This page has been archived and commenting is disabled.

Short-Term Yields Going Negative As BoNY Announces It Will Charge 13 bps Fee On Deposits

Submitted by Tyler Durden on 08/04/2011 11:25 -0400

The stunner in this morning's newsflow (the long, long overdue market collapse which is a much needed catalyst for QE3 should not surprise anyone), comes out of the WSJ which has just reported that the Bank of New York has informed institutional clients it will begin charging a fee of 13 bps on deposits in excess of 110% of the client's monthly average. This is nothing short of outright terrorism to get everyone out of cash and into fiat-based ponzi products. Such as Short Term Bills. Indeed, as was reported earlier the 3 Month bill just hit zero. But you ain't seen nothing yet. As Credit Suisse strategist Ira Jersey reports, courtesy of Bloomberg, "If this is true then we’re likely to see short-end interest rates actually go negative. By what degree depends on who else follows and how much money is involved." Cue unpredictable consequences of a totally broken bond market. What happens next will likely make the market dislocations following Lehman like a breezy walk in the park.

- advertisements -

Thu, 08/04/2011 - 11:27 | 1523919 tmosley

13 bps will start to make people consider moving into physical gold, as the holding costs to cash become similar.

I love the smell of desperation in the morning. Smells like opportunity.

Thu, 08/04/2011 - 11:32 | 1523942 mayhem_korner

13 bps will start to make people consider moving into physical gold

...might make 'em back up the flatbed to load up some ATMs (like port-o-pottys).

Thu, 08/04/2011 - 11:49 | 1523977 Ahmeexnal

Tyler, Swiss banks are already doing this too. Charging a new MONTHLY fee of 30CHF to foreign accounts. Unless you have over 50000CHF.

Those at the bottom are getting robbed.

http://www.ubs.com/1/ShowMedia/ubs_ch/private/accounts?contentId=190195&...

Pricing overview.
Additional charge for domicile abroad
(valid for all individuals above age 20
who are domiciled outside Switzerland
and the Principality of Liechtenstein)

CHF 30 per month (1, 2)
The additional charge will not apply in the following cases:
• Client relationships with total assets booked at UBS in
Switzerland over CHF 50,000 (3)
• Clients who are domiciled in Germany, France, Italy or Austria
if there is a regular monthly salary deposit of at least CHF 500 (4)
• Clients with a UBS numbered account
• Client relationships with UBS retained mail
• Clients with a UBS mortgage or UBS construction loan
• Clients with a UBS mandate solution
• Clients with a Pay and Save Basic Offering for young people
or for students
• Client relationships that are exclusively a UBS rental surety
savings account or UBS retirement account (pillars 2 and 3)
• New clients during the first three months

(1) The additional charge will be billed for the first time at the end of June 2011 for the entire second quarter of 2011 (CHF 90 for the months of April, May and June 2011). Subsequently, the additional charge will be billed monthly.
The extra charge is debited monthly in the same way as any account maintenance fees / offering prices that are due.

(2) Depending on the account debited, the notification will be sent at the time of the debit or at the latest with the mailing of the account statement.

(3) Total assets include the accumulated account and custody account assets invested with UBS under the same client (excluding UBS vested benefits accounts/custody accounts and credit card accounts). To qualify for exemption from fees, the total assets booked at UBS in Switzerland must have been at least CHF 50,000 during the entire previous month.

(4) The salary deposits must each have been equal to at least CHF 500 during the last three months and must be made to a CHF or EUR account at UBS.

© UBS 2011. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.
UBS reserves the right to alter its prices and services at any time. These changes will then be communicated to the client in the appropriate manner.

Thu, 08/04/2011 - 12:10 | 1524101 Ethics Gradient

Swiss banks are already doing this too. Charging a new MONTHLY fee of 30CHF to foreign accounts. Unless you have over 50000CHF.

Thereby making your comment completely irrelevant to the BoNY move which is:

nothing short of outright terrorism to get everyone out of cash and into fiat-based ponzi products.

I suspect most institutions have more than 50k CHF under management.

Nice beard, by the way.

Thu, 08/04/2011 - 11:33 | 1523943 mayhem_korner

Thu, 08/04/2011 - 11:54 | 1524033 karzai_luver

Is Obama serving peas at his 10K plate funding gala? Bitchezz. now pull you serfs pull!!!!!!!!!!!!

