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Jobs, Puppy Dog Eyes, Buffett, China And Operation Twist

Tyler Durden's picture


From Peter Tchir of TF Market Advisors

Jobs, Puppy Dog Eyes, Buffett, China and Operation Twist

Well, if you were wondering how the President planned to get the Republicans on board, it was by making the speech as much of a tear-jerker as possible.

With a focus on veterans and teachers and children it is clear that how he is going to paint the opposition.  It will be difficult to avoid being painted into a corner as a vote against the job plan will be portrayed as a vote against veterans and children.  Probably smart politics.

I cannot imagine China enjoyed the speech much.  If they are even a tiny bit paranoid, they have to feel a bit picked on.  It started with asking why we can't build new airports, etc., like they can and ended on why they aren't buying our cars.  Maybe it is safe to antagonize China, but I'm not sure we should be irritating our biggest lender.

Am I the only one who is getting uncomfortable with the role Warren Buffett plays?  Will his memoirs be added as an amendment to the constitution?  It is great that he wants to pay more taxes than his secretary, but his unique status does concern me.  It seemed a bit strange that he had a conversation with the President before he made an "investment" in BAC.  It does seem a bit strange, that 17 banks got sued, but Warren's WFC, which owns Wachovia, wasn't sued twice (once for each), because it was already "in settlement negotiations". 

So, will this jobs bill do much?  I don't see how.  Employers get a tax break, but that will likely be used to increase profits, because they remain uncertain of what happens when the breaks end.  No new jobs, and limited new spending.  For the employees - he said an average of $1,500 next year extra in their pocket.  Interesting but when he talks about cutting medicare and social security in the same speech, how much of that will be spent?  I think a lot of that will go into savings to offset future needs.  People making 50k a year aren't so dumb to just take this money and spend it, when they see future benefits getting stripped away.  The $4,000 tax credit for hiring new employees covers about 14 weeks at minimum wage (the sort of job this economy has been able to generate).  Maybe we will see a spike in layoffs ahead of that since it might be a good time to get rid of employees on the fringe, when you can get a free look at his replacement, courtesy of the government.

Another year of unemployment benefits?  Hmmmm.  Some talk about summer jobs for disadvantaged kids next year.  Ummm, that just sounded like a plea for some votes and to spin Republicans against disadvantaged kids. 

He is going to ensure that projects are ready to go and no waste.  Wasn't he going to go through the budget line item by line item?  If anything this seemed like a good way to introduce another czar.  He is fond of czar's and who better to monitor the infrastructure bank than an infrastructure bank czar?  I think this process will get bogged down quickly.

Futures are leaking and I expect after the trio of underwhelming speeches - Trichet's, Bernanke's, and Obama's, that will continue into the morning.  I would like to be long restaurants in DC as the safest bet is that lobbyists will be out in full force to protect loopholes, and to get in line for the food fight of handouts.

The one thing I think that is most interesting is that I believe Obama, Geithner, and Bernanke are working on a plan to show a big budget deficit reduction.  I am beginning to believe that Operation Twist is a stealthy way to reduce the CBO deficit projections and make the country safer.  Many believed QE2 was a stealth way to deflate the dollar and inflate assets and exports.  Since operation twist doesn't increase money supply, and is likely to have much of an impact on the interest rates mere mortals can get, I have been wondering why the focus on shifting to the 10 year point in the curve.

More and more I believe that it is both a way to protect ourselves from a run, but also a way to dramatically reduce the CBO deficit projections.

From 2017 until 2021, the CBO assumes the 3 month t-bill rate is 4.0%   The ten year rate is assumed to be 5.3%.  If we can lock a lot of money into 10 year rates at around 2%, this could be a huge savings on the projections.

Instead of using an average rate over 4%, maybe they will change the average rate to 3%, or lower.  On 12 trillion in net debt, even a 1% savings is $120 billion per annum.  I just started looking at the numbers, so have to figure out in more detail what the net debt is in the future and the interest rate used, but  I think these guys actually have a plan.  A plan that makes sense.  One of the few areas the CBO seems to be honest on in their projections was the future cost of debt.  The Fed could always control the short end, but it is hard to assume zero for that, but if the treasury and fed work together to lock in a lot of longer duration financing, it could change the future deficit picture materially.  I will have to play with the numbers from the CBO more closely, but this couldactually be a positive surprise to the budget picture.  In the meantime, GO PACKERS!


