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Nothing For Money As Strips Aren't Free

Tyler Durden's picture


The US Treasury just issued $30bn four-week bills once again at the outstanding rate of 0.00000% as the bid-to-cover did drop a little from last week but remains on the same longer-term upward path of the last three years. This is not anomalous, as we see below, that all T-Bills out to 12/15/11 currently offer a negative rate - with most notably the very short-term (less than one week) charging even more to store your money (1.5bps to store our money in T-Bills for 1 week). The buyside demand declined as dealers dominated the bidding with almost $120bn and Direct bidders saw the lowest takedown since Jan10 on a relatively low bid size.

The short-end of the Strips curve also (as you would expect) is negative with Nov11 -3.6bps! Nothing to see here, move along (especially as the Fed is supposedly selling the short-end to buy the long-end). We also note that short-term Euro commercial CP rates are popping with USD rates rising faster than EUR (everyone wants them dollars).

Chart: Bloomberg


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Tue, 10/04/2011 - 12:01 | 1737399 GeneMarchbanks
GeneMarchbanks's picture

What's the half-life on this dollar safety? A month at most...

Tue, 10/04/2011 - 12:04 | 1737428 mayhem_korner
mayhem_korner's picture

Where o where are the sheep to go?

Tue, 10/04/2011 - 12:24 | 1737533 malusDiaz
malusDiaz's picture



100$ per per person... empties all the change in the country!


-100$ brick of nickels.... 97$!~

-100$ brick of pennies... 50$!  (thats for the zinc ones, 200$ for copper!)



There is only 98$ of pennies, nickels, dimes, and quarters per person in the U.S.A from 1964 till now printed:



Want real change... buy some fucking change then and spread the word. 

Tue, 10/04/2011 - 14:02 | 1737933 æther
æther's picture

By your own link, I calculate $131.75 / person (307 mm people per the goog.).

Tue, 10/04/2011 - 13:18 | 1737759 Panafrican Funk...
Panafrican Funktron Robot's picture

It's almost as if there's a whole bunch of institutional investors and market makers that are predicting an imminent need for substantial free cash flow and equivalents.  Funny how there's been this "cash on the sidelines" that has provided some mystical valuation floor by which to justify a equity market ramp, when the "cash on the sidelines" is really "cash to avoid ceasing to exist as an entity".  

Ah, but I'm sure some manner of magic spell will cure it all.  After all, as one fellow likes to say, we must protect the "boring world we live in" meme.   

Tue, 10/04/2011 - 12:00 | 1737402 fuu
fuu's picture

<bravo> on the headline.

Tue, 10/04/2011 - 12:01 | 1737405 tekhneek
tekhneek's picture

Someone explain this to me, please, this just seems impossible?

Tue, 10/04/2011 - 12:29 | 1737551 Ghordius
Ghordius's picture

well put, LOL

after reading the article I realized it explained a lot about my long term relationships

Tue, 10/04/2011 - 12:04 | 1737422 LongBallsShortBrains
LongBallsShortBrains's picture

Somebenny doesn't care about return.

Tue, 10/04/2011 - 12:05 | 1737436 NotApplicable
NotApplicable's picture

Demand for return of capital has surpassed demand for return on capital.

A.K.A. shit's broken and everyone wants a lifeboat.

Tue, 10/04/2011 - 12:16 | 1737492 tekhneek
tekhneek's picture

We're fucked.

Tue, 10/04/2011 - 12:16 | 1737499 juggalo1
juggalo1's picture

That's why I don't understand how gold and silver aren't going even higher.  The yields on all bonds are so low right now, that it is hard to believe that inflation / default won't ruin them.  How can you opt for a negative return on 3 month money rather than a theoretical zero return on gold, silver, lumps of coal etc.  Economists criticize gold as a barbarous relic because it produces no income or capital growth.  Well, at least it doesn't come with a negative coupon.  Even if the long bonds are not negative they are still bizarro.  2% to lock up money for 10 years? Are you serious?

Tue, 10/04/2011 - 12:22 | 1737528 john39
john39's picture

big pensions etc are not going to buy gold, especially with the recent price flucuations...    thanks to the cabal, they just don't see that as a defensible option.    in the end, it will cost them dearly.

Tue, 10/04/2011 - 12:23 | 1737531 GeneMarchbanks
GeneMarchbanks's picture

They are going higher, you have an extremely short term sense of time.

Tue, 10/04/2011 - 12:41 | 1737606 Oh regional Indian
Oh regional Indian's picture

But on a long enough time-line etc.... eh? 