Thu, 08/04/2011 - 11:55 | 1524035 alangreedspank

Mostly everyone has a better place to store cash that doesn't cost much given you'd paid the whole thing; mattress.

Thu, 08/04/2011 - 11:27 | 1523920 mayhem_korner

Mattress stuffing!

Thu, 08/04/2011 - 11:27 | 1523921 vast-dom

beyond outrageous!

Thu, 08/04/2011 - 11:29 | 1523927 williambanzai7

This is why banks should be regulated like public utilities.

Thu, 08/04/2011 - 12:00 | 1524041 Voluntary Exchange

Love your artwork William.

But regulation isn't it. The issue is counterfit fiat, and all other tyrannies forced by the folks who love to claim a legal monopoly on the initiation of force. It is all about governemnt and regulation! The way you get banks to behave is to have honest money again and eliminate the government privileged "limited liability" and every other way the banker owned government rigs the game their way. Eliminate all governemnt interference in "money" allowing the free market again to exist and both beasts will fall.

Then be able to go after any bank officer's personal assets if/when they can't cover their notes when they are caught defruading their depositors. (No more government monopoly of law and justice making sure you can't recover just restitution).

Please stop sounding like a statist and whining "regulation" when we need to reboot the whole idea of "government", not beg the criminal class to be less criminal by begging for the criminals to pass more laws. Get the mafia (government) out of money and the natural common law systems of "justice" (such as would exist in a free market of justice)!

Thu, 08/04/2011 - 12:01 | 1524045 alangreedspank

They are already to the tune of thousands of pages of regulations, you need to be blind or willfully stupid to believe they are not. The issue is, who regulates the regulators ? Anser is: you can't. Only the threat of bankruptcy and failure can regulate a market

Thu, 08/04/2011 - 13:59 | 1524257 fallout11

"Only the threat of bankruptcy and failure can regulate a market."
Sadly, not if they are "too big to fail" and backstopped by the taxpayer's wallet.

Thu, 08/04/2011 - 16:57 | 1524722 alangreedspank

Of course, that goes hand in hand with what I've said.

Thu, 08/04/2011 - 11:29 | 1523929 IQ 145

To me it would read as; please put your excess short term funds in London Bullion Market thirty day, or ninety day, futures contracts for Silver; which is not difficult or expensive to do. And, therefore, Fuck the Bank of New York.

Thu, 08/04/2011 - 11:44 | 1523930 Cleanclog

This is how banking will make revenues in future. All about Capital preservation not appreciation now.

Thu, 08/04/2011 - 11:31 | 1523934 Boston

T-Bill yields go negative, 2 year notes hit record lows. The 10 year at 2.5%.

US Treasury just got the debt ceiling raised, and needs to issue hundreds of billions in net new debt.

What a coincidence!!!!

Thu, 08/04/2011 - 11:35 | 1523955 Wolf in the Wilds

Yes, what a scheme to get people into US Treasury debt. Why bother to lose money this way? Just get out of the dollar and go elsewhere. This is a joke!

I hope the Chinese are watching. This is a good time to sell all their bonds. It is pointless to stay in the dollar.

Thu, 08/04/2011 - 11:55 | 1524034 John Self

Similarly, look at the new collateral requirements for derivatives under Dodd-Frank. Coincidence that clearinghouses will be required to hold trillions in treasuries (when, under some trades, less liquid forms of collateral sufficed in the past)?

Thu, 08/04/2011 - 11:31 | 1523935 SumDumGuy

"breaking the buck, breaking the buck!" In best Beavis and Butthead voice.

Thu, 08/04/2011 - 11:31 | 1523940 Manthong

They had better be careful.. there are attractive shiney alternatives out there.

Thu, 08/04/2011 - 11:33 | 1523946 newstreet

Carthago delenda est.

Thu, 08/04/2011 - 11:35 | 1523957 mayhem_korner

Babylonia delenda est.

Thu, 08/04/2011 - 11:34 | 1523950 dasein211

We only have123billion left in debt ceiling cap. This shits not gonna last til next week at this rate!

Thu, 08/04/2011 - 11:34 | 1523951 JW n FL

I think the Jewish Lobby is being completely under appreciated by You ALL!!

as well the Banking Lobby has been working over time!

where is your sense of gratitude?