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Thu, 09/08/2011 - 20:43 | 1648854 Taku
Taku's picture

Obama "spend, spend spend spend, spend spend spend spend"

"spend, spend spend spend, spend spend spend spend"


Thu, 09/08/2011 - 20:44 | 1648894 Stack Trace
Stack Trace's picture

Bush "spent, spent spent spent, spent spent spent spent"

"spent, spent spent spent, spent spent spent spent"

"spent, spent spent spent, spent spent spent spent"

Thu, 09/08/2011 - 20:48 | 1648920 Totin
Totin's picture

It took Obama 2.5 years to spend as much as Bush did in 8.

Thu, 09/08/2011 - 20:51 | 1648939 Stack Trace
Stack Trace's picture

It is called inflation and bringing all the debts onto the books. Good try. Both of them and their predecessors were profligate spenders (including Reagan). To think it is a matter of one party being better than another is to be naive in the most extreme.

Thu, 09/08/2011 - 20:57 | 1648974 Taku
Taku's picture

Indeed. Obama was the one talking and behind the podium today.
But yes, D&R both want a piece of you.

Thu, 09/08/2011 - 20:59 | 1648984 spiral_eyes
spiral_eyes's picture

another reason to be bullish on gold, bitchez 

Thu, 09/08/2011 - 21:22 | 1649053 dwdollar
dwdollar's picture

I was able to grab a tank of juice at the 7/11.  First time in awhile.  Just as I was pulling in someone pulled away from the number 4 pump.  Quickly I raced toward and not a second too soon.  A woman in a S-10 pulled in right beside me and parallel.  She seemed pissed.  Walked over toward me as if wanting a confrontation.  Instead she jerked the squeegee out of the cleaner and splashed both of us (intentionally I'm sure).  Surely my 7/11 isn't the only savage convenience store?  I wonder when the last time Pelosi or Boehner had to juice up.  Is that another lobbyist perk?  Free full service refills?  Oh wait...  I doubt they need cars with their jets and all.

The fact I was able to grab a tank of cheap juice without a fight is positive.  I consider this to be a good indication that things are transitorily stable.

Just another day in 2011 America...

Thu, 09/08/2011 - 21:24 | 1649081 MarkD
MarkD's picture

"It took Obama 2.5 years to spend as much as Bush did in 8."

And it took Bush 8 years to spend as much as Clinton, GH Bush, Reagan and Carter did in 22 years.

Republican.......Democrat. Same thing.

Thu, 09/08/2011 - 23:09 | 1649451 snowball777
snowball777's picture

It took Obama 2.5 years to spend as much as Bush did in 8.

Sure, let's pretend there's no difference between voluntary spending on ill-advised wars while cutting the taxes that would pay for them and near involuntary spending to deal with the effects of an economic crisis that could've and should've been handled by the asspony enabling his profiteering crony friends.

Trillions of dollars blown out W's ass and all we got was dead bodies, groped by the TSA, and 16% unemployment.

Fri, 09/09/2011 - 09:18 | 1650287 Are you kidding
Are you kidding's picture

Why didn't Obama stop it all if he's the "good guy"?

Thu, 09/08/2011 - 20:58 | 1648963 Taku
Taku's picture


Thu, 09/08/2011 - 21:15 | 1649038 Accidental Farmer
Accidental Farmer's picture

They both work for the same Banksters. The president always works for the same group. It's like taking the hood ornament off every few years and putting a new one on. There is only one party and they are the Builderburg Group. Presidents are just puppets. They do what they're told to do, and take huge checks for it.

Thu, 09/08/2011 - 21:23 | 1649073 Trimmed Hedge
Trimmed Hedge's picture

Developers, developers, developers, developers...

Thu, 09/08/2011 - 20:40 | 1648867 gwar5
gwar5's picture

More lies and videotape, no sex.


Thu, 09/08/2011 - 21:10 | 1649019 Yes_Questions
Yes_Questions's picture

Jobs bill bans porn?

