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"Supercommittee That Runs America" Urges End To The "Zero Bound", Demands Issuance Of Negative Yield Bonds

Tyler Durden's picture




 

One of the laments of the uberdoves in the world over the past several years has naturally been the fact that interest rates are bound by Zero on the lower side, and that the lowest possible rate on new paper is, by definition, 0.000%. Which is what led to the advent of QE in the first place: in lieu of negative rates, the Fed was forced to actively purchase securities to catch up to a negative Taylor implied rate. This may be about to change, because as the just released letter from the Treasury Borrowing Advisory Committee, or as we affectionately called the JPMorgan/ Goldman Sachs Chaired committee, the "Supercommittee That Runs America", simply because it alone makes up Tim Geithner's mind on what America needs to do funding wise, demand, "It was broadly agreed that flooring interest rates at zero, or capping issuance proceeds at par, was prohibiting proper market function. The Committee unanimously recommended that the Treasury Department allow for negative yield auction results as soon as logistically practical." And what JP Morgan and Goldman Sachs want, JP Morgan and Goldman Sachs get. And once we get the green light on negative yields at auction, next up will be the push for the Fed to impose negative rates on all standing securities, which means that coming soon savers will be literally paying to hold cash. And that will be the final straw.

Not only that, but beginning in just 4 short months, the Treasury may launch a brand new product: a Floating Rate Bond. From the TBAC:

The second charge was to explore the viability of Treasury issuing floating rate notes (FRNs). In particular, the presentation [attached] assessed potential client demand, optimal maturity, reference index, and reset frequency. The structural decline in the stock of global high-quality government bonds, coupled with an increase in demand for non-volatile liquid assets, should make U.S. government issued FRNs extremely attractive. Pricing for a hypothetical two year FRN was estimated to be in the arena of 3 month Treasury bills plus 8 basis points.

 

A discussion then ensued over whether 3 month Treasury bills or Fed Funds Effective was the more appropriate floating rate index. In conjunction with fixed-rate issuance, FRNs give Treasury an attractive alternative to increase the average maturity of its debt. While more analysis on the specifics of the program must be done, the Committee was unanimously in favor of Treasury issuing FRNs.

As a reminder, this is what Treasury's Mary Miller said earlier:

Treasury continues to study the possibility of issuing Floating Rate Notes (FRNs).  The Treasury Borrowing Advisory Committee suggested in its February 2012 charge that FRNs could complement Treasury’s current suite of products.

 

Treasury recognizes that FRNs may provide a number of benefits to government finance, and plans to announce a decision regarding whether or not to introduce an FRN product at the May 2012 Quarterly Refunding.

Ealier we were kidding about that PIMCO gold fund. Now that we look at tit, it may not have been a joke...

 

From the just released TBAC letter:

Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association

2/2/2012

January 31, 2012

Dear Mr. Secretary:
Since the Committee last met in early November, economic activity has continued to expand, and real GDP increased at a 2.8% annual rate in the fourth quarter, the fastest pace of growth in over a year. The acceleration in activity last quarter was supported by a rebound in stockbuilding, as businesses returned to building up inventories following the more cautious attitude displayed in the third quarter. Inventories added 1.9%-points to last quarter’s gain in output, following a third quarter in which stockbuilding subtracted 1.4%-points from growth. The lift from replenishing lean stocks helped support manufacturing production, which expanded at a 3.9% annual rate in the fourth quarter.

With inventories now better aligned with final sales, the support to industry from a positive turn in the inventory cycle will likely diminish. In addition, slowing global growth may exert a damping effect on US factory output. Despite these headwinds, early manufacturing surveys for January suggest the factory sector is faring well early in the year. Automaker production schedules indicate that this key sector should continue to expand in the current quarter.

Real consumer spending increased at a 2.0% annual rate last quarter. Spending growth was particularly strong for consumer durables; a normalization of auto and truck inventories after the Tohoku earthquake supported vigorous growth in light vehicle sales, which climbed to a 13.6 million annual pace of sales by year-end. Modest but steady gains in labor income are providing support to consumers. Employment has increased by 137,000 jobs per month on average in the fourth quarter, and the average work week increased last quarter after declining in the third quarter. Consumer spending was also supported by a decline in retail gasoline prices, undoing some of the drag on purchasing power witnessed earlier in 2011. Even so, the holiday shopping season was a modest disappointment. One possible explanation is that households are seeking to bring saving rates back up, after lowering saving earlier in the year to smooth consumption growth in the face of the hit from higher energy prices. So far, indicators regarding consumer spending in early 2012 are mixed.