Our Jewish Lobby Owners..

http://www.opensecrets.org/usearch/index.php?q=jewish&cx=010677907462955562473%3Anlldkv0jvam&cof=FORID%3A11#861

Our Banker Lobby Owners..

http://www.opensecrets.org/usearch/index.php?q=bank&cx=010677907462955562473%3Anlldkv0jvam&cof=FORID%3A11#859

http://www.revisionisthistory.org/talmudtruth.html

Some Teachings of the Jewish Talmud

Where a Jew Should Do Evil

Moed Kattan 17a: If a Jew is tempted to do evil he should go to a city where he is not known and do the evil there.

Penalty for Disobeying Rabbis

Erubin 21b. Whosoever disobeys the rabbis deserves death and will be punished by being boiled in hot excrement in hell.

Hitting a Jew is the same as hitting God

Sanhedrin 58b. If a heathen (gentile) hits a Jew, the gentile must be killed.

O.K. to Cheat Non-Jews

Sanhedrin 57a . A Jew need not pay a gentile ("Cuthean") the wages owed him for work.

Jews Have Superior Legal Status

Baba Kamma 37b. "If an ox of an Israelite gores an ox of a Canaanite there is no liability; but if an ox of a Canaanite gores an ox of an Israelite...the payment is to be in full."

Jews May Steal from Non-Jews

Baba Mezia 24a . If a Jew finds an object lost by a gentile ("heathen") it does not have to be returned. (Affirmed also in Baba Kamma 113b). Sanhedrin 76a. God will not spare a Jew who "marries his daughter to an old man or takes a wife for his infant son or returns a lost article to a Cuthean..."

Jews May Rob and Kill Non-Jews

Sanhedrin 57a . When a Jew murders a gentile ("Cuthean"), there will be no death penalty. What a Jew steals from a gentile he may keep.

Baba Kamma 37b. The gentiles are outside the protection of the law and God has "exposed their money to Israel."

Jews May Lie to Non-Jews

Baba Kamma 113a. Jews may use lies ("subterfuges") to circumvent a Gentile.

Non-Jewish Children are Sub-Human

Yebamoth 98a. All gentile children are animals.

Abodah Zarah 36b. Gentile girls are in a state of niddah (filth) from birth.

Abodah Zarah 22a-22b . Gentiles prefer sex with cows.

I understand that anyone who posts sourced and sited facts will be considered a Nazi due to the extreme training regimen that Cable News has had us all on here in American.. I would encourage you to look past your own brainwashing and consider the facts.

Thu, 08/04/2011 - 11:43 | 1523988 SMG

The cause of the world's ills are Illuminati and it's inner circle, not Jewish people. They worship Lucifer not Yahweh.

Thu, 08/04/2011 - 11:46 | 1523990 whstlblwr

Abodah Zarah?? Go to Babylonian days to make self relevant, LOL. You ridiculous piece of shit. Nice distraction from self. Look inward you find all evil you seek.

BTW, JW, any chance you part of oil cartel? What your occupation? Theory that oil business like to distract use the Jew, why not right? Easy.

Thu, 08/04/2011 - 11:45 | 1523994 SMG

The source of our ills come from the Illuminati, not Jewish people. They are the ones to blame for these calamities.

Thu, 08/04/2011 - 11:51 | 1524019 fuu

<--Jew Wannabe in Fort Lauderdale

<--Just Wanking in Fucking Loserville

Thu, 08/04/2011 - 11:54 | 1524026 Number 156

JW - Would you please stop copying and pasting your idiotic posts that have nothing to do with the topic!

I can sit here and blame Christians, Catholics, Muslims, Republicans, Democrats,CNN, CNBC, Fox News and prove it too, but Id be just as off topic and look just as stupid as you.

Thu, 08/04/2011 - 22:50 | 1525467 JW n FL

I dont hate all jews..

I hate the Lobbyists! if they happen to be from Mars or Venus or where ever! I dont care I hate them too!

I hate the people who have bought and paid for the Government in the United States!

and if Israel! is one of the Owners then Fuck the State of Israel!! but it is NOT! becuase they are Jewish! it is becuase they are Lobbyists!

Fri, 08/05/2011 - 10:34 | 1526738 fuu

That is not how you portray it and you know it.