Thu, 09/08/2011 - 20:41 | 1648871 gwar5
gwar5's picture

More lies and videotape, no sex.


Thu, 09/08/2011 - 20:42 | 1648873 gwar5
gwar5's picture

More lies and videotape, no sex.


Thu, 09/08/2011 - 20:52 | 1648945 Bicycle Repairman
Bicycle Repairman's picture

Did you really want sex?

Thu, 09/08/2011 - 21:13 | 1649028 Accidental Farmer
Accidental Farmer's picture

I would like to see several politicians fucked in the mouth by a gorilla, if that counts.

Thu, 09/08/2011 - 20:42 | 1648881 Robslob
Robslob's picture

When you rely on your government to creat jobs instead of what you produce as a country then you truly get what you deserve.

PS: Government jobs are an "expense" in the GDP column...any accountant should be able to tell you that...

Thu, 09/08/2011 - 20:43 | 1648884 knukles
knukles's picture


Thu, 09/08/2011 - 20:45 | 1648886 Stack Trace
Stack Trace's picture


Thu, 09/08/2011 - 20:44 | 1648888 Rylie
Rylie's picture

In Ontario there was an election promise to give a 10k tax credit to new canadians, hows that for layoff or fire everyone and hire new Canadians? I know of a few business owners that can't wait to let go 10 people and get 100k in tax credits they said that they would do this annualy. 

Thu, 09/08/2011 - 21:00 | 1648990 disabledvet
disabledvet's picture

Do they count Americans towards that?

Thu, 09/08/2011 - 22:34 | 1649379 sleepingbeauty
sleepingbeauty's picture

McGuinty sucks. I hope he finally gets shoved out.


Thu, 09/08/2011 - 20:44 | 1648889 Mike2756
Mike2756's picture

That $1500 is going into rent, food and energy.

Thu, 09/08/2011 - 20:47 | 1648909 dbTX
dbTX's picture

I just hope America has learned her lesson. No more amateur's!

Thu, 09/08/2011 - 20:47 | 1648911 digalert
digalert's picture



Wisdom from marxist ruler Barama:

"you businesses want qualified workers? Well YOU gotta train'em, educate'em. Then we'll have good workers for those million silicon chip jobs..."

Absolut fucking brilliant concept Barama...idiot.

Thu, 09/08/2011 - 22:40 | 1649392 sleepingbeauty
sleepingbeauty's picture

Which part are you objecting to?

I am an engineer and I have found that employers have stopped doing any training. It is crazy that they expect you to know their proprietary software in order to get a job. It just means that they can cut you loose as soon as you've served your purpose and hire software bot 2 to fill the next set of needs.

If you are objecting to the million silicon chip jobs...+1

Thu, 09/08/2011 - 20:48 | 1648917 disabledvet
disabledvet's picture

I was thinking more along the lines of "getting America back to work Act" or "the making work pay act"...but a "jobs bill"? Not that i'm not looking for government work...who isn't...but it's all about government stimulus and I just don't feel like i'm going to win that so called "competitive bidding process for re-roofing Eisenhower Elementary." Anywho here's the video:

this one seems kinda lonely actually.

Thu, 09/08/2011 - 20:49 | 1648924 Stack Trace
Stack Trace's picture

$450 Billion is entirely too small. We needed it to be at least $2 Trillion. That way we could keep this charade of an economy running just long enough to ensure $500,000 oz gold.

Thu, 09/08/2011 - 20:49 | 1648927 nmewn
nmewn's picture

"he said an average of $1,500 next year extra in their pocket."

Almost makes up for the extra ObamaCare premium I got nailed with.

Thanks Barry, Pelosi, Reid...and especially that fucktard Jonathan Gruber at MIT who "modeled" that scam for them.

Fri, 09/09/2011 - 07:01 | 1649944 Waterfallsparkles
Waterfallsparkles's picture

Yet another payroll tax "break" means that they will have contributed less into Social Security and will get less when they retire.  This saves the Government money in the end.

