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Treasury Admits It Underestimated Debt Needs, Predicts Ceiling Breach In 2012; $600 Billion More Debt In Second Half

Tyler Durden's picture





 

Back on April 30, when the US Treasury, together with the TBAC chaired by Matt Zames (who as everyone knows is being groomed to take over JPMorgan after Jamie gracefully steps down) sat down put together its latest debt funding needs projection, we openly mocked the numbers when we said "Now obviously we are all for the US needing less debt, however we wonder: did the US discover some magical source of tax revenue: last we checked the companies with $100+ billion in cash were paying virtually zero taxes, and US workers were making less and less courtesy of more and more jobs being converted into temp jobs with lower wages, and less withheld tax as a result." Sure enough, minutes ago the Treasury just admitted what we and our readers knew all along: in its quarterly Treasury refunding appetizer, it noted that during the "September 2012 quarter, Treasury expects to issue $276 billion in net marketable debt, assuming an end-of-September cash balance of $60 billion.  This borrowing estimate is $12 billion higher than announced in April 2012.  The increase is primarily due to lower receipts, higher outlays, redemptions of portfolio holdings by the Federal Reserve System, and higher issuances of State and Local Government securities." In other words: if only it wasn't for that pesky lack of revenue and excess spending our mocking would have been for nothing. Alas, it was spot on, and as a result instead of needing $253 billion in fiscal Q4, the US will need $272 billion (after having a $5 greater financing need in fiscal Q3, calendar Q1 as also expected).

Finally, in calendar Q4, the Treasury expects to get back to its roots, at which point it will need $331 billion in debt, 21% more than in calendar Q3, and 17% more than in calendar Q4 of 2011.

Alas, as the chart below shows, which forecasts US Treasury debt based on the just released numbers, all these numbers will ultimately need to be revised even higher as it is now inevitable that the debt ceiling will be breached in 2012, only not as the Treasury predicts toward the end of December, but well before that.

Some other factoids:

  • Treasury forecasts total debt on September 30, 2012 of $16,132 billion and total debt on December 31, 2012 of $16,448 billion. As a reminder, the debt ceiling is $16,394 billion
  • Total debt incurred by the US in the second half of calendar 2012 is estimated to be $592 billion; total financial needs are expected to $603 billion.
    • Total debt incurred in calendar Q4 is expected to be $316 billion, higher than both Q3 ($276 billion) and Q4 2011 ($310 billion).
  • Total debt incurred by the US in all of calendar 2012 is estimated to be $1.165 trillion
    • Total debt incurred by the US in all of calendar 2011 was $1.051 trillion.
  • In other words, calendar 2012 will see a 10% increase in total debt, while total US GDP is expected to rise by just under 2% for the full year.
  • Assuming the Treasury's numbers are correct, each calendar day in the second half will see the US Treasury issue on average $3.3 billion in debt every day, and $136MM every hour; on a work day basis, this amounts to $4.8 billion in new debt each work day, and $200 million every working hour.
  • Assuming 1% sequential growth in GDP, the US will close 2012 with a debt/GDP ratio of 103.4%.
  • Keep in mind, all these numbers will be revised worse in 3 months when the next refunding statement is released.

One word: "Sustainable"

 


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Mon, 07/30/2012 - 16:12 | Link to Comment flacon
flacon's picture

When will this shit ever end? 

Mon, 07/30/2012 - 16:12 | Link to Comment SilverTree
SilverTree's picture

It ends when we die.

Mon, 07/30/2012 - 17:05 | Link to Comment veyron
veyron's picture

Will we all be dying in 2012?

Mon, 07/30/2012 - 17:09 | Link to Comment negative rates
negative rates's picture

In debt we trust.

Mon, 07/30/2012 - 17:21 | Link to Comment I am more equal...
I am more equal than others's picture

Only those selected for termination.  Your notice will be hand delivered by mob rule. 

Mon, 07/30/2012 - 17:32 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Long rope and guillotines then?  Better start organizing your mob now.

Tue, 07/31/2012 - 02:56 | Link to Comment Simon Endean
Simon Endean's picture

Well, here's hoping we all renew at Carousel!

Tue, 07/31/2012 - 04:43 | Link to Comment 10mm
10mm's picture

Lock in on those high capacity mags,they are starting to move like hot cakes.

Mon, 07/30/2012 - 17:42 | Link to Comment lunaticfringe
lunaticfringe's picture

Except for the death thing which is kind of a drawback, I find this all fantastically bullish!

Mon, 07/30/2012 - 18:50 | Link to Comment Rainman
Rainman's picture

Obama '12 bitchez...they just gotta make it to 11/7 !!

Mon, 07/30/2012 - 17:47 | Link to Comment circusoflife
circusoflife's picture

awesome user pic!  The only people who die, are those who want to die....

Mon, 07/30/2012 - 22:05 | Link to Comment The Gooch
The Gooch's picture

Yes! and we'll be dying in 2013 too!

 

Mon, 07/30/2012 - 16:13 | Link to Comment Pladizow
Pladizow's picture

"This borrowing estimate is $12 billion higher than announced in April 2012"

Isnt that only 3 days worth of borrowing?