After growing vigorously for much of the expansion, real business fixed investment spending cooled off to a 1.7% pace of growth last quarter. Real outlays for equipment and software expanded at a trend-like 5.2% annual rate. Meanwhile, business spending for structures surprisingly declined at a 7.2% rate. Spending on mining-related structures fell off sharply, as lower natural gas prices have reduced the economic feasibility of capital spending in this area. Residential investment, however, expanded at a 10.9% pace. While housing indicators generally remain mixed, there have been some encouraging signs recently, particularly a jump in homebuilder sentiment. Mortgage rates have recently fallen to new all-time lows, providing an important support to housing demand.

Declines in real government spending continue to drag on overall economic growth. Real government outlays declined at a 4.6% annual rate last quarter. The decline was exaggerated by a big drop in the volatile defense spending category. While this decline may be partly reversed in coming quarters, real defense outlays are generally set to trend lower. Real outlays by state and local governments declined at a 2.7% rate, the 13th decline in the last 16 quarters. Late last year, policymakers extended expiring payroll tax and unemployment benefit provisions. Those programs are now extended through late February, and most analysts expect they will be extended through year-end.

Real exports expanded at a 4.7% pace, the same as in the third quarter. However, growth in foreign markets has slowed decisively, from Europe to large Emerging Market countries including China and Brazil, and this slowdown should be expected to restrain export growth before long. While the trade spillovers from slower European growth are likely to have a negative effect on the US economy, sentiment regarding financial spillovers has improved recently, as aggressive actions by the ECB to provide liquidity to the banking system has helped to stabilize the sovereign debt crisis.

Inflation has moderated in recent months, largely due to a decline in energy prices. In the three months ending in December, the PCE price deflator increased at only a 0.1% annual rate. Outside of food and energy, core consumer prices increases have also been modest as the core PCE deflator increased at a 1.4% annual rate in the past 3 months and 1.8% over year ago. The easing in commodity prices has taken some pressure off of core goods prices, and the normalization of vehicle inventories has allowed vehicle prices to cool off after surging earlier in 2011. Even though the unemployment rate fell by a half percentage point last quarter, wage inflation remains subdued: average hourly earnings are up only 2.1% on a year-ago basis. Contained labor costs should continue to limit the pace of consumer price inflation.

Monetary policy has remained active. At the January FOMC meeting, the Federal Reserve unveiled new Committee forecasts for the path and timing of interest rates. Moreover, the FOMC statement pushed back the guidance on the time for the first rate hike, from mid-2013 to late 2014 at the earliest. The revised guidance has further served to keep interest rates quite low. For now, it would appear the Fed has exhausted their options for easing policy through communications. The prospects for further asset purchases remain in flux. Committee members have publicly expressed differing views on the desirability of such action. But, importantly, Chairman Bernanke’s comments in the Q and A following his recent press conference lowered the bar considerably for further Fed asset purchases.

Against this economic backdrop, the Committee’s first charge was to examine what adjustments to debt issuance, if any, Treasury should make in consideration of its financing needs.  The Committee did not feel that any changes to Treasury coupon issuance were necessary at this time.

There was a lengthy discussion regarding the bid-to-cover ratios at recent Treasury bill auctions. It was broadly agreed that flooring interest rates at zero, or capping issuance proceeds at par, was prohibiting proper market function. The Committee unanimously recommended that the Treasury Department allow for negative yield auction results as soon as logistically practical. 

The second charge was to explore the viability of Treasury issuing floating rate notes (FRNs). In particular, the presentation [attached] assessed potential client demand, optimal maturity, reference index, and reset frequency. The structural decline in the stock of global high-quality government bonds, coupled with an increase in demand for non-volatile liquid assets, should make U.S. government issued FRNs extremely attractive. Pricing for a hypothetical two year FRN was estimated to be in the arena of 3 month Treasury bills plus 8 basis points.

A discussion then ensued over whether 3 month Treasury bills or Fed Funds Effective was the more appropriate floating rate index. In conjunction with fixed-rate issuance, FRNs give Treasury an attractive alternative to increase the average maturity of its debt. While more analysis on the specifics of the program must be done, the Committee was unanimously in favor of Treasury issuing FRNs.

In the final charge, the Committee considered the composition of marketable financing for the remainder of the January 2012 to March 2012 quarter and the April 2012 to June 2012 quarter. The committee’s recommendations are attached.

