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The Supercommittee That Really Runs America - Presenting The November 1 TBAC Minutes

Tyler Durden's picture




 

With Tim Geithner having proven repeatedly and beyond a reasonable doubt he has insurmountable intellectual challenges, many have wondered just who it is that makes the real decisions at the US Treasury? The answer is, The Treasury Borrowing Advisory Committee, or the TBAC in short, chaired by JP Morgan and Goldman Sachs, which meets every quarter, and in which the richest people in America (here is its composition) set the fate of the US for the next 3 months in the form of a very much irrelevant report to TurboTax (link). What is of huge importance, however, are the minutes, which unlike the FOMC, are released immediately following the meeting. Below are the full minutes from the latest TBAC meeting held yesterday, just released by the US Treasury (and yes, the issuance of FRN Treasurys, corporate cash hoarding as well as the resumption of the SFP program are both discussed - like we said: these guys run the world) as well as the critical associated powerpoint.

Minutes of the Meeting of the Treasury Borrowing Advisory Committee the Securities Industry and Financial Markets Association November 1, 2011

The Committee convened in closed session at the Hay Adams Hotel at 9:30 a.m.  All Committee members were present with the exception of Paul Tudor Jones.  Assistant Secretary for Financial Markets Mary Miller, Deputy Assistant Secretary (DAS) for Federal Finance Matthew Rutherford and Director of the Office of Debt Management Colin Kim welcomed the Committee and its newest member, Stuart Spodek [fixed income PM at BlackRock].  Other members of Treasury staff present were Fred Pietrangeli, Jennifer Imler, Amar Reganti, Allen Zhang, David Chung, Alfred Johnson, Dara Seaman and Brian Zakutansky.  Federal Reserve Bank of New York members Dina Marchioni and Mark Cabana were also present.

DAS Rutherford began the meeting with an update on tax receipts, which were $140 billion higher in 2011 versus the prior fiscal year (FY).  He noted that withheld receipts were up only slightly on a year-over-year basis due in part to the payroll tax cut.  Corporate tax growth slowed in Q4 FY 2011.

DAS Rutherford then discussed outlays, which totaled approximately $3.6 trillion in FY 2011 or roughly 24 percent of GDP. Health and Human Services was the largest outlay in FY 2011 at $891 billion, with Medicare and Medicaid being the largest sub-categories. Social Security spending totaled $784 billion, with Old-Age, Survivors and Disability Insurance increasing the most. The third largest outlay was Defense, within it, Operations and Maintenance was the largest expenditure. Rounding out the top four categories was Treasury.  Roughly 85 percent of the $537 billion in Treasury outlays was made up of interest expense, with $235 billion from debt service on marketable debt and about $220 billion from non-marketable interest payments. With respect to nonmarketable borrowing, DAS Rutherford noted that SLGS redemptions continued into Q4 FY 2011, causing Treasury to borrow an extra $17.6 billion last quarter.
                             
Next, DAS Rutherford reviewed the deficit for this past fiscal year versus the prior two years.  For FY 2011, the deficit was recorded at 1.299 trillion, or 8.7 percent of GDP.  Going forward, dealers expect the deficit in FY 2012 to total $1.132 trillion, consistent with expectations last quarter. Most estimates assume the deficit will fall to below $1 trillion by FY 2013.

DAS Rutherford briefly summarized the American Jobs Act (AJA) into three components: extension of current laws, spending measures and new/incremental tax cuts.  He noted that the President’s plan was meant to stimulate to the economy in the short term, while putting in place a medium-to-long-term credible deficit reduction plan.

Director Kim then discussed Treasury’s debt portfolio.  Given current OMB deficit projections, which include the AJA, and assuming no changes to issuance sizes or auction frequency, Treasury expects to be modestly under-financed in FY 2012. However, given the same assumptions, Treasury would be over-financed from FY 2013 through FY 2016.

Kim next reviewed a number of debt metrics.  The average maturity of the portfolio, which currently stands slightly above 62 months, continues to extend.  Kim proceeded to discuss hypothetical average maturity calculations.  In the example used by Director Kim, Treasury adjusted future nominal coupon issuance on a pro-rata basis, while keeping the mix of securities and the auction schedule constant.  Treasury also held the bill stock constant.  In this example, the maturity was shown to naturally extend to approximately 70 months by 2015.

Kim emphasized that the average maturity projections and the associated underlying assumptions for future issuance were purely hypothetical.  The projections were not meant to convey future debt management policy or an average maturity target.  He reiterated that Treasury must remain flexible in the conduct of debt management policy.

Currently, Treasury bills make up about 15 percent of the debt portfolio, with nominal coupons and TIPS at slightly more than 77 and 7 percent, respectively. If Treasury were to adjust nominal coupons to meet OMB’s future financing estimates, bills would become approximately 10 percent of the debt portfolio around 2016.  Additionally, on a percentage basis, the amount of Treasury debt maturing in the next 1, 2 and 3 years remains at historic lows.  If Treasury were to continue its current issuance pattern, Kim noted that by FY 2020 almost 20 percent of the portfolio would have a maturity profile greater than or equal to 10 years.

Director Kim then discussed demand for Treasuries.  He commented that auction coverage ratios remain very high for all of Treasury’s products.  Treasury bill bid-to-cover ratios have averaged 4.61 for this FY and coupon bid-to-cover ratios averaged 2.98.  Kim also noted that Treasury’s investor class data, which is released twice a month, continues to show healthy participation from a variety of accounts.  Kim highlighted that investment funds are becoming a larger participant in TIPS. Observing the change in investor class auction purchases in FY 2011, as compared to past years, he noted that there was an auction rule change in June 2009.  The new rule prevented primary dealers from guaranteeing an auction award at the clearing level to their customers.  Once this new rule went into effect, primary dealer awards declined.