Thu, 09/08/2011 - 20:49 | 1648928 jdelano
jdelano's picture

Stealth nonsense. Plan doa. Repubs will have no shame in Tearing it to pieces. Op twist deficit reduction thesis absurd. For cbo to change average rate, they would have to factor the result of op twist as a permanent fixture--iow, flattened curve in perpetuity or at least very long duration. No plan, more smoke

Thu, 09/08/2011 - 20:52 | 1648941 oogs66
oogs66's picture

the only focus out until 2021, its the idiocy of the system, but it might work in the shell game we call the budget - got to be better than some of the other things they fudge in those reports

Thu, 09/08/2011 - 20:50 | 1648932 Corn1945
Corn1945's picture

I don't think Peter has a solid understanding of how the crooks operate. Any perceived "savings" will quickly be spent again in another boondoggle.

They have no real interest in lowering the deficit. Peter is out to lunch.

Thu, 09/08/2011 - 21:04 | 1649001 disabledvet
disabledvet's picture

I agree. We're now robbing both Peter and Paul to pay for Mary. Soon we'll be robbing Mary, too. Far cry from the message in the music:

Thu, 09/08/2011 - 20:50 | 1648936 spankfish
spankfish's picture

China + Buffet = China Buffet

Thu, 09/08/2011 - 20:54 | 1648960 Bicycle Repairman
Bicycle Repairman's picture

Cold spare ribs ummmmmmm

Thu, 09/08/2011 - 20:52 | 1648942 jackinrichmond
jackinrichmond's picture

moving further out on the yield curve will buy more time, but it still doesn't address the deficit.   where are they going to get $1.4T+ ?

Thu, 09/08/2011 - 21:09 | 1649016 Accidental Farmer
Accidental Farmer's picture

Two words: Printing Press

Thu, 09/08/2011 - 21:26 | 1649094 Yes_Questions
Yes_Questions's picture

Four words:

Bank-Sta Whoo-Oor

Thu, 09/08/2011 - 20:53 | 1648949 ExpendableOne
ExpendableOne's picture

Elect me, I will give you more of the money I took from "them"!

Thu, 09/08/2011 - 20:53 | 1648950 Fedophile
Fedophile's picture

the treasury and fed work together to lock in a lot of longer duration financing

should read the treasury and fed work together to monetize a lot of debt

Thu, 09/08/2011 - 20:53 | 1648953 chump666
chump666's picture

China?  An inflated doomsday bubble is the benchmark?  China will implode before Obama/republicans pass anything.


Thu, 09/08/2011 - 20:54 | 1648958 Stack Trace
Stack Trace's picture

I find the partisanship here amusing and distressing. I thought ZHers were evolved beyond the silly playground antics of partisan politics which is all Kabuki Theater for weak-minded fools.

Thu, 09/08/2011 - 21:08 | 1649012 Accidental Farmer
Accidental Farmer's picture

So true. Haven't all of you ass clowns figured out that Rick Perry has been selected by the Builderburg Group to be the next figure head for the most brutal mafia the world has ever known?

ZeroHedge was way better when you had to multiply negative numbers to submit a post. Now it's becoming a bit troll-heavy.

Thu, 09/08/2011 - 21:26 | 1649095 jdelano
jdelano's picture

Hmm--well I for one am cynical granted, and probably doing more bitching than anything constructive, true. But it isn't really a partisanship issue. I'm an equal opportunity skeptic as I think many others here are. I don't care that obama's a democrat and I don't think bernanke' is part of an all powerful cabal set on global destruction. I think they're both hubristic fools who can't see past their own noses far enough to recognize that their idealism(s) is having a disastrous effect on our future. I think you're also seeing a lot of frustration expressed here due to the fact that a lot of us would like to be more useful but have no idea how to break through the caul of idiocy that most of the nation has cocooned itself in. It's not bernanke's country--he's just a guy--it's ours and it's our responsibility to steer it, but most of America has zero interest in waking up. They dont want sustainability or markets that adhere to fundamentals and reality. They dont want to admit that they were complicit in the leveraged, living beyond our means madness that engendered all this. They just want Ben and O to do a better job keeping the dreamlusion intact and the ponzis running. Party lines make little difference to me--the next pres repub or dem will be just as guilty of peddling b.s. To the nation because that's what he majority wants. How do you penetrate that?

Thu, 09/08/2011 - 23:25 | 1649490 Stack Trace
Stack Trace's picture

I actually resemble your remark! I know the feeling of frustration and skepticism.