Respectfully,

 

____________________________________
Matthew E. Zames [JP Morgan]
Chairman

 

____________________________________
Ashok Varadhan [Goldman Sachs]
Vice Chairman

 

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Wed, 02/01/2012 - 11:14 | 2116281 q99x2
q99x2's picture

I hear Chinese laughter out my window. I think it is coming from all the way across the Pacific.

Wed, 02/01/2012 - 11:35 | 2116376 Joe Davola
Joe Davola's picture

It's all their fault, if they hadn't convinced the west that negative numbers were legit.

Wed, 02/01/2012 - 11:16 | 2116291 sudzee
sudzee's picture

History rears its ugly head. Gov't policy to hyperinflate to prosperity. Gotta find that Dow 1,000,000 hat. 

Wed, 02/01/2012 - 11:17 | 2116294 gaoptimize
gaoptimize's picture

Logical pre-cursor to coercing retirement accounts into Federal paper.  They have to know this is bullish for precios metals.

Wed, 02/01/2012 - 11:19 | 2116305 unununium
unununium's picture

How do I go short the negative yielding bonds and long the floating-rate?

Is MF Global's primary dealer spot still available?

Wed, 02/01/2012 - 12:22 | 2116307 rufusbird
rufusbird's picture

Meh! So what is the big deal? The short term bills already already at a negative "real" return anyway.

Wed, 02/01/2012 - 11:20 | 2116314 Monkeyfister
Monkeyfister's picture

So all those .gov employees who have corraled their TSP retirement savings into the G-Fund (Gov Securities) for safety, are suddenly going to start losing money, too? Dang, it's the #2 top performer of all the TSP funds, second only to the F-Fund (Government, corporate, and mortgage-backed bonds). This does not bode well for the employees. BIG upside for the gov, though-- as employees will simply drop TSP, and start stuffing their cash into their mattresses, the "Matching Funds" promise from the gov will be reduced. Heckuva job, Timmeh!

 

Wed, 02/01/2012 - 12:04 | 2116484 bbq on whitehou...
bbq on whitehouse lawn's picture

Governments dont hire people with critical thinking skills.

Wed, 02/01/2012 - 11:22 | 2116321 SwingForce
SwingForce's picture

My YTM Bond Yield Calculator doesn't work with negative input fields, damn.

Wed, 02/01/2012 - 11:23 | 2116323 alien-IQ
alien-IQ's picture

I find it difficult to understand how it is possible that people have not, en masse, decided to set each and every bank in sight on fire.

Or to put it another way: deposit one gallon of gasoline and sign it with a match.

Wed, 02/01/2012 - 11:28 | 2116346 madcuban
madcuban's picture

GAME OVER

Wed, 02/01/2012 - 11:31 | 2116360 kaiserhoff
kaiserhoff's picture

Gotta love it when the Soviet Central Planners panic.

This screams DEPRESSION!

Let's see now, we could give our tyrant class more new toys to play with, or we could let free markets price bonds, real estate, and California...  Don't hold your breath.

Wed, 02/01/2012 - 11:35 | 2116368 Quinvarius
Quinvarius's picture

Yes.  Have the Fed pay the Treasury interest on money the Treasury borrows and pretend it isn't just accelerated printing.  Dudes.  Buy gold and silver.  No one is stupid enough not to see what this is going to do.  Every day I wake up amazed that silver is not triple digits yet.

Wed, 02/01/2012 - 11:37 | 2116383 lolmao500
lolmao500's picture

The pension funds are gonna LOVE THIS...

Wed, 02/01/2012 - 11:39 | 2116392 Nostradamus
Nostradamus's picture

Deputy Assistant Secretary (DAS) for Federal Finance Matthew Rutherford noted that any decision with regard to permitting negative rate bidding and awards in Treasury bill auctions would likely be made at the May refunding.

http://www.treasury.gov/press-center/press-releases/Pages/tg1404.aspx

Wed, 02/01/2012 - 11:43 | 2116394 Shizzmoney
Shizzmoney's picture

The only reason I have a bank account is a) direct deposit/bank wire ability and b) to pay bills.  I would NEVER put my money in a bank to save, in this climate.  I know this; and I don't HAVE any money!

Two places where, wehn if I ever get money, that I would save?  A) The Bank of Sealy and B) Buy PMs, buy a vault and a gun, and see the slow (until shit hits the fan), yet positive, returns roll in. 