Kim mentioned that private and public foreign participation was slightly less in FY 2011 than in FY 2010, with the largest decline in the bill sector.  Also, data shows an uptrend in longer-dated nominal coupon awards to foreign accounts.  Lastly, Kim noted that primary dealer awards averaged 59 percent for bills, 49.4 percent for nominal coupons and 49.5 percent for TIPS.

Following DAS Rutherford and Director Kim’s presentation, the Committee turned to a brief discussion on potential changes to financing and the auction calendar.  It was the consensus that Treasury should not make any changes to issuance sizes or existing auction calendar at this time. 

The Committee noted that they have consistently advised Treasury over the last several years to extend the average maturity of the debt portfolio.  Further, members of the committee observed that maturity extension expectations should already be priced into fixed income markets. It was the Committee’s view that Treasury should continue to extend average maturity in the most cost effective way.  Members of the Committee stated that their purpose is to advise and assist Treasury in achieving its mandate of minimizing borrowing costs over time. 

A member then broached the subject of Floating Rate Notes (FRNs), noting that it was recently discussed with primary dealers ahead of the November refunding.  DAS Rutherford noted that while FRNs have many features that make them a potentially attractive instrument for Treasury, there is still a lot of work that needs to be done on the product related to cost, structure, and demand.  DAS Rutherford emphasized that no decision has been made on whether to introduce this product.  It was the view of the Committee that Treasury should continue to study the product idea with a focus on cost.  

Another member raised a question about the possible resumption of Supplemental Financing Program (SFP).  In light of debt ceiling constraints, it was the view of the Committee that Treasury should not resume the program at this time.

The Committee next turned to the charge on the TBAC agenda: “The Impact of a Prolonged Period of Low-Interest Rates on Financial Markets.”

The presenting member first turned to the state of borrowers within the U.S. economy.  The member noted that overall loan growth continues to rise as lenders are making more commercial and industrial (“C&I”) loans.  However, consumer and real estate loan growth remains weak.

The presenter noted that loan recovery was still well below prior economic recoveries.  All forms of bank credit were significantly weaker than levels seen during those other periods.  The member noted that, based on the presented data, the lack of lending was driven, in part, by a lack of credit demand rather than a lack of credit supply from traditional bank lending.

As the discussion moved into the demand segment, the presenter noted that U.S. corporations have built up significant amounts of cash, lowering their marginal demand for borrowing.  A spirited discussion followed on whether the increase in cash holdings was due to corporate concerns regarding future funding or whether corporations did not see a significant opportunity cost in holding cash.

The presenter briefly summarized the effects of the current rate environment on various fixed income investors.  The member noted that low rates are particularly challenging to the money fund industry, resulting in a difficult low return environment.  Pension funds and insurers have had difficulty sourcing enough long-duration paper at appropriate yields for their ongoing asset-liability management strategies. A variety of investors may have to either extend duration or reallocate into higher yielding products to meet certain performance targets.  Banks, particularly small banks, are facing challenges due to the compression of their net interest margins.  The impact on mortgage lenders is uncertain, with an ongoing debate on whether lower rates and a flatter curve will spark more origination or “refi burnout”.  The presenter noted that REITS will likely suffer due to a lower carry and higher pre-payments.  In addition, mortgage servicers will see their mortgage servicing rights impacted during periods of refinancing or prepays.  The presenter also noted that foreign investor demand for Treasuries still remains healthy by historical standards.

Finally, the presenter concluded that Treasury should continue to investigate new product alternatives in order to diversify its investor base.

The meeting adjourned at 12:00 p.m.

The Committee reconvened at the Department of the Treasury at 5:40 p.m.  All Committee members were present with the exception of Paul Tudor Jones. The Chairman presented the Committee report to Secretary Geithner.

A brief discussion followed the Chairman's presentation but did not raise significant questions regarding the report's content.

The Committee then reviewed the financing for the remainder of the July through September quarter (see attached).

The meeting adjourned at 6:15 p.m.

 

 

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Wed, 11/02/2011 - 09:28 | 1836356 Henry Chinaski
Henry Chinaski's picture

We are pawned pawns pwnd.

Wed, 11/02/2011 - 09:37 | 1836404 HoofHearted
HoofHearted's picture

And we are pwned by a TBAG TBAC committee...make it even worse

Wed, 11/02/2011 - 09:57 | 1836461 TruthInSunshine
TruthInSunshine's picture

A member then broached the subject of Floating Rate Notes (FRNs), noting that it was recently discussed with primary dealers ahead of the November refunding.  DAS Rutherford noted that while FRNs have many features that make them a potentially attractive instrument for Treasury, there is still a lot of work that needs to be done on the product related to cost, structure, and demand.  DAS Rutherford emphasized that no decision has been made on whether to introduce this product.  It was the view of the Committee that Treasury should continue to study the product idea with a focus on cost.  

 

And on the subject of that FRN acronym, which also stands for Federal Reserve Notes, being symbolic of all inherently worthless fiat everywhere, upon which the greatest global ponzi in history is based, these people are not the ones who rule the world.

These people who meet so openly are mere errand boys/girls.

The ones who rule the world are behind the curtain, rarely seeing the light of day.

But they have a simple Modus Operandi, that has served them well for centuries.

1)  Create fiat using nothing more than an computer/ledger entry, backed by nothing of inherent value, that has legal recognition.

2)  Circulate such fiat via loaning it out, charging interest upon it.

3) Successfully get nations, business entities and individuals to borrow said worthless fiat that was conjured from thin air, and pay interest, pledging their real, inherently valuable assets in exchange for said worthless fiat (i.e. meaning that their real, inherently valuable assets can be taken if the conditions that make it impossible for them to repay the worthless fiat are [intentionally] induced).

4) Set the rate of interest payable on the loans of fiat that was conjured from thin air, solely at their discretion.

5) Supply more of such fiat, or withdraw fiat, to/from the system, at their discretion, bringing about inflation or deflation.

6) During times of large scale loan defaults, on the repayment of the fiat that they conjured from thin air, backed by nothing of inherent value, seize the most valuable assets that exist on the planet, many of which mankind depends on for its very survival.

