the insiders and banksters can exit and leave the idiots holding the empty bag

Mon, 06/16/2014 - 15:53 | 4862458 disabledvet
disabledvet's picture

I agree with this..."compartmentalization." But that still doesn't mean it makes any sense. "Moltke the Younger." (Bad plans only become worse in practice.)

So you slam the door in the face of bond holders.

And then what?

I mean are we talking like ten buyers here? WTF?

The Banks are sitting on a MOUNT EVEREST of cash. Policy holders appear to be doing well. That type of income stream looks safe.

Then again AIG...

Mon, 06/16/2014 - 16:06 | 4862512 seek
seek's picture

It still makes sense, the issue is it makes sense over progressively shorter and shorter time frames to fewer and fewer people as they progressively lose investors to throw under the bus.

You'll see this type of thing happen faster and with more over the top approaches as we circle the drain before the final boom. The fact that we're seeing things that are as WTF as they are here is just demonstrating it's not much longer.

Mon, 06/16/2014 - 16:38 | 4862616 disabledvet
disabledvet's picture

Then President George W Bush exclaimed "a phucking insurance company?!!!" (AIG.)

That cost the taxpayer 185 BILLION DOLARES.

I fail to see a "military/industrial complex" here...but instead "a big, fat, phucking LIE."

Of what consequence is it to the taxpayer that Hank Phucking GREENBERG paid some stupid phuck 100 MILLION DOLARES to blow up "his company"?

I say THIS IS NOT A TAXPAYER MATTER AND YOU SHOULD TAKE IT OUT OF THE FOREIGN AID BUDGET.

It's not like this was going on in the USA..."but in super secret in London."

That says to me that this was knowingly criminal...and, well...gee, "what a surprise! The London Whale!"

Mon, 06/16/2014 - 17:38 | 4862850 seek
seek's picture

Of course it was knowingly criminal. The whole system is knowingly criminal. Foreign aid isn't foreign aid, it's a discretionary spending account for TPTB to line their own pockets and grease the palms of useful idiots.

This isn't a taxpayer v. bank issue. It's TPTB v. everyone else, banks, taxes, bailouts -- all tools they use to steal from everyone else. National boundaries and governments are at best paper-bound distinction to these fat cats.

Mon, 06/16/2014 - 17:49 | 4862888 Dre4dwolf
Dre4dwolf's picture

hahahaha and Poor Hillary Clinton "broke" after leaving the white house, with "12 million in debt" psshhh  oooo how could they ever manage??? I mean Clinton was only making 500,000$ per speaking event. . . how hard they had it, they had to do a whole 24 speaking events to pay off 12 million dollars . . . . fucking tool bags.

Tue, 06/17/2014 - 01:02 | 4864070 Nick Jihad
Nick Jihad's picture

Never thot I'd be defending Hillary, but you are comparing pretax dollars (speaking fees) to after-tax dollars (debt), and speaking fees are not tax-favored income.  Figure 20-24 million on speaking fees to pay off 12 millon of debt. Are there really 48 organizations willing and able to pay $500K to listen to Hillary(!) speak?

Wed, 06/18/2014 - 19:39 | 4871631 MeelionDollerBogus
MeelionDollerBogus's picture

Sounds to me like state pension funds wouldn't want to left out of all the hot fuckery - and will dump all their money in.
Wouldn't want retirees getting their money too early or up to the amounts promised, now would we?

Tue, 06/17/2014 - 10:18 | 4864839 Franktastic
Franktastic's picture

ahhh, the ol Enron maneuver, works like a charm.

Wed, 06/18/2014 - 19:29 | 4871595 MeelionDollerBogus
MeelionDollerBogus's picture

Just like bitcoin.

Mon, 06/16/2014 - 15:41 | 4862394 youngman
youngman's picture

to even think this stuff up is enough.....boy they are in deep doo doo....at least they seem to know it now

Mon, 06/16/2014 - 15:41 | 4862396 AlmostUncirculated
AlmostUncirculated's picture

This should be "on top", so to speak.

Mon, 06/16/2014 - 15:42 | 4862398 alien-IQ
alien-IQ's picture

Exit Fees to Exit Bonds?

Has there ever been a better example of how utterly fucked up and manipulated the "market" has become?

What's next? Exit fees to leave the bathroom after taking a piss?

Mon, 06/16/2014 - 15:56 | 4862474 Colonel Klink
Colonel Klink's picture

"What's next? Exit fees to leave the bathroom after taking a piss?"

I believe the correct market term is "dump"!