Poker players learned their lesson from Full Tilt Poker (I got shorted $4500....many lost more).  Investors learned their lession from MF Global.  Soon, the populace will learn when these assholes rape pensions.

Wed, 02/01/2012 - 11:42 | 2116402 willien1derland
willien1derland's picture

Actually, if an entity (real, corporate, GSE) purchases a large enough position the negative interest rate bonds include a short form to 'pre-apply' for a government funded bail-out...This approach also supports the recent revelation by the WSJ that money now has the property of 'vaporization' --> at least now its 'transparent'

 

Wed, 02/01/2012 - 11:48 | 2116416 Sutton
Sutton's picture

The fucks at MF Global have given  me a -28% return on my capital.

Wed, 02/01/2012 - 14:25 | 2117062 MsCreant
MsCreant's picture

I wonder if they can take a tax write off when 1.2 billion "vaporizes?"

I am sorry you were vaporized.

Wed, 02/01/2012 - 14:44 | 2117131 slewie the pi-rat
slewie the pi-rat's picture

it is truly sad when a fellowZ has a bad accident and is wearing paper underwear which has certainly seen better daze...

this is so bad, i can't help looking!  OMG!!! look at that! 

don't stare, like that!   jeeeez!

Wed, 02/01/2012 - 11:48 | 2116417 limabean_esquire
limabean_esquire's picture

knuckleheads -  the current situation is that the government is precluded from issuing T-Bills at negative yields.  Therefore, the primary dealers buy them at o% and then immediately sell them at negative yields - locking in a profit.  By changing policy, the government will be issuing debt more cheaply, effectively taking out the middlemen (GS, Citi etc.).  Whether buying T-Bills at negative rates is better than storing your money in a bank or mattress or your anus is debateable but spare me the paranoia re: "Supercommitee".

Wed, 02/01/2012 - 13:03 | 2116731 viahj
viahj's picture

haha, you think that GS is an actual "middleman" between the Fed and Treasury

Wed, 02/01/2012 - 15:00 | 2117202 slewie the pi-rat
slewie the pi-rat's picture

i didn't junk you, lima, but i might later

why so tough on poor, poor tyler, when he's not being paranoid, in the first place?  and the "knucklehead" readership and those who join you here?

script of yours?

do i have this right?  the PDs step into the auctions, buy X, Y or Z @ x,y,z, % interest, and sell the X, Y or Z later at a profit?  oh, wait---a "locked-in" profit?  you mean like a bankster handling (someone's) debt at a profit to the bank?

that's what i thought you said, and i will junk you now

i'm #4

but, since this is your very first post, here, i will change it to a greenie and give you a welcome kiss

now go wash your mouth;  you have two reasons, asswipe!

Wed, 02/01/2012 - 11:54 | 2116438 Benjamin Glutton
Benjamin Glutton's picture

You have 90 days to deposit or spend any and all paper currency after which point it will be invalid for all transactions.

 

no need to seize the gold just outlaw paper.lol

Wed, 02/01/2012 - 11:58 | 2116445 DollarMenu
DollarMenu's picture

It will probably show up on bank statements as a 'fee' determined monthly by the balance.

Most will not even notice for several statement cycles, they are so used to

unreceipted 'tap and go' purchaces, the fees will go as unnoticed as a latte or a big mac.

Somewhat related, has anyone noticed how really crappy the currency has been lately?

When is the last time anyone has seen any really new bills?

The stuff being handed around is one step up from asswipe.

I went looking for new bills to give as Christmas gifts, and the local bank had only

18 $100 bills to choose from, all very used - the teller went to two other stations to gather the selection.

The apologetic teller said that the currency supply was 'outsourced' to the company that serviced the ATM's.

Here I thought it was one of the bank's jobs to monitor and ensure the good condition of the currency they handled.

I guess I'm still in the 20th century. Maybe 19th?

Wed, 02/01/2012 - 14:14 | 2117014 I only kill chi...
I only kill chickens and wheat's picture

Yea, I did a ATM withdraw for 400 and got sequentially numbered 2008 bills. Looked brand new.

Wed, 02/01/2012 - 18:42 | 2117491 akak
akak's picture

Somewhat related, has anyone noticed how really crappy the currency has been lately?

When is the last time anyone has seen any really new bills?

The stuff being handed around is one step up from asswipe.