It will be a very interesting choice for PM bugs when the time comes to convert their midas piles into earth and water and shelter. Post-Apocalypto. Or during. 

Or now, like I'm faced with a sell-phys pressure when it's down down.

A fascinating practice in release.


I Got Hoaxed

Tue, 10/04/2011 - 13:24 | 1737782 Panafrican Funk...
Panafrican Funktron Robot's picture

It's pretty well known on this board that gold is complimentary to basic essentials, not a replacement.  You've been around here long enough to know better than to post this.  Seriously, this comment is roughly as dumb as the "can't eat gold" crowd.  You can't eat AAPL either.  FRN's, also not particularly nutritious.  Last I checked, my bond prospectii are pretty much only good for starting fires.  Gold is a store of wealth and the only hedge against stupid.  The entirety of human history tends to point to continued stupidity.  I would imagine you encounter this truth enough in your daily life to see this plainly.  

Tue, 10/04/2011 - 13:53 | 1737899 Oh regional Indian
Oh regional Indian's picture

having been around long enough does not mean I subscribe to groupthink or your superciliously pedantic point/tone.

And perhaps you and the lemming junkers above missed my point completely anyways.


Tue, 10/04/2011 - 12:33 | 1737568 TruthInSunshine
TruthInSunshine's picture

The Bernanke

He's our man

If he can't break markets

No one can!



Tue, 10/04/2011 - 12:52 | 1737650 jm
jm's picture

This is the safest place to put your money and get it back.  Think currency appreciation as source of return.


Tue, 10/04/2011 - 18:45 | 1739376 ZeroPower
ZeroPower's picture

Absolutely. It fails me how some peole don't factor in a rising USD = alpha. And even moreso if youd, gun to head, have to choose another currency. Which one do you choose? CHF and JPY are officially being manipulated, AUD and CAD are too risk-on, and the EUR is quite possibly the biggest POS i just named.


Tue, 10/04/2011 - 12:01 | 1737409 NotApplicable
NotApplicable's picture

Take my money, please!

Tue, 10/04/2011 - 12:01 | 1737410 tmosley
tmosley's picture

Dollars are so worthless, the government won't even pay you to borrow them.


Tue, 10/04/2011 - 12:04 | 1737424 LRC Fan
LRC Fan's picture

Remember when you said that all the physical silver would be gone a few months back?  And how wrong you've been? 

Tue, 10/04/2011 - 12:13 | 1737480 tmosley
tmosley's picture

Hi troll.

I said that physical silver would disappear as the spot price approached zero in extremely high volatility.  We aren't there yet, but stocks are certainly depleted.

But as a troll, you like to make things up about your betters.  Too bad you are such a failure at life that the only thing you can do to feel important is to randomly attack someone with an off-topic jibe about an out of context misquote.

Tue, 10/04/2011 - 12:17 | 1737503 LRC Fan
LRC Fan's picture

Keen insight the price approaches 0 the supply would disappear.  Isn't that true for every single thing that's traded, ever? 

*BMWs will disappear as the price approaches 0

*Bacon will disappear as the price approaches 0

and everything else.  You're pointing out basic fucking econ 101 and trying to pass it off as some grand observation.  Nice work. 

And there is PLENTY of physical silver available.  I live in a not-so-large city and have lots of local coin dealers with tons of inventory, plus APMEX has monster boxes in stock now. 

Someone answer me this question.  What happens if/when the USD fails and the powers that be simply institute a brand new, fiat currency?  Would anything really change for people who hold gold and silver?  The vast, vast majority of people will simply do what they're told and just use the new paper currency and continue to not give a fuck about gold, paper or physical. 

Tue, 10/04/2011 - 12:32 | 1737565 tmosley
tmosley's picture

Uhh, yeah, that's the point.  But you can't get to zero without non-economic actors in the space, ie supression efforts.  And further, the fact is that as spot approaches zero, the price for physical skyrockets.  Premiums are up a dollar over the last month even in no-name silver products.  It wasn't that long ago that you could get ASEs INDIVIDUALLY for $2.50 over spot, while the no-name stuff was spot+$0.50.

lol, APMEX has ONE monster box for only $4.50 an ounce over spot, tmosley was so wrong!  The shit's everywhere!

Why so butthurt?  Did I anally rape one of your other sock puppets to death or something?