Wed, 11/02/2011 - 10:01 | 1836479 jeff montanye
jeff montanye's picture

sounds like a plan.

Wed, 11/02/2011 - 10:46 | 1836655 topcallingtroll
topcallingtroll's picture

Yeah he makes it sound so appealing.

Is turbo tax Timmah really part of this strategem?

Couldnt they have picked a better guy to run the treasury?

Wed, 11/02/2011 - 10:12 | 1836503 traderjoe
traderjoe's picture

Nice summary.

Wed, 11/02/2011 - 18:58 | 1839067 BigJim
BigJim's picture

Thank God our leaders would never let it happen!

Wed, 11/02/2011 - 10:45 | 1836650 The Big Ching-aso
The Big Ching-aso's picture

I must say a very diverse group on this committee.   Affirmative action at work no doubt too. 

It's good to know that these stellar stewards of our financial system meet regularly to fuck things up consistently so we can plan accordingly.    The market hates uncertainty ya know.

Wed, 11/02/2011 - 10:52 | 1836676 Bring the Gold
Bring the Gold's picture

Excellent post. This is exactly what they do. Everyone who isn't completely compromised should take some time to reflect on financial history since 1870 onward (you can begin earlier in Europe especially England and Venice) in the US. You can also look at the history of the first two banks of the United States. You can see how engineered panics (1907 etc.) brought about the current FED system to operate in just the manner described. This system was perfected in Europe and imported to the US. Several of the Founding Fathers and early presidents (Andrew Jackson for all his other crimes and failings was on the right side of this issue) worked tirelessly against just such a system being implemented in this country.

Wed, 11/02/2011 - 10:55 | 1836713 SRV - ES339
SRV - ES339's picture

Well done TIN... clearly you get it!

Sent CNBS Asshat Hobbs a note to stop referring to the Greek protesters as anarchists yesterday... they're standing up to these monsters and I hope they force a default and blow the whole thing up!

It's time folks... no excuses if you try to squeeze a few last drops from the system before it goes down and you lose it all... ask anyone tied to MFG (how many traders saw the danger when they scooped up Lind-Waldock)!

Wed, 11/02/2011 - 13:11 | 1837480 eureka
eureka's picture

Okay - cool - agreed - so let's liste THESE REAL RULERS OF THE WORLD:

Rothschilds, Rockefellers, Koch Brothers, Bill Gates, Warren Buffet... anyone else - let's complete the list and then encourage EVERYONE on earth to completelt boycott any and all of their products and corporation.

What Do we really know? We should know who the real scumbag are - c'mon TRUTH IN SUNSHINE - name and list them all, please.

Wed, 11/02/2011 - 10:00 | 1836474 wang (not verified)
wang's picture

but who pays for travel, lodging and meal expenses and do they fly coach?

Wed, 11/02/2011 - 10:50 | 1836681 TruthInSunshine
TruthInSunshine's picture

They could stay at the Red Roof Inn, since the U.S. Government bought that delapidated chain of slumtels with U.S. taxpayer money via the TARP/TALF scam, but I heard a rumor that they prefer 5 star hotels with Michelin Star restaurants.

 

Wed, 11/02/2011 - 10:36 | 1836602 AE911Truth
AE911Truth's picture

Hey, what about using interest free Treasury issued money?

We could print enough to pay off the debt, eliminating all interest expense. This would save billions.

We wouldn't even need an IRS. Why collect tax when you can just print what you need? Doing away with the IRS would save billions.

Of course you would want to preserve your wealth in precious metals.

Any questions?

Wed, 11/02/2011 - 10:51 | 1836652 TruthInSunshine
TruthInSunshine's picture

That would greatly upset the inner sanctum loan shark racketeering group (ISLSR), and would lead to a global war.

They like their fractiona reserve fiat alchemy that they've monopolized which brings them unlimited interest payments in exchange for perpetually driving nations, business enterprises and individuals deeper into debt servitude, and getting the best assets having real value that these nations, business enterprises and individuals previously owned when they ultimately default - and make no mistake about it, they will all default ultimately.

Tulips, dot.coms, real estate, house flipping, VISA/MasterCard, HELOCs, social networking IPOs - it doesn't matter the drug that gets the junkies addicted and indebted; the end result is always the same.

Wed, 11/02/2011 - 10:57 | 1836721 AE911Truth
AE911Truth's picture

Dear Truth;

Your answer highlights why we need to stop using their debt based money. Perhaps we need a popular movement to create this change. Thanks

Wed, 11/02/2011 - 10:58 | 1836734 Quinvarius
Quinvarius's picture

Yeah.  The last thing they want is a debt free public.  Imagine the velocity of money if people had no debt. 

Wed, 11/02/2011 - 11:15 | 1836829 TruthInSunshine
TruthInSunshine's picture

While there's no doubt that the velocity of money would slow absent a debt-reliant system, a cash and carry economy would certainly lead to far more prudent financial decisions, far fewer boom-bust cycles, and consequently, far fewer opportunities for TPTB (those who conjure fiat from thin air at zero cost and loan it out charging interest, while receiving pledges of collateral having inherent value to secure such fiat loans) to 'relieve people of their most valuable possessions' (many of which have been held by their families for a generation or more, as in the case of family businesses/farms/jewels/PMs - Niederhoffer's prized silver antique collection comes to mind, but he was fully in bed with the sharks).

In other words, a far less debt reliant system, based on worthless fiat loans & fractional reserve banking, would lead to far more sustainable, real, organic economic growth, with far fewer 'harvests of dispossession.'

Wed, 11/02/2011 - 09:28 | 1836362 pepperspray
pepperspray's picture

Iran already read this

Wed, 11/02/2011 - 10:00 | 1836472 Leopold B. Scotch
Leopold B. Scotch's picture

Iran.  Iran so far away...