Mon, 06/16/2014 - 16:30 | 4862595 Emergency Ward
Emergency Ward's picture

It is "dump" but they piss on you on your way out.

Mon, 06/16/2014 - 16:50 | 4862666 Colonel Klink
Colonel Klink's picture

Same as it ever was...

Mon, 06/16/2014 - 16:01 | 4862494 Citxmech
Citxmech's picture

Hey, stop giving them ideas. . . 

Mon, 06/16/2014 - 16:32 | 4862603 deKevelioc
deKevelioc's picture

Yes, it's done in Indonesia and the Philippines all the time.

Mon, 06/16/2014 - 16:48 | 4862659 shitco.in
shitco.in's picture

In Switzerland they charge 1-2 CHF to use the bathroom.  Seems ironic that number 1 costs 1 CHF and number 2 costs 2 CHF. 

Mon, 06/16/2014 - 17:37 | 4862845 mayhem_korner
mayhem_korner's picture

What's next? Exit fees to leave the bathroom after taking a piss?

 

Ever been to Charlotte-Douglas airport?

Mon, 06/16/2014 - 18:36 | 4863047 WmMcK
WmMcK's picture

Charlie handed in his dime at the Kendall Square station
And he changed for Jamaica Plain
When he got there the conductor told him, "One more nickel"
Charlie couldn't get off of that train

Kingston Trio - M.T.A. Lyrics

Mon, 06/16/2014 - 15:44 | 4862410 RaceToTheBottom
RaceToTheBottom's picture

Entrance fees;

Exit fees;

Progressive taxes;

Sell the National Parks;

It's all for the children....

Mon, 06/16/2014 - 15:47 | 4862426 alien-IQ
alien-IQ's picture

yeah...Jamie Dimon's children. Because, let's face it, they're the only "children" that benefit from this farce.

Mon, 06/16/2014 - 16:03 | 4862499 Pee Wee
Pee Wee's picture

Jamie Dimon's children can fight their own fights, there won't be anybody else left.

 

Tue, 06/17/2014 - 05:31 | 4864225 CuttingEdge
CuttingEdge's picture

Biggest problem for Dimon's kids is the whole (informed) world and his grandfather think their dad is a cunt, and no amount of wealth will take that away. Hate to live with that shitstain's rep hanging over me all my life.

Wed, 06/18/2014 - 19:25 | 4871576 MeelionDollerBogus
MeelionDollerBogus's picture

You forgot the fee-processing fee!

Mon, 06/16/2014 - 15:48 | 4862435 valley chick
valley chick's picture

If you don't hold it, you don't own it. 

Mon, 06/16/2014 - 15:48 | 4862439 Dr. Engali
Dr. Engali's picture

Damn and that MyRa idea sounded sooooo good too.

Mon, 06/16/2014 - 15:49 | 4862441 youngman
youngman's picture

Here these guys sit as sor t of the head of the Market.....a free market..or so its supposed to be...but then someone comes up with this idea...and they all have group think and think its a good idea.....WTF....are they really that out of touch..or that stupid....they know that this will destroy the myth of a free market....as they have been for the last 5 years....whatever..

Mon, 06/16/2014 - 15:51 | 4862446 Bemused Observer
Bemused Observer's picture

You gotta wonder why anyone with a working brain would voluntarily keep their money in ANY of these markets...it's kinda like handing your drug-addicted, alcoholic brother-in-law your last 20 bucks and expecting him to bring home milk and eggs...

Mon, 06/16/2014 - 16:12 | 4862465 Pee Wee
Pee Wee's picture

SMART MONEY HASN'T TOUCHED FINANCE IN 5 YEARS!

Mon, 06/16/2014 - 15:54 | 4862468 Colonel Klink
Colonel Klink's picture

Jesus Christ why don't they just lock the fucking doors?  Oh that's right, it's next.

Mon, 06/16/2014 - 16:33 | 4862608 headhunt
headhunt's picture

That is when the sheeple realize they are now officially a comrade of the communist state

Mon, 06/16/2014 - 15:55 | 4862471 ebworthen
ebworthen's picture

Why are morality and ethics never a part of these FED conversations?

"We have to do X because of y" but never "should we do this and what are the consequences?"

They can talk all they want and Fidelity can run retirment commercials all day but they won't restore trust.

Mon, 06/16/2014 - 16:10 | 4862507 Pee Wee
Pee Wee's picture

Because only the innocent pay for moral and ethical mistakes.  Just ask the bees.

Mon, 06/16/2014 - 16:26 | 4862579 NotApplicable
NotApplicable's picture

Because they're criminals, that's why. There are no mistakes being made here.