Tue, 10/04/2011 - 12:42 | 1737602 LRC Fan
LRC Fan's picture

Uhhh what?  APMEX has more than 1 monster box.  Ebay has plenty more.  You can buy as much silver as you can fucking handle, yet you run around shouting "physical is running out! Oh noes!"

Also very funny that you constantly post about "worthless fiat" or "worthless dollars" and yet you're making a big deal about a $1 increase in premiums. 

Fiat-so worthless that you bother posting about a $1 fucking increase.  Nice. 

Tue, 10/04/2011 - 12:43 | 1737611 tmosley
tmosley's picture

They have exactly one 2009 monster box.  And you want to talk about the gigantic premiums on ebay?  Are you fucking retarded? (I already know the answer, so no need to waste your time hunting and pecking).

I'm not running around shouting anything.  You are the one who brought it up, not me.

Fail troll fails again.

Tue, 10/04/2011 - 12:49 | 1737636 LRC Fan
LRC Fan's picture

???????????  Where did I mention 2009?  I said there is more than 1 monster box on APMEX.  Look at other years.  Scroll down a bit. 

And premiums are paid in worthless US Dollars so who cares about a few extra bucks right? 

You're just a fucking joke.  You post that silver is running out, but it's still in ample supply.  You post that dollars are worthless, yet you bitch about premiums going up by $1 or $2.  You're pretty much as worthless as Cramer for investment advice. 

Obviously you think silver is fairly priced at $50 or much higher.  So why the fuck would you care if you're paying $37 per coin?  Wouldn't you be happily buying at $38?  $39?  $40?  $45?  Etc.  You're just a blowhard who says shit that isn't true.  If you think silver is worth a lot more, who cares about an extra $1???????????????????  You shouldn't care about an extra $10 per coin, since you think silver is going to the triple digits. 

If the physical market was really a lot tighter you would see 25%+ premiums even on large orders.  Yet you don't.  So shut the fuck up. 

Tue, 10/04/2011 - 12:59 | 1737685 tmosley
tmosley's picture

Boy are you mad.

Also, so stupid you can't tell the difference between the present and future tense.

Tue, 10/04/2011 - 13:45 | 1737866 Panafrican Funk...
Panafrican Funktron Robot's picture

Sorry you lost your shit trading AGQ on margin, LRC Fan.  This is why you don't play paper games.  Bitching about it isn't going to make your digital FRN's magically re-appear.

Tue, 10/04/2011 - 12:35 | 1737581 fuu
fuu's picture

Hi Mako!

Tue, 10/04/2011 - 12:43 | 1737619 LRC Fan
LRC Fan's picture

Anyone actually try to buy physical silver and not been able to fill their order?  Didn't think so....

Tue, 10/04/2011 - 12:46 | 1737627 fuu
fuu's picture

I'm sorry Mako I didn't say anything about availability of anything. I was just saying hi.

Tue, 10/04/2011 - 13:51 | 1737892 daxtonbrown
daxtonbrown's picture

Actually what this is telling us is that some people expect deflation for three months, so your rate of return is a currency bet.

Tue, 10/04/2011 - 12:01 | 1737412 LongBallsShortBrains
LongBallsShortBrains's picture

Pay you to hold my fiat?

Let me think about that one.....

Tue, 10/04/2011 - 12:02 | 1737413 mayhem_korner
mayhem_korner's picture

I'll happily auction off space in my mattress for -0.015.

Tue, 10/04/2011 - 12:03 | 1737418 stormsailor
stormsailor's picture

15 point arb difference between $dji and /es.   its the invisible pump at work.  logic would dictate shorting the /es, but broken market experience tells me to stay long /es.

Tue, 10/04/2011 - 12:06 | 1737440 mayhem_korner
mayhem_korner's picture



Is that a Twisted Logic pin on your uniform?

(Dee Snider says don't be ashamed to +1 this one)  :D

Tue, 10/04/2011 - 12:19 | 1737514 au_bayitch
au_bayitch's picture

 Yes mayhem it is at about 56 seconds into

Tue, 10/04/2011 - 12:20 | 1737519 stormsailor
stormsailor's picture

naturally i sold my long 20 /es position and shorted 20 at 1096.25.  i have double twisted logic

Tue, 10/04/2011 - 12:06 | 1737435 baby_BLYTHE
baby_BLYTHE's picture

Not sure if this was covered yet

Ron Paul said Monday that President Barack Obama’s targeted killing of Anwar al-Awlaki might be an impeachable offense.