Wed, 11/02/2011 - 10:59 | 1836739 metastar
metastar's picture

Terrorist have long ago invaded Washington & Wall Street dwarfing any threat posed by Iran.

Wed, 11/02/2011 - 09:50 | 1836365 GeneMarchbanks
GeneMarchbanks's picture

Mark Cabana = Mark Cuban?

There seem to be a lot of fake people at these meetings, as in made -up characters. Never heard of ninety percent of those lunatics....

Wed, 11/02/2011 - 14:22 | 1837152 i-dog
i-dog's picture

The Squid's 'vice chairman' of the meeting is just 1 of their approx. 1,000 "managing directors" ... not even board or partner level. It's a side-show.

Wed, 11/02/2011 - 09:29 | 1836367 Nascent_Variable
Nascent_Variable's picture

We already know how they run the Treasury Dept.

http://www.youtube.com/watch?v=IPEYycCRKXo&feature=related

Wed, 11/02/2011 - 09:30 | 1836373 grunk
grunk's picture

Did they plan the office Christmas party?

Wed, 11/02/2011 - 09:31 | 1836376 Tsar Pointless
Tsar Pointless's picture

I'm sorry. I read the whole thing, but all I got out of it was:

OH MY GOD, WE'RE FUCKED!

Wed, 11/02/2011 - 17:14 | 1838683 mkkby
mkkby's picture

All I got out of it was... laughter.  If it had any meaning it wouldn't be displayed publicly.  These clowns are just the distraction.

Wed, 11/02/2011 - 09:32 | 1836380 Cursive
Cursive's picture

Tim Geithner = sock puppet

Wed, 11/02/2011 - 10:18 | 1836528 bankonzhongguo
bankonzhongguo's picture

Adding "puppet" gives an air of humanity.

Really just a sock.

Wed, 11/02/2011 - 09:33 | 1836384 marcusfenix
marcusfenix's picture

"Director of the Office of Debt Management"

I'm guessing that's more of a ceremonial position, obviously bereft any any real meaning or function, kind of like the king of England or TOTUS...

Wed, 11/02/2011 - 10:13 | 1836505 traderjoe
traderjoe's picture

It's ALL about keeping up appearances.

Wed, 11/02/2011 - 09:33 | 1836385 CrimsonAvenger
CrimsonAvenger's picture

I have to note that Tyler continues to display a wicked sense of humor - I hope it gets him some action with the ladies. If I was that clever I'd be getting laid all the time.

My wife, of course, would be furious.

Wed, 11/02/2011 - 09:37 | 1836398 Carlyle Groupie
Carlyle Groupie's picture

Oh sir that deserves an instant rim shot.
http://instantrimshot.com/

Wed, 11/02/2011 - 09:34 | 1836388 hedgeless_horseman
hedgeless_horseman's picture

 

 

Allow me to summarize.

Our banks' net interest margins are in the toilet.  How do we help?

Wed, 11/02/2011 - 10:15 | 1836515 narnia
narnia's picture

most of them would gladly accept the spread between past fixed rate obligations on depreciating collateral and ZIR with no loan growth than compressed spreads on rapidly depreciating collateral on rising IR with uncertain loan growth.

Wed, 11/02/2011 - 09:37 | 1836405 Zgangsta
Zgangsta's picture

So that's why the Dow is soaring today!

Wed, 11/02/2011 - 09:39 | 1836409 e2thex
e2thex's picture

The last time we met the wine list was rather shabby.

Wed, 11/02/2011 - 09:41 | 1836415 merchantratereview
merchantratereview's picture

Zero hedge is the NY Times and Wall St Journal combined. Great reporting!

Wed, 11/02/2011 - 09:57 | 1836465 jayman21
jayman21's picture

What kind of ZH'er would junk this?  Did someone piss on your cheerios this morning?

Wed, 11/02/2011 - 10:25 | 1836560 HellFish
HellFish's picture

Probably due to the insulting comparison of ZH to the NYT.

Wed, 11/02/2011 - 13:12 | 1837489 NotApplicable
NotApplicable's picture

Or the War St. Journal.

Wed, 11/02/2011 - 10:27 | 1836565 11b40
11b40's picture

"Finally, the presenter concluded that Treasury should continue to investigate new product alternatives in order to diversify its investor base."

The junkers are probably from the GS marketing department....the same mentality that thinks the TSY needs to seek new "products" to divesify it's investor base.

Wasn't it all the new "products" conjured up on Wall St. that got us into this mess? 

In this instance, I would call any new "products" they came up with junk....and instead of "investor base", the proper term would be "suckers" if outsiders, or "scammers" if insiders, depending on how the "product" was structured and who it was marketed to.

Sat, 03/03/2012 - 21:53 | 2220615 zhandax
zhandax's picture

No, it was that nightmare conjured on Jekyll Island and blamed on the panic of 1907 that got us into this mess.

Wed, 11/02/2011 - 09:51 | 1836416 Life of Illusion
Life of Illusion's picture

 

 

First thing they talked about.

All they care about is keeping that debt in tacked and re-inflated.

At any cost!

 

Wed, 11/02/2011 - 09:42 | 1836417 Sudden Debt
Sudden Debt's picture

 

 

 

ALL IN FAVOR OF TRANSFERING TRILLIONS OF DOLLARS TO JPM AND GS AND FUCK TAXPAYERS IN THE ASS?

YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES....

Wed, 11/02/2011 - 09:46 | 1836431 bernorange
bernorange's picture

"The presenter also noted that foreign investor demand for Treasuries still remains healthy by historical standards."

Hmmm...

http://www.zerohedge.com/contributed/foreign-central-banks-have-left-building

Wed, 11/02/2011 - 10:29 | 1836566 unununium
unununium's picture

The presenter noted ... A member broached ...

Not surprising that nobody wants their name associated with treason.

Wed, 11/02/2011 - 11:00 | 1836742 Use of Weapons
Use of Weapons's picture

You're missing the snark: Liberty Bonds?