EVERYTHING is proceeding according to Plan A. (which is, break everything in your way, while taking what's valuable)

Mon, 06/16/2014 - 16:32 | 4862606 headhunt
headhunt's picture

They justify it with 'for the greater good' - of course that is their own greater good.

Mon, 06/16/2014 - 16:52 | 4862679 cherry picker
cherry picker's picture

It is said, "In God We Trust"

We forget, that God also created evil, or so it is written.

In this world, we are fortunate to find a balance, unfortunately, right now it seems the pendulum is swinging to the evil side.

Mon, 06/16/2014 - 22:55 | 4863847 techstrategy
techstrategy's picture

They have permanently destroyed trust, which is why none of their traps, like this one trying to compel bond investors into scam stocks, will work.  They been engaged in glorified theft for so long, they don't realize that people have developed a subconscious understanding that the Fed and Wall Street are always trying to either skim from you or sell you what they are trying to dump...

Wed, 06/18/2014 - 15:24 | 4870680 MeelionDollerBogus
MeelionDollerBogus's picture

You're confusing 'morality' with 'moarality!'

Mon, 06/16/2014 - 15:56 | 4862472 Let The Wurlitz...
Let The Wurlitzer Play's picture

If a worthless bond falls tozero does it make a noise?

Mon, 06/16/2014 - 15:57 | 4862480 alien-IQ
alien-IQ's picture

No...but you still have to pay an exit fee.

Mon, 06/16/2014 - 15:56 | 4862473 HamRove
HamRove's picture

I think secretly....some investors love it in the back door.

Mon, 06/16/2014 - 16:00 | 4862488 Yen Cross
Yen Cross's picture

    When this bastard lovechild of Chairsatan & Mr. Yellen blows the only thing long retail investors are going to be is Rope & Pitchforks...

   If investors were to liquidate bond funds for fear of exit fees who do you think would be on the "buy side" of those transactions? The fucking scumbags at Maiden Lane, that's who.

Mon, 06/16/2014 - 16:04 | 4862506 fonzannoon
fonzannoon's picture

thats exactly right. I said the same above. Those fees are there to get that money to move, not prevent it.

Mon, 06/16/2014 - 18:02 | 4862939 Miffed Microbio...
Miffed Microbiologist's picture

Gosh I hope so Yen. The people I know who are heavily invested in stocks are the professionals of the upper middle class. They drive nice cars, live in McMansions and run about 58-62 years in age. One spouse often has a fat government pension waiting in the wings.

They truly don't know what will hit them and are not the pitchfork-wielding type. It will be interesting to see how they deal with this. None,I am familiar, are remotely into prepping or a sustainable life style. I wouldn't be surprised if some just laid down and starved.

Miffed;-)

Tue, 06/17/2014 - 01:12 | 4864079 Nick Jihad
Nick Jihad's picture

Those public sector pension plans are going to suffer when this bubble bursts. Illinois and New Jersey are basically refusing to fund their public pensions now, even before the shitstorm commences.

Wed, 06/18/2014 - 14:53 | 4870539 MeelionDollerBogus
MeelionDollerBogus's picture

So whoever is running ticker GLTN manufacturing guillotine blades, no takers, only ropes & pitchforks?

Mon, 06/16/2014 - 16:00 | 4862489 GooseShtepping Moron
GooseShtepping Moron's picture

One of the main problems with manipulated markets is that the manipulation takes no notice of events outside the economists' field of view. When econometric data becomes a substitute for reality, and when even the data itself is manipulated, then clearly no realistic policy can be forthcoming.

Mon, 06/16/2014 - 16:08 | 4862517 Citxmech
Citxmech's picture

I think the main problem with "manipulated markets" is that they are not "markets" - by definition. 

Mon, 06/16/2014 - 17:01 | 4862708 GooseShtepping Moron
GooseShtepping Moron's picture

In the real world there is no such thing as a perfectly unmanipulated market. A free market is a theoretical construct that will not survive its first real transaction. And this is a good thing, for life is essentially political in nature, not economic. Politics is stronger than economics in the determination of the world. However, economic and other realities do set a practical limit to how much manipulation a market will bear before it breaks.

In the comment above I was alluding to the fact that economists today have transgressed those limits because they now see their own economic data as a world unto itself which either adequately represents or even supercedes the real world. In fact it does neither.

Mon, 06/16/2014 - 16:05 | 4862508 Sean7k
Sean7k's picture

Well, since most wealthy people have bonds and use them as a steady source of income, especially tax free bonds, could this be a way to keep the value of bonds stable in the case there is a run on bonds? I'm sure the wealthy class would hate to have their premier asset lose value...