YES!  I have been noticing that trend as well, and for at least the last five or six years now, too.  The physical quality  of just about every denomination of US bills has fallen precipitously, to the point that I am reminded of being in Ecuador in the mid-1990s just at the end of a period of hyperinflation, when ALL physical currency was paper bills (no coins), and the smallest value ones, in particular, were almost literally dissolving while in use --- it became a constant game to try NOT to be given any really shitty ones, while simultaneously trying to pawn off on others the really shitty ones that you had inadvertently previously accepted.  What the fuck is going on with paper bills in the USA nowadays?

Wed, 02/01/2012 - 11:58 | 2116449 Hobbleknee
Hobbleknee's picture

Declines in real government spending continue to drag on overall economic growth.

 

Wut the wut?  It's like bizzaro world.

Wed, 02/01/2012 - 11:59 | 2116451 QuantumCat
QuantumCat's picture

Return of capital, vice return on capital.  The premise is that the US government will not default, and you are paying the government to be your banker as opposed to stuffing cash into a subordinate (in)solvent institution which will fail (just) before government does.  Everybody seems to forget how much debt is still outstanding... until that is resolved (restrucutured, wiped out), the FRN live on to support a failed system. Cash will have to be king (even if just for a day) before the long awaited hyper-inflation can begin. The timing will be ridiculously tricky... and thus the value of a gold position.

Wed, 02/01/2012 - 11:59 | 2116453 sbenard
sbenard's picture

Uh, I think we call that STEALING! More redistribution of wealth! Why is it that many of the elitists think that stealing is fine if done by them TO themselves!

Wed, 02/01/2012 - 12:00 | 2116464 battle axe
battle axe's picture

Please bend over and relax, this will only take a second. Signed: Your friends at JPM and GS

Wed, 02/01/2012 - 12:00 | 2116466 blueRidgeBoy
blueRidgeBoy's picture

real rates are already negative, so not sure I see the difference.  Before, the negative rate was due to under-reporting/manipulation of the CPI.  Now it's out in the open.  Is that the difference?  Not trying to be a wise-ass....

Wed, 02/01/2012 - 12:10 | 2116511 Catullus
Catullus's picture

The difference is most savings accounts are actually money market funds and a negative notional rate means there will be less money in the savings account every month. That means you actually lose money every month and not just purchasing power

Wed, 02/01/2012 - 12:55 | 2116695 slewie the pi-rat
slewie the pi-rat's picture

so money + purchasing power is somehow different form "money"?  can we securitize and rehypothecate that difference?  let's!  viola!  a new product for 'today's' finance!  so you, dear client will be absolutely safe no matter even if you give us all your money and then some, you will still be able to look forward to a secure retirement of carefree bliss and  bingo, ?

i'm not sure how some people know so much, but even slewie knows that PMs will still be PMs no matter what

why even try to convince people of these three facts anymore?

  1. PMs = money
  2. PMs = savings
  3. PMs = purchasing power
  4. PMs = no fuking counterparty
  5. PMs = need no fuking "state guarantees"

sorry, you know how carried away i get!  three!  L0L!!!

why even try, if people don't know by now?  even trolls and spammers are probably wondering what's next at this point

6, BiCheZ, 6!

Wed, 02/01/2012 - 12:42 | 2116656 csmith
csmith's picture

Is there a difference?

 

Yes, a huge difference. Negative interest rates due to a nebulous "inflation" factor are not something 1 in 100 people understands.

However, 99 out of 100 people understand it when they must PAY to put their savings somewhere.

 

Gold to $20,000/OZ.

Wed, 02/01/2012 - 12:03 | 2116477 aleph0
aleph0's picture

"You have 90 days to deposit or spend any and all paper currency after which point it will be invalid for all transactions."

 

Germany .. issued dates on their new notes .... in 1923.

 

Wed, 02/01/2012 - 12:06 | 2116492 Catullus
Catullus's picture

Exactly which money market fund would buy a negative yield note? There'd be no way but to break the buck on that.

Wed, 02/01/2012 - 12:08 | 2116499 Trudy Rendel
Trudy Rendel's picture

Note to self: Must advance calendar 2 months.

Wed, 02/01/2012 - 12:09 | 2116506 SillySalesmanQu...
SillySalesmanQuestion's picture

I'll bet that this idea was hatched over a few cocktails, Jamie, Lloyd and Timmah are laughing and decide to hell with any pretense any longer, lets see how dumb the sheepie really are... can they really be that dumb...?

Wed, 02/01/2012 - 20:57 | 2118478 kurt
kurt's picture

Reading the report it looks like it was hatched by Jamie and Lloyd for Timmah to sell. I'm feeling sickened to see how the main points line up with current financial "news" stories. Super-slick, too slick. 