 

 

Wed, 11/02/2011 - 11:16 | 1836845 Raging Debate
Raging Debate's picture

Ahh the irony and ohhh the horror... Man has evolved past 3d models long ago. Attempting to force a 3d triangular peg of 6667 into a 4d box of 4444 will no longer work.

Someone please tell them this time is different. However, it appears thier are mathematical and computational tools to create the solutions. Anything else now just destroys confidence. Use post-modern physics not neoclassic inputs from Malthus day. The current priests are basically telling us to become sun-worshipers. It is insulting to 6b Interweb users but the 6b don't know why. Perhaps this is food for thought...

Wed, 11/02/2011 - 15:53 | 1838322 Use of Weapons
Use of Weapons's picture

Sirius, Sirius, my dear fellow.

Where once there were 230 possible phases, we have now gone to a 5 fold Fourier, and so we are opened up. Whilst meeting replicas is both pleasing and confusing, one has to remember compassion and deal with our problem of Quenched Disorder. To deal with a QD issue on the interweb, one has to embrace and consume the flesh of the m[i/e]metic load - holding 4 schema layers of virulently conflicting belief & alief at a time, whilst maintaining both a status quo performance and humanity, leads to bleed and a noise ratio unpalatable to (the) many. We understand the distraction and pain that can bring to harmony, but all antibodies require infection of the host to start with.

To cease pollution, sometimes poisons have to be administered both to the body, and the body politic, to allow moments of silence. Torture was required to provide an opening, and From Metaphor to Metamorphosis requires one to understand that the unconscious realm summons that worst of all - À la recherche du temps perdu. 

 

Song of the Sea, a Capella, and Unanswered

.

Shock reveal: this is my base

Wed, 11/02/2011 - 09:46 | 1836432 fuu
fuu's picture

"A spirited discussion followed on whether the increase in cash holdings was due to corporate concerns regarding future funding or whether corporations did not see a significant opportunity cost in holding cash."

Cash hordes, cash hordes, what you gonna do, what you gonna do when we come for you?

Wed, 11/02/2011 - 11:04 | 1836763 junkyardjack
junkyardjack's picture

Bankers are like, what's all that cash doing sitting over there and not in my pocket. Fuck That!

Wed, 11/02/2011 - 09:54 | 1836433 AldoHux_IV
AldoHux_IV's picture

The debt slavery goes on and we allow these corrupt idiotic institutions to continue to manipulate the system in their favor-- this is pathetic that after all they control, they're still insolvent black holes of productive capital.

Take our country back from these assholes and end the slavery: default and debt destruction (which is the inevitable direction we will head-- there's too much debt in the system and these banker assholes will suffocate on their own greed and pursuit of power).

Looks like Bloomberg was wrong-- it's the banker's fault afterall, who controls Washington?

Wed, 11/02/2011 - 09:46 | 1836436 firstdivision
firstdivision's picture

Would you look at that, even PIMCO has someone on this board.  I did notice that UBS does not have a spot on the board, I guess they really do suck that bad.

Wed, 11/02/2011 - 09:46 | 1836439 jmcadg
jmcadg's picture

It's a veritable who's who of fucktard companies.

Wed, 11/02/2011 - 11:29 | 1836927 Raging Debate
Raging Debate's picture

Stop JMC. The construct here may be a bit crude but isn't offering healthy alternatives to the current paradigm what we are all doing here? It's an inclusive process. An independent, inclusive media source is very difficult to build, execute and manage. Perhaps we should consider encouraging new folks from the financial sector to opine for what value they can add instead of painting wide brushes.

How power is shared is relevant. Sharing knowledge how to do this without WW3 is priceless. If a new A team is formed to do the heaving lifting in management how to avoid recreating the wheel by B advisors might be very useful. Or do you prefer grubs to eat, anthrax treatments and glowing heads across the board?

Wed, 11/02/2011 - 09:50 | 1836446 Bull_Colapse
Bull_Colapse's picture

Where are the vigilantez?!?! We need some type of demogratic Groupon financial protest by the people here.

 

Surfs incorp???

Wed, 11/02/2011 - 09:58 | 1836468 jayman21
jayman21's picture

It is called bitcoins

Wed, 11/02/2011 - 09:51 | 1836451 caconhma
caconhma's picture

No shit.

One of the members is

Walter J. Muller III
Chief Investment Officer
Bank of America

It is only God knows how long the USA and Bank of America will stay out off an official bankruptcy guided by these investment visionaries!

Wed, 11/02/2011 - 10:14 | 1836506 the not so migh...
the not so mighty maximiza's picture

wasn't he on the SS Minnow?

Wed, 11/02/2011 - 10:15 | 1836509 the not so migh...
the not so mighty maximiza's picture

maybe not

Wed, 11/02/2011 - 09:53 | 1836452 vegas
vegas's picture

I think maybe Jon Corzine has some free time to be a member of TBAC. Starting real soon though, it may be a little tough for him to attend meetings due to the social restrictions of him being best buddies with his new found friend Bubba. Can he telecommute?

Wouldn't stop Barry Soetero from putting him in as chairman.

Wed, 11/02/2011 - 10:01 | 1836478 Bansters-in-my-...
Bansters-in-my- feces's picture

So Bankers run the world....

Whats new.?

Wed, 11/02/2011 - 10:03 | 1836485 youngman
youngman's picture

I think they should give stock pics after their meetings...what are they buying today???  would be helpful..no???

Wed, 11/02/2011 - 10:03 | 1836487 wang (not verified)
wang's picture

The meeting adjourned at 12:00 p.m.

The Committee reconvened at the Department of the Treasury at 5:40 p.m.  All Committee members were present with the exception of Paul Tudor Jones. (who apparently refused to leave the bar)

Wed, 11/02/2011 - 10:05 | 1836490 Jim in MN
Jim in MN's picture

This is the gut of it to me:

However, consumer and real estate loan growth remains weak.