Tue, 10/04/2011 - 12:07 | 1737450 NotApplicable
NotApplicable's picture

If not, then what is?

Tue, 10/04/2011 - 12:14 | 1737485 baby_BLYTHE
baby_BLYTHE's picture

It is important to remember Anwar al-Awlaki is a native born United States citizen. With this, Paul is trying to emphasize the fact the Obama is continuing the Bush policy of the Executive ordering the assignation of Americans both here and abroad. No other Republican will bring this up, due to the fact they all marched in lock step with Bush on his warmongering policies. This is an effective strategy to put him out in front of the other candidates. Let us hope the media spin on this is minimal because in terms of the Constitution he is dead-on with this issue.

Tue, 10/04/2011 - 12:26 | 1737537 john39
john39's picture

alwalaki was a character played by actor tony greenberg, courtesy of the CIA.  don't fall for the sock puppet theater.


Tue, 10/04/2011 - 12:24 | 1737532 juggalo1
juggalo1's picture

I'm pretty torn on this issue.  I don't like the king -erm- president having life and death power over any and all subjects located anywhere.  On the other hand the man was a confessed terrorist actively engaging in violence as a confederate of a declared enemy of the US.  I agree that it is ok to kill enemy combatants anywhere and everywhere when capturing them is impracticeable.  They used to have the wanted: dead or alive posters.  For confessed members of active terrorist groups it's open season at all times.  Now obviously great care must be exercised in declaring someone a terrorist wanted dead or alive.  I would be fine with an investigation in that regard, although in the Al Awlaki case it seems pretty open and shut.  I'm not sure what the exact process is for being designated a legitimate target, but it's pretty clear that this guy was one.

Tue, 10/04/2011 - 13:53 | 1737898 Panafrican Funk...
Panafrican Funktron Robot's picture

Yes, clearly, it's the a-rabs with their tur-bans, and another thing, the fuckers don't even eat pork!  Fuckin' terrorizers!

Tue, 10/04/2011 - 12:16 | 1737490 GeneMarchbanks
GeneMarchbanks's picture

Nobody is paying attention at this point so the timing is perfect. Also, I'm not sure I want to hear/see more of Biden.

Tue, 10/04/2011 - 12:47 | 1737630 bill1102inf
bill1102inf's picture

Get the fuck out of here with this bullshit. If Ron Paul were president and he had NOT killed Al_Wacknuts and our citizens were attacked and then we found out about his pussyfication of the Terrorists, well, there would be a LINE at the grassy nole

Tue, 10/04/2011 - 12:59 | 1737686 baby_BLYTHE
baby_BLYTHE's picture

bullshit, eh? SO it's better to compromise on principles to appease a few sheeple? Wipe his ass with the few shreds that remain of our Constitution?

Ron Paul NEVER SAID al-Awlaki was innocent just that it was wrong of Obama to unilaterally murder him abroad without arrest, trial, jury and conviction. There was nothing preventing Obama from taking this Constitutional route. He is just a murderous juvenile little girl like his predecessor

Tue, 10/04/2011 - 12:06 | 1737443 SteveNYC
SteveNYC's picture

"Nothing For Money As Strips Aren't Free"

Brilliant. Reminds me of the ZH classic "For Those About to Swap, We Salute You".

Tue, 10/04/2011 - 12:06 | 1737444 gillimus
gillimus's picture

$2900 to store $1b for a week (think 8 standard pallets of $100 bills).  It would be cheaper to rent a storage space and have your forklifts stack it up.


Disclosure:  Long storage space and forklifts.

Tue, 10/04/2011 - 21:12 | 1739757 Caveman93
Tue, 10/04/2011 - 12:06 | 1737448 TradingJoe
TradingJoe's picture

and we're green on the Nasdaq..again...S&P too :))) happy family :))) what a little iPhone5 release can do to the markets eh! :))) Will be sold off, of course! :)))

Have fun, it's a fun day!

Tue, 10/04/2011 - 12:08 | 1737457 Dapper Dan
Dapper Dan's picture

From July 2011 the POTUS said,


"Let me distinguish between professional politicians and the public at large. You know, the public is not paying close attention to the ins and outs of how a Treasury auction goes. They shouldn’t. They’re worrying about their family, they’re worrying about their jobs. They’re worrying about their neighborhood. They have got a lot of other things on their plate. We’re paid to worry about it."