Mon, 07/30/2012 - 16:20 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Is anybody here surprised?

"It's all George Bush's fault!" -- Barrack Obama

Mon, 07/30/2012 - 16:27 | Link to Comment RationalPrepper
RationalPrepper's picture

Even more surprising - it does look like they'll manage to avoid the breach until after the elections.

Mon, 07/30/2012 - 16:37 | Link to Comment JLee2027
JLee2027's picture

Too bad. One would have hoped the Jaws of Hell would have opened to bite their ass well before.

Tue, 07/31/2012 - 01:53 | Link to Comment DeadFred
DeadFred's picture

There's still time, keep those fingers crossed.

Mon, 07/30/2012 - 17:35 | Link to Comment Papasmurf
Papasmurf's picture

Great when a plan comes together.

Mon, 07/30/2012 - 18:04 | Link to Comment NotApplicable
NotApplicable's picture

The key to your phrase is "look like." I would have been shocked if they didn't find a way to conceal the breach until after the selection.

Mon, 07/30/2012 - 16:38 | Link to Comment New_Meat
New_Meat's picture

"Missed it by this much!"

Mon, 07/30/2012 - 17:15 | Link to Comment mikla
mikla's picture

Missed by that much

Good quote!

Of course, the Treasury is wrong.  As documented by ZH a year ago, the "run-rate" for debt issuance is 30-40% higher than the projected rate (mentioned in this article), because the "off-balance-sheet" liabilities are being forced back onto the balance sheet as cash-flow payments must be made.

The *real* issue is far higher than what is listed here.  Governments only fall through cash-flow problems, and those are in the middle of the exponential blowout.

Mon, 07/30/2012 - 17:30 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Sounds like we need another unfunded war or two.

Mon, 07/30/2012 - 17:46 | Link to Comment mikla
mikla's picture

Krugman was serious about the Alien Invasion.

Mars Attacks

Mon, 07/30/2012 - 20:04 | Link to Comment Offthebeach
Offthebeach's picture

We need to have it here.
Keep all the Haliburton contract see ice jobs here. On both sides. This.k of the Krugman approved Keynesian multiplyer effect with all the destruction! Not to mention advertising rights and reality TV show potential!

Mon, 07/30/2012 - 16:20 | Link to Comment Michael
Michael's picture

It's like magic, I think about a subject like this the night before, something I haven't heard about in a while, and the story magically appears on ZH the very next day. I wonder what makes that work.

Mon, 07/30/2012 - 17:23 | Link to Comment DavidC
DavidC's picture

Ah Michael, it's not like magic, it IS magic!

DavidC

Mon, 07/30/2012 - 18:09 | Link to Comment NotApplicable
NotApplicable's picture

Reply of the day! Kudos.

Mon, 07/30/2012 - 17:34 | Link to Comment earleflorida
earleflorida's picture

the amorphous cloud of like minds in surreal slumber awaken always through the 'music of the spheres'

Mon, 07/30/2012 - 16:22 | Link to Comment FlyoverCountryS...
FlyoverCountrySchmuck's picture

WHAT???????

You mean MSNBC/The Daily Show, and Will&Grace are not the entire economy???

 

YOU MUST BE A THOUGHT CRIMINAL!!

Mon, 07/30/2012 - 17:39 | Link to Comment i_call_you_my_base
i_call_you_my_base's picture

Will & Grace? How long have you been off the grid?

Tue, 07/31/2012 - 07:11 | Link to Comment rufusbird
rufusbird's picture

cut it out Wally...

Mon, 07/30/2012 - 16:36 | Link to Comment JimBowie1958
JimBowie1958's picture

LOL, yeah, so just shut down the government one day each month for the last three months - problem solved!

:P

Mon, 07/30/2012 - 17:33 | Link to Comment AGuy
AGuy's picture

"so just shut down the government one day each month for the last three months. problem solved!"

More like: "Just keep the gov't open one day each month, forever. Problem Solved!"

Mon, 07/30/2012 - 16:19 | Link to Comment cougar_w
cougar_w's picture

In about 12 months. Maybe nine.

You got that long to get your shit together. After this time next year there won't be any getting together any more shit.

Mon, 07/30/2012 - 16:37 | Link to Comment mademesmile
mademesmile's picture

You sound like my husband, who wants to add to our small arms pile. I want to add to my jewlery collection. Who knows, maybe we can do both.

Mon, 07/30/2012 - 16:42 | Link to Comment HungrySeagull
HungrySeagull's picture

A diamond encrusted shotgun stock would be a good compromise.

Mon, 07/30/2012 - 16:47 | Link to Comment cougar_w
cougar_w's picture

Silver bullets come in handy when confronted with the undead.

Mon, 07/30/2012 - 17:19 | Link to Comment mademesmile
mademesmile's picture

Haha, the glint would be enought to blind someone. If I get talked onto getting a concealed carry, my weapon of choice will be a thing to behold.

Mon, 07/30/2012 - 22:19 | Link to Comment The Gooch
The Gooch's picture

cougar_w. The eternal optimist.

Mon, 07/30/2012 - 16:38 | Link to Comment JLee2027
JLee2027's picture

There's no way to predict when. Could be this week. Or in years.