The presenter noted that loan recovery was still well below prior economic recoveries.  All forms of bank credit were significantly weaker than levels seen during those other periods.  The member noted that, based on the presented data, the lack of lending was driven, in part, by a lack of credit demand rather than a lack of credit supply from traditional bank lending.

Someone should tell these jackasses that consumer deleveraging is the secular trend that will eclipse all others for the next ten years at least.

It is truly hideous that LOAN RECOVERY is the metric of success for these fucktards.

Wed, 11/02/2011 - 10:18 | 1836533 Tsar Pointless
Tsar Pointless's picture

True.

But we've also created the world's greatest financial and economic systems, due to the fact that we are the world's greatest country.

Great people can only produce great things, after all.

Don't take it from me - just look to 1930s Germany for confirmation.

Wed, 11/02/2011 - 13:23 | 1837542 Raging Debate
Raging Debate's picture

Very clever Tsar but your too cute by half. No, the answer is Open Space global research project involving two math equations to evolve from what we have to what we need. As the world is in transition period from A to B it may behoove us to share information freely. Physics shows the world operating between a 4d and 5d level but our tools are still 3d. Show leadership how to go from point A to Point B and encourage advising to avoid recreating the wheel.

Now that is a plan, not cleverly masked insults or direct ones like Fucktard. The question is do we choose the path of least resistance or kill each other off to prove mankind is still capable of executing a simple plan.

Wed, 11/02/2011 - 10:47 | 1836664 Rainman
Rainman's picture

Consumer loan growth is weak ?? Everything is going on the card !!

http://www.bloomberg.com/news/2011-11-02/mastercard-profit-climbs-38-as-card-spending-increases.html

Wed, 11/02/2011 - 10:14 | 1836510 OutLookingIn
OutLookingIn's picture

The tail continues to wag the dog!

Wed, 11/02/2011 - 10:18 | 1836527 Ecoman11
Ecoman11's picture

In other news, The Bank of Canada just hired David T. Beers from S&P as a special advisor to the Governor Mark Carney (former Goldman Sachs executive). David Beers was the man responsible for downgrading the US. The outgoing special advisor is Timothy Hodgson who was Goldman Sachs CEO in 2005.

GS is planted everywhere.

Wed, 11/02/2011 - 10:18 | 1836530 Smiddywesson
Smiddywesson's picture

Pension funds and insurers have had difficulty sourcing enough long-duration paper at appropriate yields for their ongoing asset-liability management strategies.

i.e., pension funds and insurers are being eaten alive by ZIRP, and so a lot of managers are picking up riskier paper to meet their targets.  ZIRP is making the system even more succeptable to collapse.

Wed, 11/02/2011 - 10:19 | 1836536 Tsar Pointless
Tsar Pointless's picture

ZIRP is making the system even more succeptable to collapse.

See now? There you go! Even more evidence that the plan is working!

Wed, 11/02/2011 - 13:27 | 1837564 Raging Debate
Raging Debate's picture

Transferring the wealth from West to East is called mandraking. It isn't a plan it is part of a model. Now, the model is failing and physics or self reflecting evolution (religion) tells us why. So now what is needed is an actual plan.

Wed, 11/02/2011 - 10:20 | 1836542 digalert
digalert's picture

NO!

The Jeethner is just a puppet? <gasp>

Wed, 11/02/2011 - 10:21 | 1836544 xcehn
xcehn's picture

The people yearn to volunteer for guillotine duty.

Wed, 11/02/2011 - 10:23 | 1836548 Dick Darlington
Dick Darlington's picture

OT: POTUS calendar full?

Earlier today: *GREEK PRIME MINISTER PAPANDREOU TO MEET OBAMA TODAY, VIMA SAYS

And now: *OBAMA HAS `NO PLANS' TO MEET WITH PAPANDREOU, WHITE HOUSE SAYS

 

To meet or not to meet, that is the question.

Wed, 11/02/2011 - 10:28 | 1836567 jonan
jonan's picture

is it just me, or is anyone else generally depressed about the current state of affairs?  the world is going to shit, i have to eat the shit sandwich handed down to me by the political generation before me, i sit in class and learn a bunch of shit that doesn't matter, i'm force fed a bunch of shit lies about economics and history by shitty as teachers, all so i can earn a shit degree in finance to work for shitty corporations who think a shitty degree equates to real skills, my future looks shitty so i have to use all my discretionary income buying bullets guns and gold to protect myself from shit people and a shitty government, and i'm no longer blindly optimistic about being surrounded by so much shit...cause i know it's all shit...

knowing the truth is a powerful and enlightening thing, but it really does make me shit shittingly depressed...so much shit around me i can't even move lest i step in more shit, but it doesn't matter cause i'm knee deep in shit that shitty as people who made shitty ass decisions forgot to flush down the toilet or their clogged up septic tanks so they put it in buckets and shipped their shit to me...

fuck

my

life

but i wouldn't trade knowing the truth for blind shitty ignorance...keep stacking ZHers, keep stacking the bullets, the guns, and the gold, and hopefully when the shit hits the fan and finally dries to a crust that no longer stinks, we can go back to a future where we can look forward to unicorns, poptarts, redvines and individual freedom...

Wed, 11/02/2011 - 10:31 | 1836583 CrimsonAvenger
CrimsonAvenger's picture

Amen, brother.

Wed, 11/02/2011 - 10:37 | 1836609 Gully Foyle
Gully Foyle's picture

jonan

Stan Marsh is that you?

Stan goes to the doctor, who, after examining him, diagnoses him as a "cynical asshole." From ice cream to movie trailers, Stan can now only see the bad in things, and this negative outlook alienates him from Kyle, Kenny and Cartman, who begin avoiding him.

Wed, 11/02/2011 - 13:42 | 1837618 Raging Debate
Raging Debate's picture

Gully, have you considered that the crux of the problem is demographic imbalance leading to lack of research or succession plans? I am not talking genocide as a potential solution.