The arrogance of our leaders know no bounds

Tue, 10/04/2011 - 12:18 | 1737470 Henry Chinaski
Henry Chinaski's picture

more fun with analogies and SAT questions

1.  Matter is to antimatter as money is to ___________?

a. fiat currency

b. US Dollars

c. treasuries (STRIPS)

d. All of the above.

2.  "Metal, as gold or silver coin." is

a. an archaic relic

b. a tradition

c. money

d. an impractical store of weath that doesn't grow your investment

Tue, 10/04/2011 - 13:20 | 1737758 Money 4 Nothing
Money 4 Nothing's picture

Hmm! The MSM tells me all the time along with Bernanki that Gold isn't money, but, why has it doubled in the last few years? Hmm.. but traders are allowed to settle their accounts with it also? Gee, I dunno, that's a tough one!

[Theme music]

Hmm, I am going to go with my gut here Alex and say that would be "Metal, as gold or silver coin." is... Ummm, Oh! C! Money Alex!


Thaaaat is correct Johney! Don't let that peskie Fed fool ya! Good for $3,600.. Your right!

Tue, 10/04/2011 - 13:42 | 1737849 gillimus
gillimus's picture

antimoney. duh.

Tue, 10/04/2011 - 12:13 | 1737481 LRC Fan
LRC Fan's picture

Everyone who has extra, "worthless" dollars can send them to me.  I will put them to good use. 

/not sarc


Tue, 10/04/2011 - 13:49 | 1737882 Saro
Saro's picture

But then what would I burn to heat my house this winter??

Tue, 10/04/2011 - 12:15 | 1737487 ArkansasAngie
ArkansasAngie's picture

Imaginary money making imaginary returns.

Though the threat (as I see it anyway) of Bernanke bailing out banksters through QE3++ is a reach into my pocket. 

I don't think Washington and Wall Street get just how pissed off folks are.  Stealing from Grandma to support Warren B can't be allowed. 

Tue, 10/04/2011 - 12:54 | 1737661 schadenfreude
schadenfreude's picture

But, but, he is your uncle, ya know? He suffered a lot, as his stock went under 100k. For our happy family!

Tue, 10/04/2011 - 12:18 | 1737488 firstdivision
firstdivision's picture

How easy would it be to manipulate the markets through leveraged ETF's?  Watching the volume in some makes me think there is some collusion going on today to force this shit show up.

Tue, 10/04/2011 - 12:30 | 1737548 Quinvarius
Quinvarius's picture

Yeah.  the Fed actually stopped buying the short end.  LOL.  Give me a break.  The only reason to buy this crap is if you believe this stuff is safer than cash in a bank.  Got news for you.  The banks are taking your treasuries down with them into the black hole of counterparty risk as fast as your cash when they die.  If it is a matter of where to store your toilet paper, you need a vault, not government paper of a different type.

Tue, 10/04/2011 - 12:31 | 1737556 swissaustrian
swissaustrian's picture

If people and institutions are too scared to put their money into a bank, why don´t they just move it out of the bank and hold FRNs?

F*ck bank runs, the FED will give them all the liquidity they need.

Tue, 10/04/2011 - 13:09 | 1737725 blindside
blindside's picture

For what reason would someone to buy these at 0% interest?

Someone please enlighten me...

Tue, 10/04/2011 - 13:22 | 1737771 stormsailor
stormsailor's picture

if the someone was the federal reserve buying the t's through their proxies?

they wouldn't care, its nothing but bogus zeros to them anyway.

Tue, 10/04/2011 - 13:47 | 1737874 gillimus
gillimus's picture

Safety.  Risk-off.  The return OF your money is more important than the return ON your money.  US govt debt is still less risky than most.  No trade here, move along.

Tue, 10/04/2011 - 13:59 | 1737917 Panafrican Funk...
Panafrican Funktron Robot's picture

Entities that have cash above the assumed or actual FDIC insurance coverage.  Ie., it's better to make 0% when your "bank" is the US treasury, than when your "bank" is C, BAC, WFC, etc.

Tue, 10/04/2011 - 15:50 | 1738468 Henry Chinaski
Henry Chinaski's picture

It allows you to preserve any cash that you don't have at a slight cost.

Tue, 10/04/2011 - 21:09 | 1739740 Caveman93
Caveman93's picture

In Soviet Russia, you don't own bonds; the bonds own you!

In Soviet Russia, you don't own money; the money owns you!

In Soviet Russia, Gold is not money but tradition.... (Yeah, Ben's right.)

Wed, 10/12/2011 - 12:21 | 1766128 karmete
karmete's picture

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