Thu, 09/08/2011 - 20:56 | 1648973 riley martini
riley martini's picture

  Behind every Buffet deal is a dirty politician an now we may have found the dirtiest. Oblamer has gotten so dirty since he starting stealing with The Fascist of Omaha one wonders if he was white before they met .

Thu, 09/08/2011 - 20:59 | 1648987 Stack Trace
Stack Trace's picture

Think about the perfection. Obama gets to blame his predecessor for the problems (which has plenty of truth) and then uses that as cover to support his vampire sith-lord Buffet. I can only imagine how sweet the reach-around must be.

Thu, 09/08/2011 - 21:22 | 1649070 Yes_Questions
Yes_Questions's picture




Damn near blood funnel'd him!


RIP Uncle Neil, you would've had your finger on it, and this site too!

Thu, 09/08/2011 - 20:57 | 1648975 Stack Trace
Stack Trace's picture

Don't worry about the Chinese. When this government debt bubble pops, and it will, the dollar will collapse, our society will be in shambles, and the Chinese will move in and pick up the scraps and best real-estate and make us their own personal ass-lickers.

Thu, 09/08/2011 - 21:18 | 1649044 Yes_Questions
Yes_Questions's picture



I wonder what the yield is on the Fed held UST vs. Chinese held.

Or should we just cancel em' all?

Thu, 09/08/2011 - 21:20 | 1649052 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

nee how?, wa shu Ali, slerp,slerp

Thu, 09/08/2011 - 21:18 | 1649047 Yamaha
Yamaha's picture

The funny thing about Buffet is that Fox News had a guy reporting that good Warren is now in court fighting some $1Billion in tax charges.  Has anyone seen this?

Thu, 09/08/2011 - 21:24 | 1649083 buzzsaw99
buzzsaw99's picture

bear flag on the brk chart.

Thu, 09/08/2011 - 22:24 | 1649344 max2205
max2205's picture

They want old people dead and off the rolls ASAP. Prepare to bury your elderly in the next few years as they become destitute and slowly starve to death. That'll help in those CBO projections. Good plan big O and dicklips Ben.

Thu, 09/08/2011 - 22:46 | 1649405 sleepingbeauty
sleepingbeauty's picture

Bring out your dead....I'm not dead...Well, he will be soon, he's very ill.

Fri, 09/09/2011 - 06:51 | 1649918 Waterfallsparkles
Waterfallsparkles's picture

Just think of all they will save by cutting Medicare and Medicade so Granny will die.  That way they save a lot of money for Social Security payments and continued Medicare costs once she is dead NO MORE PAYMENTS FOR HER.


Thu, 09/08/2011 - 22:32 | 1649370 Belarus
Belarus's picture

Dude, not that they should be, but futures are surging big time. We're looking at a 3%+ move for the markets tomorrow and another takedown of paper precious. It's hard to believe but fuck...

Thu, 09/08/2011 - 23:11 | 1649458 Elooie
Elooie's picture

Yep, this is all about pushing yields down. Once the Fed gets them down the Treasury will issue a ton of debt. It has nothing really to do with the economy and is really about financing the government.

Fri, 09/09/2011 - 01:23 | 1649659 dpr10
dpr10's picture

2017-2021????you kidding me is a good piece but i guess he is being sarcastic towards the end on lowering the budget deficit through lower long-term yields for the next decade:::

Fri, 09/09/2011 - 06:44 | 1649909 Waterfallsparkles
Waterfallsparkles's picture

The only Job this is meant to save is HIS.  The 600 Billion is to pay for all of the Golf Club fees, vacations and World Travel by himself and Michelle for another 4 years.

Fri, 09/09/2011 - 08:51 | 1650172 Kestrel_1
Kestrel_1's picture

Timmy on NPR this morning expressing this 'jobs' plan will work in the short term and the long term.  But he belies his trust in it working by also saying small businesses need demand for their he has another excuse if this doesn't work.  He reasoning for why the last 'back to work' plan didn't hold off unemployment from going over 10%?  Economic forces beyond anyone could have predicted.  And this time we need to be agile and diligent and resourceful and it will be fine.  What about criminal charges against those 'economic forces'?  Can't change the game if you don't at least remove the players.

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