The successes of the WW2 generation in the areas of medicine extended global longevity. Growing up as a kid (I am 41) the people retired late sixies. They did not work until late seventies or early eighties like today.

If you get out to local bars and taverns and speak to my generation or younger, it might widen your input horizens. Meanwhile, I am asking questions from older generations so as to avoid recreating the wheel on solutions. But I'm telling you from a research perspective the younger folk are getting desperate while the older folk wonder why everyone is so angry and shouldn't older folk wait until all the anger calms down? For after all, anger is not an environment to invest in.

What I mentioned is a paradox. It can be measured literally now and a plan to address it is needed. I have one. I'm sharing with some global leadership as we speak. But begging to offer solutions or older generations calling all the beggers trash won't wait another decade until your generations exit by natural means. Step up or tune out but the center is collapsing so choose wisely and choose soon.

Wed, 11/02/2011 - 10:39 | 1836618 xcehn
xcehn's picture

That's a whole lotta shit credit for one rant!  Yeah, reality really is that shitty.

Wed, 11/02/2011 - 10:40 | 1836624 centerline
centerline's picture

Beautiful rant there Jonan.

Lots of us feel the same way.  Just tired of the shit.  And worried that the shit storm that is coming is going to be even shittier.  I actually fear a soul-crushing, long, drawn-out slog into complete shittiness more than a sudden shit storm though.  Once hope is lost, there is nothing else.

My own comfort lately has been in making serious changes to my character and life.  Preparing for the shit storm and enjoying luxuries that will likely disappear in the near future.  I only wish that my family could see what I see.  If I had them on-board, truly radical changes would be possible.

On the anecdotal side, I watch the sentiment on various boards, op eds, article commentaries, in the community, etc.  People are waking up now.  Attitudes are changing fast.  We all like to joke about the "sheeple" of course.  But, I actually think that the silent majority is getting very close to the breaking point.  Keep the faith.

Wed, 11/02/2011 - 11:07 | 1836787 jonan
jonan's picture

have you ever had the feeling that you woke up in the middle of an enjoyable dream, only to return to a body that has a 100 degree fever and stomach cramps...multiply that feeling by an order of magnitude...yea, that's how i feel about the lies i was fed and believed until i was 26 years old...i was a war mongering fascist and i didn't even know it...

i'm 28 now, halfway through college, and have absolutely no fucking idea what i'm going to do with my life...so much for white picket fences, and cushy white collar job...

i've made such a huge shift in perspective that i'm still sufferring from cognitive dissonance...my mind is filled with a jumbled clusterfuck of lies and misinformation that it is hard to know what to get rid of and what to keep...extremely disorientating to say the least...

Wed, 11/02/2011 - 13:46 | 1837628 Raging Debate
Raging Debate's picture

I have a suggestion for you Jonan. Go to an old folks home and learn to play their piano and gather all the research you need how to deal and succeed. I am not joking.

Wed, 11/02/2011 - 15:12 | 1838131 jonan
jonan's picture

funny you say that, i've actually played pretty much every beethoven sonata and chopin nocturne written at old folks homes during the holidays...even placed at a few statewide piano competitions...i also played the mass of angels and saints on the organ during sunday mass while i was in high school...

those places don't seem like a fountain of wisdom though, most people i've encountered at senior homes usually have some form of mental impairment...they smell weird too...

Wed, 11/02/2011 - 15:17 | 1838140 jonan
jonan's picture

btw...if you haven't noticed, my avatar is the combination of two individuals who are masters in two fields i am passionate about...ludwig v beethoven and ludwig v mises...hence...

"mises van beethoven"

Wed, 11/02/2011 - 11:00 | 1836743 Pbn2Au
Pbn2Au's picture

http://www.archive.org/stream/fatherabrahamssp00franuoft#page/n1/mode/2up

tough and historic times - no doubt; however, the men and means to deal with such will never change

Wed, 11/02/2011 - 11:09 | 1836802 Smiddywesson
Smiddywesson's picture

Jonan,

Don't be depressed.  The next stage on your journey is learning that this is just a cycle, that it has happened before, and will happen over and over again in the future.  Yes, there are winners and losers, and it's no fun living through the transition years (and probable wars), but think about how much fun it is for the older generations who face their own mortality while seeing everything they loved being torn down, and not knowing enough history to realize that this is how it works for the human race.  We are just lemmings.  Our prosperity creates ever increasing complexity in society until, when faced with the aging of a baby boomer generation which prosperity creates, everything collapses.  That's what happened to Rome, growth until collapse.  That's what happened in the French revolution.  That's what's happening here.  Arguing about policies and political parties misses the point, this is happening everywhere, in all countries, in every kind of political system possible, in part because we tied our countries together in a global economy, but at its core, it is because it is our nature.   

You threw off the blinders and saw reality for what it is, but retained the commonly held belief that prosperity can be acheived as a steady state.  It isn't, and it can't be.  Prosperity is the climb to the inevitable collapse.  You can't sweeten a shit sandwhich, but you can be at peace if you dig a bit deeper into history.  I would recommend The Fourth Turning as a good book to start.  There's a lot of comfort in history for the doom and gloom crowd.   

 

Wed, 11/02/2011 - 17:36 | 1838760 mkkby
mkkby's picture

Except never before has peak oil and other natural resources been at hand.  Yes, there will be future boom and bust cycles, but within a slowly declining trend.  This comforts me because when resources run out, humans will be forced to live sustainably and at a much lower population level.

Sat, 03/03/2012 - 12:33 | 2219652 Xanadu_doo
Xanadu_doo's picture

Most people do not have a Boom-and-Bust mentality; they have a Boom mentality. This will change soon. At least you're awake and getting perpared for the next phase.

Wed, 11/02/2011 - 10:30 | 1836573 Don Diego
Don Diego's picture

Come on Tyler, the goys that make up that committee are just advisors, close to the top, but not quite the top.

Wed, 11/02/2011 - 10:42 | 1836636 centerline
centerline's picture

They are the generals. Not the top. The top doesn't like the publicity.