Thu, 08/04/2011 - 11:34 | 1523952 lieutenantjohnchard

action such as this is why i opined that the banksters may simply let gold and silver run up. their goal is stay solvent in wine, women ans song. thus, the banksters may step away from games they no longer can afford, namely fighting a losing battle of suppression. bankster priorities: women or gold?

Thu, 08/04/2011 - 11:35 | 1523953 papaswamp

Shoebox savings 'accounts'...

Thu, 08/04/2011 - 11:35 | 1523954 SilverRhino

All it takes in one or two of these insitutional deposits to wipe out a lot of available physical silver if they got so inclined.

35 million bucks would clean out tulving.

Thu, 08/04/2011 - 11:37 | 1523966 Johnny Lawrence

Commodities getting rocked. Deflationary collapse, son.

Thu, 08/04/2011 - 11:41 | 1523981 mayhem_korner

PM buying power to the moon!

Thu, 08/04/2011 - 11:49 | 1524012 hp12c

The Big boys cashing out of leveraged commodities contracts to cover losses in equities...2008 all over again... PM's sinking now, time to restock...

Thu, 08/04/2011 - 11:38 | 1523967 Archimedes

Market Sinking like a stone. That leverage is a bitch when it goes the other way. Barton Biggs must be agressively buying!

Thu, 08/04/2011 - 11:38 | 1523971 hp12c

This proves how bad their "real" Balance sheet is....

Thu, 08/04/2011 - 11:40 | 1523976 JR

Gary North quote today from Rothbard’s Mystery of Banking on LewRockwell.com

Ultimately, as Ludwig von Mises showed, this process of central-bank credit expansion ends in one of two ways:

the crack-up boom – the destruction of both monetary order and economic productivity in a wave of mass inflation – or
a deflationary contraction in which men, businesses, and banks go bankrupt when the expected increase of fiat money does not occur.

http://lewrockwell.com/north/north1012.html

Thu, 08/04/2011 - 11:41 | 1523980 JR

Gary North quote today from Rothbard’s Mystery of Banking on LewRockwell.com

Ultimately, as Ludwig von Mises showed, this process of central-bank credit expansion ends in one of two ways:

the crack-up boom – the destruction of both monetary order and economic productivity in a wave of mass inflation – or
a deflationary contraction in which men, businesses, and banks go bankrupt when the expected increase of fiat money does not occur.

http://lewrockwell.com/north/north1012.html

Thu, 08/04/2011 - 11:41 | 1523983 Nothingman

Did we all just fall down the rabbit-hole? I feel like I'm falling up.

Thu, 08/04/2011 - 11:42 | 1523984 Franken_Stein

Oh my God !

We are ALL gonna die !

;-)

Thu, 08/04/2011 - 11:56 | 1524036 VisualCSharp

Well, you know what they say...

On a long enough timeline...

Thu, 08/04/2011 - 11:43 | 1523989 Argos

Only for deposits over $50 Million.

Thu, 08/04/2011 - 11:44 | 1523991 CrankItTo11

On a long enough timeline, the survival rate for F5 drops to zero.

Thu, 08/04/2011 - 11:45 | 1523998 CrankItTo11

Dow -300... we're definitely going to end green for the day. hahahaha.

Thu, 08/04/2011 - 11:45 | 1523999 GeneMarchbanks

This'll have Unintended Consequences 101 as Tyler so well understands.

Thu, 08/04/2011 - 11:46 | 1524000 Yardstick of Ci...

Guys, remember 2008? We all thought the world was ending. I'm buying pullbacks in gold, as we will likely see short covering/profit taking in ES at some point soon. The Fed is running out of tricks to keep the Ponzi going but the question that has to be asked is this: How many times can a dead cat bounce? And how high? Does anyone think we won't see S&P above 1,350 again in a relatively short period of time?

Thu, 08/04/2011 - 12:15 | 1524116 whstlblwr

But, but, but, you young inexperience trader remember? You love ZH and want advice from traders. Keep story straight.

Thu, 08/04/2011 - 11:47 | 1524001 CrankItTo11

WOA... heading to -400 in seconds.