Tue, 06/17/2014 - 01:16 | 4864085 Nick Jihad
Nick Jihad's picture

The hold-to-maturity types are not so concerned with the ups and downs of market value. Of course, when you're in a mutual fund, it may not matter so much what your personal time horizon is.

Mon, 06/16/2014 - 16:05 | 4862510 Handful of Dust
Handful of Dust's picture

"It's like shoot'n fish in a barrel," Grampa used to say.

Mon, 06/16/2014 - 17:20 | 4862788 sosoome
sosoome's picture

No need to ruin a perfectly good barrel. Just drain it and watch the fish jump around.

Mon, 06/16/2014 - 16:05 | 4862511 gdiamond22
gdiamond22's picture

Thanks for the sell signal, .gov

Mon, 06/16/2014 - 16:28 | 4862582 Emergency Ward
Emergency Ward's picture

Next month they will reverse course.  Ha ha ha ha, they will laugh.

Mon, 06/16/2014 - 16:57 | 4862703 machineh
machineh's picture

If you don't know who is the Judas sheep leading the others to the slaughter -- IT'S YOU! -- Uncle Warren

Mon, 06/16/2014 - 20:56 | 4863485 litemine
litemine's picture

Ok.....this is a question following this thread.

When you buy a stock, (knowing that the Company is sound) you purchase a percentage ( small as it is) and as long as that company produces something in demand no matter what you still own that percentage of that company. The SHF the economy fails and facebook/twitter all fail. you lost your investment . But holding say a factory that produces copper wire. Copper may have cycles but it should always hold value? That is what I see, those who invest in the market take you chances research what you own then hold? This to me will store some value keeping a small piece out of the BANKERS/FEDS hands.    Food production is like that but the PTB are all over that like Monsanto which the IMF forces down all other Countries Throat including the USA.  The control they have......talk about a Dumded down Population as still many join the American Mercinary Army to be Enforcers................Fubar.............We shall see.    Snowden tried to warn......The flag waving got in the way of TRUTH. 

Tue, 06/17/2014 - 03:08 | 4864155 Cthonic
Cthonic's picture

  " But holding say a factory that produces copper wire.  "

Your small 'ownership' share.  Yes let's talk about that.  You'll have zero influence with the board, so no control over timing or amount of any dividend payouts.  Management won't give you any material information about the state of the business or otherwise give a shit about you, only caring to hit what targets are necessary to get their options to pay off, or some crisp new options awarded by the board at a much much lower basis.  You won't be able to organize shareholder activism with other owners without spending stupendous amounts of cash to find them.  Your legal fees will be out of pocket, theirs will be a corporate expense.  If times are rough, the management team and board may play some inside ball and do some dubious borrowing, sweatheart asset sales to controlled entities, or seriously dilute your shares with a secondary equity offering.   If they go bankrupt, creditors and lawyers get first dibs on any proceeds, which there probably won't be any, seeing no one will want an outdated copper wire factory with depreciated & unmaintained equipment, property tax liens and a hostile local workforce.  Face it, most people don't own shares, they rent them.  The difference between a typical 'investor' and a trader is duration.  Unless a shareholder possesses the wherewithal to organize a private buyout of the underlying, they'd be delusional to consider themselves an 'owner'.

Tue, 06/17/2014 - 03:27 | 4864173 supermaxedout
supermaxedout's picture

absolute correct

Mon, 06/16/2014 - 16:12 | 4862520 SgtShaftoe
SgtShaftoe's picture

Their efforts to mitigate a disaster virtually guarantee one.  These fucking jackasses are so drunk on their own power, they think they're infallable, but will find out soon enough how wrong they really are. 

Mon, 06/16/2014 - 18:01 | 4862540 SheepDog-One
SheepDog-One's picture

Oh it's all good, well unless anything happens or you want out, then we're going to have to take our pound of flesh.

Mon, 06/16/2014 - 16:25 | 4862574 Emergency Ward
Emergency Ward's picture

"Federal Reserve officials have discussed imposing exit fees on bond funds to avert a potential run by investors..."

Wouldn't that cause a run?  Maybe, but I don't have a Princeton PHD so what the fuck do I know?

Mon, 06/16/2014 - 17:03 | 4862738 Citxmech
Citxmech's picture

It's pretty sad when the scripted narrative doesn't even make internal sense.  

Kinda like the talking heads on the news trying to explain why we are talking about fighting ISIS in Iraq, a supposed enemy of Iran and Syria, but at the same time, training and arming ISIS in Syria against Assad. . .

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