Wed, 02/01/2012 - 12:18 | 2116554 chistletoe
chistletoe's picture

hey.

 

If anyone would care to loan me a few dollars,

for a slightly negative return,

I believe I can find a way to buy physical with it

and pretty much guarantee their safety ...

 

what's not to like?

Wed, 02/01/2012 - 12:36 | 2116562 slewie the pi-rat
slewie the pi-rat's picture

slewie knew!

way b4 QE2 even, it was pretty obvious that the goobermints couldn't afford to pay "interest" any more on the ball000,000ning (peoples') debts following the bankster dynamitiZation of the global enonom via ww.housingHosing.con, and the beagleBoys looting the Treasury in broad daylight, with the delayed consent of those "governing", certainly not those "governed", while pawning their bad debts and losses off on thePeonieFarmTM

i, out of debt and sansCreditCard for 25 years, began to look forward, eagerly, to the day of my next loan: as soon as the banksters will pay me 3% to take on their dog-shit fiatsco, i will take a mil $z.   trust me!

this is common sense, and the bankster bullshit is falling so flat that "retail" is gonna deleverage till the kingdom cometh, no matter wtf they miss, "paper inverstment"- wiZe, and the asswipes are gonna hafta pay us like the all-starz we BE in order to get us back in their ridiculous con-game

we are (so) unworthy, loan-wize, that they will hafta pay us to go back into debt "risk-free".  who could make this up? 

my $30K interest income for the year probly won't buy me lunch by the end of the year, even tho the "negative rate" is an "investor protection against deflation" for sure!

curiouser & curiouser doesn't begin to catch where "economics" is "evolving to"

gross, is pimpcoPimpPissed that his little "rentier" game has been superceded by the beagleBoys' wealth grabs, but there isn't a damned thing he can do about it, except whine, is there? 

just re-define zero as 0=1 and the neg interest works!  if we do the math, we get 2 = 2 + 0 = 2 + 1

so, now, 2+ 2 = 6, BiCheZ!!!  chickenfukingdinner!

100 years from now, this moment will be known a the digitalEclipse that led to thePeoples'Apocalypse.  more of what happens, conceptually, when 0 takes on a value of 1 in theAgeofDigitalAccounting, below, after...

...at least leo is having one of his better days, here, we can be sure!  i hope he tries an unassisted back flip and lands on his ear!

i don't disagree w/ tyler, here: savers will be literally paying to hold cash = final straw

conceptually, as i just said, this is nonpareil

as the meaning of "law" is slowly made into mush, the contracts involved in "it" will become exponentially more incomprehensible than usual!  did you read this mofo shit?  me neither.  that zombie bankster smell is pukariffic slewie repellant! when tyler explains it, maybe i'll it'll make it past my snoz, but no promises, so you better make it funny, durden!

but i would also suggest that in addition to what tyler is stating, there is also the dynamic of [if you just subsitute the name of the borrower here to slewie, and the banksters become the lenders] paying the pretty peonies to take on credit

probalbly b/c they're having trouble getting control of some of the remaining assets? but how are they gonna claim my household chattel and send me to the ww.fema.Debtor.Prison.cmp if i don't have any debt? 

that's right!  medical & dental!  so, i'm working on developing my desire to ignore sickness&pain and enjoy soft foods!  analgesics, BiCheZ!  home grown!

but you gotta admit we have great banksters don't we?  wwchaos.con, and a simultaneous reminder of where one nuclear sub is and here we have a picture of it, too!  one!  ooooh!  scaaaareee!

Wed, 02/01/2012 - 12:40 | 2116646 El Hosel
El Hosel's picture

Yeah, "was prohibiting proper market function"

That all Depends on what your definition of "was" "is"..... and what your definition of what "Market" "was" pre "new normal".

Wed, 02/01/2012 - 13:00 | 2116706 fuu
fuu's picture

"so, now, 2+ 2 = 6, BiCheZ!!!  chickenfukingdinner!"

Total.Fucking.Art. man.

 

Also a couple of good books to have laying around:

Where There Is No Doctor

Where There Is No Dentist

Wed, 02/01/2012 - 13:22 | 2116816 Manipulism
Manipulism's picture

And now in English, please.