Wed, 11/02/2011 - 10:56 | 1836718 DB Cooper
DB Cooper's picture

We can be sure there is no opportunity for insider information to be exchanged!  Yeah right.

Wed, 11/02/2011 - 11:05 | 1836772 Quinvarius
Quinvarius's picture

Ponzi engineers at work.  Their big concern now is innovative new ways to package US debt.  I have an idea.  Sell Treasury bonds in 1$ increments and print them on the back of glossy porn spreads.

Wed, 11/02/2011 - 11:08 | 1836797 RiverRoad
RiverRoad's picture

Good article.  I'd like to see even more light shined on all the appendages of the Bankster Cabal that runs this country.  The day every guy on the street knows what a "Bankster Cabal" is will be a very good day indeed.  Maybe then we can finally audit their "books".

Wed, 11/02/2011 - 11:19 | 1836860 Muddy1
Muddy1's picture

"The Committee convened in closed session at the Hay Adams Hotel at 9:30 a.m."  I guess open meeting laws don't apply, especially when the fox is INSIDE the henhouse.  WOW, bankers telling Treasury how to do it's job, how much debt the taxpayers should take on the the benefit of private Fing banks.

DAS director Rutherford... Kim... said, reported, etc.  We know what they had to say vs the distinct change to:

"A member then broached the subject ..." 

"Another member raised a question about the possible resumption of Supplemental Financing Program (SFP)."

"The presenting member   ..."

"The presenter noted ..."

"the presenter noted..."

"Finally, the presenter concluded..."

HOW MANY OF YOU HAVE READ THE MINUTES OF MEETINGS AND NOT READ THE NAMES OF PARTICIPANTS?  Who is this mystery presenter?

 

 

 

 

Wed, 11/02/2011 - 11:47 | 1837040 JR
JR's picture


The TBAC  of the U.S. Department of the Treasury is just a side show and a distraction, implying that here is a group meeting and making decisions that affect the economy -- and, then, expecting the people to believe that its publicly released information about the meeting reflects some kind of civic responsibility concerning the public’s financial affairs.

The real decisions, which are made in private, are funneled through these people,  the same as they’re funneled through Chairman Bernanke’s office, coming from the owners of the NY Federal Reserve Bank. It’s dangerous misinformation to listen to what these people say publicly because they are in business to make money and gain power for their handlers. And that is done by transferring the estates and wealth from the citizens of America and the world to the pockets of the financial elite. 

In short, what these people say in public can’t be trusted.  For Heaven’s sake they created a private entity in 1913 to take the money, in secret, from Americans and put it in their pockets

This country was created by citizens who wanted a transparent government; these people were crooks, criminals, from the start. They intended to have a subterfuge. The Fed is the operation intended to take the money and give it to the private investment bankers.

TBAC is just another distraction.

Thanks, Zero Hedge; that’s quite a list. The U.S. Treasury and our "government" did themselves proud for "We, the People."

 

Wed, 11/02/2011 - 12:14 | 1837184 Paul67
Paul67's picture

Let’s cut out the middle man.

 

The international banking cartel we unconstitutional gave the right to print our currency will continue to use the forces of inflation and deflation as pump in order to transfer our wealth to themselves.

 

The clear solution is to return to constitutional sovereign debt free currency, the quantity of which is regulated by constitutional law and therefore not subject to the whim of international banking cartel or a simple majority vote in Congress.

 

As the current international banking cartel FRN bonds come due pay them off with this sovereign debt free currency ‘while’ simultaneously raising the bank reserve requirements.  In this way the overall currency supply is kept close to what it is now while building a stronger based for the banking system.

 

Once all the FRN based bonds are gone, switch to a fixed 3% growth rate in the currency supply in order to cover population, asset base and productivity growth leaving only a slight inflationary pressure.  In addition, cap total gross tax receipts at 15% of GDP.  The combination of the two will result in an 18% of GDP budget for the Federal Government.  Any surplus above 15% goes into the rainy day/war fund which is also capped as a percent of GDP.

 

The 15% tax should be split between a 7.5% tariff on goods/services and 7.5% on consumption.  So the consumption of foreign goods are essentially taxed twice encouraging domestic production but not to an extreme.  Wages and investment income is tax free.  The entirety of the tax code is eliminated removing all the social engineering and crony capitalistic elements in the current tax code.

 

In order to make the consumption based taxes more progressive in nature a payment of $5,000/citizen (via a debt type card that will disallowing certain purchases) will be made thereby consolidating the whole welfare system ‘including’ social security into one system.  At $5,000/citizen, a family of four will only net pay into the system once they consume more than 200K if their consumption is split 50% foreign, 50% domestic.

 

Anyway the numbers above may need to change a bit but the basic plan of Sovereign debt free currency with balanced budgets and a simplified consumption based taxes with a consolidated welfare system are the fundamental elements of the new system.

 

I might add this is the nearly the complete opposite of the current approach.

 

Wed, 11/02/2011 - 12:42 | 1837337 dcb
dcb's picture

I think you have, or someone should have included the bio of each person there and their industry associations. OK I know who paul tudor jones is. you think being on these things gives them a heads up on future government decisions (LOL)

Wed, 11/02/2011 - 13:57 | 1837670 ricocyb13
ricocyb13's picture

Corzine booked the wrong hotel

----------------

The night before MF Global Holdings Ltd. (MF) posted its biggest quarterly loss, triggering a 48 percent stock plunge, Chairman and Chief Executive Officer Jon Corzine appeared at a steak dinner at New York’s Helmsley Park Lane Hotel for a speech to a group of bankers and traders.

----------------

http://www.bloomberg.com/news/2011-11-02/corzine-steak-dinner-speech-to-...

Wed, 11/02/2011 - 15:57 | 1838350 asteroids
asteroids's picture

No needs for BLS. The only thing we need are the actual numbers for tax receipts. Funny that these jokers know and we don't.

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