Thu, 08/04/2011 - 11:48 | 1524007 JR

America getting through the night… from Denninger’s Market Ticker today: Crack and America (excerpt) :

…2008 was the tight chest where you avoided death. The chart even looks like a heart attack. But the debt ceiling increase and the refusal to admit to the truth and talk to the American people about what's really going on, that we've been binging on drugs and nearly died, and that if we don't quit now we will expire is you, sitting in that apartment, right after you get back from the doctor and see the old glass pipe on the nightstand.

Your buddies who talked you through the scary night are Tim Geithner, President Obama, the CNBC crew and the ivory-tower "eCONomists" like Krugman. Then there are the bankers, who have been selling you the dope. The latter, of course, will go broke if you stop doing the drugs and they bribe the politicians with campaign contributions and buy advertising on the media outlets, insuring that their point of view gets wide dissemination - and nobody else's does. In fact, they both call the doctors names and claim they really don't know what they're talking about.

You'd think that all the above would care if you die, for a dead man doesn't buy any drugs. You'd be wrong because your drug dealer managed to get the title to all your assets in his name before you took the first hit.

So let's ask the question: Are we prepared to "Just Say No" yet? Or do we prefer death?

See, we're getting another warning right now. The wild gyrations in the market? Those are heart palpitations, and they're scary. If you're in the market you probably have had that sinking feeling in the pit of your stomach over the last week. It wasn't as bad as 2008 but it sure had that familiar tinge to it.....

We've trashed our economy folks and it didn't happen overnight. We offshored our labor, destroyed the incentives for capital formation and bought more and more drugs - including the legal sort - instead of eating reasonably and being active. It's easier to take a pill (or a snort) than to go to the gym, ride a bicycle or put on a pair of running shoes.

The politicians think they have years. Most believe we have a decade, some (like Ryan) think we have two or more decades. We don't. The warnings are emergent now. The heart palpitations are happening as you read this. The first "heart attack" was bad, and we nearly died. But the damage was not repaired: employment has not come back, trade policy was not rationalized, the illegal aliens in the country are still sucking down tax funds we need for citizens, the people who sold us the drugs originally were not cut off and jailed and we all didn't stop binging. All we did was get our dope from a new pusher - the Federal government - who told us we didn't haven't to pay for the drugs as they called them "benefits" and "entitlements." In short we squandered the opportunity of 2007 when we could have accepted a 15% contraction in the Federal government's size. Now we have to accept a forty percent contraction. The required contraction to restore balance not only has gotten worse it will continue to do so the longer we wait before we act.

It is time to choose America, even though choosing to get well will be painful. It will result in much more unemployment in the short term, and the government will not be able to increase assistance. It will result in the stock market plunging. And it will result in the big banks and may over-levered firms, large and small, being gutted, with many of them going out of business.

But if we don't do it - and do it now - we'll have "the big one", and that voluntary assumption of pain will pale beside the outcome that will occur.

It is time to choose, and remember: Choosing to not decide is, in fact, a choice.

http://market-ticker.org/

Thu, 08/04/2011 - 11:50 | 1524013 hunglow

So, how's that working out for ya?

Thu, 08/04/2011 - 11:56 | 1524039 Catullus

My storage fees are less. Haha.

Thu, 08/04/2011 - 12:03 | 1524065 topcallingtroll

Best comment of thread.

Thu, 08/04/2011 - 11:58 | 1524046 cocoablini

The government bots are jewbaiting this discussion- to delegitimize zerohedge. All part of operation perfect citizen.
If you bring down the readership, you killed the source. And the source is the enemy of the state and the propaganda machine.

Zero rates or charging for cash safety is the ultimate in fascist central banking and planning. Paul Krugman must be masturbating right now, he's so happy.

Thu, 08/04/2011 - 11:59 | 1524050 topcallingtroll

Woohoo!

Ewz is going to have a six percent yield before this is all over. SPy at a pe of 11. October is coming early this year. We are gonna have santa's rally showing up in november!

Thu, 08/04/2011 - 12:17 | 1524068 Transitory Anomaly

I understand that anyone who posts sourced and sited facts will be considered a Nazi

No not at all. You wallpapered your posts with tons of supposed "sourced facts" hoping something will stick and making it impossible for anyone to respond to them all. You've never read any of these sources, you have no clue what they are saying. They are poorly translated and presented out of context. You would not be called a Nazi, you would be called an ignoramus or a fool.

Thu, 08/04/2011 - 12:05 | 1524074 Rodent Freikorps