Wed, 02/01/2012 - 14:24 | 2117037 slewie the pi-rat
slewie the pi-rat's picture

 

 

  1. things are ZER0 bound; ["english" will not help; this is "given" here; smell the coffee, mani]
  2. they are gonna fix it
  3. they = those who profit from "breaking" it and "fixing it"  [imagine the entire fire department running around starting fires all the time][or the entire poleeece dept involved in the fleeeece department, and offering to sell you protection, perhaps]
  4. so, they are just continuing to help things along since they last time they fuked it all up, and
  5. we are so lucky to have them b/c we just wouldn't know what to do without them
  6. same shit, different day, in general, but specifically, this is something new, BiCheZ!
  7. please ask your english professor if negative interest are related to negative GDP, and if so, how?
  8. what would you feel like if someone came up and asked you for a loan and wanted you to pay him/her interest for taking your money?  would it not occur to you that if you just gave them the money, it might be as good, or better?  in the "long run" for you?
  9. now, imagine someone coming up and offering to loan you money and pay you interest, too
  10. now, exhale...  and be fully present in your body, if that option is still available to you...
Wed, 02/01/2012 - 12:49 | 2116677 Jim in MN
Jim in MN's picture

We had to destroy your bank account in order to save it.

Who said the lessons of 'Nam were lost?

Wed, 02/01/2012 - 12:55 | 2116693 mc_LDN
mc_LDN's picture

Has anyone picked up on the Sicilian Pitchfork Movement that is picking up steam in Italy??? Western Media is blacking it out... Read!!!

http://www.infowars.com/sicilys-pitchfork-movement-in-revolt-western-med...

Wed, 02/01/2012 - 13:19 | 2116799 frosty zoom
frosty zoom's picture

here's the facecrook page:

http://it-it.facebook.com/pages/Movimento-dei-Forconi/254645254561355

these people are angry!  every post is ALL CAPS!

TUTTI ALLA FORCONI!

Wed, 02/01/2012 - 13:09 | 2116748 I should be working
I should be working's picture

I actually applaud the Treasury on this one.  Give the market what it wants.  Investors will still rush in, because like any bubble you can always make money by selling higher to the next sucker, right?  A 0% yield can always go to -1%? Buy, buy buy (gold that is).

Wed, 02/01/2012 - 13:11 | 2116763 frosty zoom
frosty zoom's picture

i wonder if they're going to print negative money.

"uh, you still owe $27 for the cabbage, mademoiselle.  the cabbage is $212.  you gave me a $90, a $172, and a $neg77 which makes $185."

"oh, so sorry!  do you have change for a $491?"

 

 

Wed, 02/01/2012 - 14:24 | 2117058 Sunshine n Lollipops
Sunshine n Lollipops's picture

"$491s changed to $455s an hour ago. Do you have a $526? Uh-oh, cabbage just went to $260. Hmmm. Is that a Rolex?"

Wed, 02/01/2012 - 14:41 | 2117125 frosty zoom
frosty zoom's picture

time is money for most,

but money is time for very few.

••

"and, uh, kinda.  it says oyster on it.  how about the watch and you give me four $neg4s and that cat."

••

you know,

instead of a gold standard for our money, we need a moral standard.

 

Wed, 02/01/2012 - 14:52 | 2117135 frosty zoom
frosty zoom's picture

NEWSFLASH!!!^%$&!!!!

Honesty Futures (HPLFCK) UP 23% AS WE SPEAK!

Nonetheless, Trading on the Dignity Floor was at an all time low...

Wed, 02/01/2012 - 13:13 | 2116767 Downtoolong
Downtoolong's picture

We already have negative yields in real terms on most government securities, especially if you look at them on an after tax basis. It’s pathetic that this is the best the financial industry has to offer. They rally and champion the idea of individuals saving for their own retirement then produce shit like this, making it impossible to ever get there. If they were building cars their best model would probably be a Yugo.

Wed, 02/01/2012 - 13:20 | 2116804 frosty zoom
frosty zoom's picture

it's pathetic that these crooks are considered an "industry".

AL FORCONI!

Wed, 02/01/2012 - 14:38 | 2117117 Sunshine n Lollipops
Sunshine n Lollipops's picture

"It’s pathetic that this is the best the financial industry has to offer."

If you think of it as the "robbery industry" it makes a lot more sense. Stealing, not quality products, is the goal.

Wed, 02/01/2012 - 13:15 | 2116785 eddiebe
eddiebe's picture

It's official: Time to back up the truck for PM's and commodities in general.

Wed, 02/01/2012 - 13:18 | 2116795 Stuck on Zero
Stuck on Zero's picture

It all makes sense to me.  There are literally tens of trillions of hot cash sloshing around the world looking for a place to park.  Anything that looks vaguely safe gets showered with offers: "take my money!" Eventually someone will offer their furnace as a place for people to put their money and there will be no end to offers.

Wed, 02/01/2012 - 13:36 | 2116815 cranky-old-geezer
cranky-old-geezer's picture

 

 

Oh, so now banks are gonna pay a premium to buy Treasuries.   "5% over spot" or whatever the percentage is.

Why not?  People pay a premium to buy PMs.  $X over spot.

After all, Treasuries are the safest investment around, guaranteed to pay off, AAA, "full faith and credit", all that.

Gotta keep that Treasuries market going, uncle sam needs $150 billion a month. 

So much for the anti-PM "gotta have yield" argument.

Do they know something we don't?  Euro sovereign debt market about to collapse?  Everbody flooding into Treasuries?

 

Wed, 02/01/2012 - 14:17 | 2117023 Liquid Courage
Liquid Courage's picture

This is the land of
The mad that false premises
Lead to in the end

Wed, 02/01/2012 - 14:18 | 2117025 f16hoser
f16hoser's picture

Is this due to the demise of the petro-dollar?

Wed, 02/01/2012 - 14:58 | 2117215 Strange-Currencies
Strange-Currencies's picture

They are basically paying to hold cash, via inflation

 

Wed, 02/01/2012 - 15:30 | 2117390 gnomon
gnomon's picture

Forget Gold, if this NIRP is instituted, and it filters down to the savings banks, Silver will go off like a skyrocket.  This trial balloon is another very big canary in the coal mine dropping dead.

Wed, 02/01/2012 - 18:15 | 2117961 slewie the pi-rat
slewie the pi-rat's picture

in the US, both these horses are the property of our ladyLiberty

she loves them both and so shall we

today, people compare when silver got to 50 and gold to "a thou" and now silver has just hit fifty and can't hold it, and lQQk at gold!

but people couldn't buy/sell/hold/own gold coins and bullion in the '70's and early 80's

they cound 'only' deal in jewelry "by law" for gold

but they could own silver coinage, and bullionand gold mines

and the huntBros went after the silverBanksters b/c of the fiat banksters and clearly knew whom the were fighting and he was a man and he had a name and his name was rockefeller and they called him by his name as they fought him here in our lives, in real time

and slewie bought silver and gold jewelry and actually owned a portfolio of gold mining stocks (!) the only stocks i owned at the time and they were held in ADRs and they paid interest like you would not believe, too!

things are different, but very much the same

  • we can own both coins and bullion and there is no compensatory legal difference any longer
  • gold costs "more"
  • silver and the miners now cost "less"

the thing about the feud is that it was billed as the oil & silver v the bankster;  and the bankster won the fight.  oil & silver lost to paper which is better than "jesus" at escaping crucifixion!  but the bankster was standard oil, too.  so the hunts were just screwing around with the inflationary drama, too!  nelsonBunker had hit the libyan motherlode and was the richestBipedStanding and mrRockefeller coulda kissed slewie's ass too!  rocky owned the casino, and they knew it, too, but they went balls2wall and rocky had to cheat to beat the new meat on the street.  they lost a Bil+$ but they owned 'a' piece of the motherLode and were just "funnin"!

they were from texas, or was that just one of them?  their daddy had a family here, a family there...lotta half-brothers and sisters around for christmas, i'm sure.  lamar founded the AFL in 1959 b/c the NFL refused to sell him a team!  he coined the phrase "superBowl".  he wasn't a big playa in the silver thingy but was the Hunt who settled the lawsuit in 1989 with less then $3 million of his money and a lotta merrilLynch money in the near $60-million compensation for those 'injured' while funnin in their silver playpen

these guys got quite a bit of attention, and they fukin loved it too!  poor howardHughes! he probable needed a load of chinaWhite just from reading about them!

anyhow whatever happens, i don't think we'll see people pushing wheelbarrows of silver dollars to the dealers (and some banks) to get this coinage melted and into those fabulous crimex bars in 2012!!! 

picture mrT pushing the wheelbarrow and how much he was rootin for rocky...not!

welcome to america, BicheZ!

whose deal is it?

Tue, 09/25/2012 - 04:00 | 2827100 resurger
resurger's picture

The -ve FRN will put an end to the shadow banking system as depositors will claim their money and go into gold/silver and watch the leveraged towers collapse

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