Mon, 07/30/2012 - 16:44 | Link to Comment cougar_w
cougar_w's picture

You are mostly correct.

However, not this week they have enough ammo to handle this week and next. And most likely, not many years because they are seriously running out of ammo.

It's not a crap shoot; they are running out of runway. That's a very different kind of call.

Mon, 07/30/2012 - 17:16 | Link to Comment Ookspay
Ookspay's picture

During the US War of Independence General George Washington allowed his troops to pillage the poulation to keep the army supplied. They did however, give worthless IOU's to the hapless citizens. Revolution part deux will be very similar.

Mon, 07/30/2012 - 17:37 | Link to Comment earleflorida
earleflorida's picture

0.001% = Loyalist

Mon, 07/30/2012 - 21:57 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

cougar_w said:

In about 12 months. Maybe nine.

You got that long to get your shit together. After this time next year there won't be any getting together any more shit.

Black Cat Moan - BBA Live

"Get my shit together..."

http://www.youtube.com/watch?v=fFHIaCgzCuY

Mon, 07/30/2012 - 16:20 | Link to Comment TrustWho
TrustWho's picture

...War, rationing, and likely, martial law.

Mon, 07/30/2012 - 17:12 | Link to Comment RichardENixon
RichardENixon's picture

Will that pre-empt the 3 hour WWE Monday Night Raw broadcast tonight? Sure hope not, I heard they're bringing Gorgeous George back.

Mon, 07/30/2012 - 17:21 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

DHS gears up for civil unrest prior to presidential elections

http://rt.com/usa/news/dhs-unrest-gear-283/

Tue, 07/31/2012 - 04:49 | Link to Comment 10mm
10mm's picture

Ahhh,thee youngsters will again be getting dragged away by those turtle looking people.I really wish they save all that youthful energy for when it counts.stay home election day,or as "Carlin " would do,jack off.

Mon, 07/30/2012 - 16:33 | Link to Comment DosZap
DosZap's picture

When will this shit ever end? 

When the goal is accomplished that it was intended to produce from Day 1.

Mon, 07/30/2012 - 16:38 | Link to Comment HD
HD's picture

"When will this shit ever end?"

 

 If I went long - the market would implode in mere seconds. As long as I'm losing my shirt the world economy will be safe.

YOU'RE WELCOME.

Mon, 07/30/2012 - 17:22 | Link to Comment humblepie
humblepie's picture

HD, you should go long, and the rest of us at ZH will go short. We'll cut you in on our earnings on the market implosion. Deal?

Mon, 07/30/2012 - 17:35 | Link to Comment HD
HD's picture

I would, but there is some Italian guy here who says he will "do whatever it takes" not to let that happen. He assures me, "it will be enough"...

Mon, 07/30/2012 - 20:21 | Link to Comment Arius
Arius's picture

did he look at you straight in the eye?  that is the TGL test...

Mon, 07/30/2012 - 17:31 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Or you could stop playing in someone else's game.

Go buy farmland and learn to farm.  Nothing else is real.  Nothing.

Tue, 07/31/2012 - 05:43 | Link to Comment goldenbuddha454
goldenbuddha454's picture

The national debt is TRILLIONS, not Billions as the author of this article notes in the graph.  What's a trillion here and there though?

Mon, 07/30/2012 - 16:12 | Link to Comment HungrySeagull
HungrySeagull's picture

At some point we might have to sell the Louisana Purchase back to get some money for the interest.

Mon, 07/30/2012 - 16:16 | Link to Comment cougar_w
cougar_w's picture

The French are flat broke. Maybe the German's would buy it? No forget that, sell it to the Chinese. They can build malls all along the Mississippi waterfront.

Mon, 07/30/2012 - 17:13 | Link to Comment Turin Turambar
Turin Turambar's picture

If the Chinese bought LA, they'd be pumping oil left and right and pay us back with what used to be our own oil, and they'd probably get it done in less than 5 years.  :-O

Mon, 07/30/2012 - 16:14 | Link to Comment TideFighter
TideFighter's picture

I blame Turbo Tax.

Mon, 07/30/2012 - 16:18 | Link to Comment Comay Mierda
Comay Mierda's picture

gubmint cheeeeez

Mon, 07/30/2012 - 16:14 | Link to Comment cougar_w
cougar_w's picture

I don't understand the problem here. Can't they just print whatever they need?   /s

Mon, 07/30/2012 - 17:21 | Link to Comment chet
chet's picture

From a practical standpoint yes.  The debt ceiling is a political crisis that Congress likes to regularly spring on itself. 

The overall debt is more of a frog-in-slowly-warming-water type of crisis.

Tue, 07/31/2012 - 00:13 | Link to Comment Assetman
Assetman's picture

That's what Geithner is asking at this very moment, cougar.

Win the Future!

Mon, 07/30/2012 - 16:14 | Link to Comment Haddock
Haddock's picture

"The increase is primarily due to lower receipts, higher outlays"

Pardon my ignorance, but what else in seven hells of blue blazes could be the reason?

Mon, 07/30/2012 - 16:33 | Link to Comment lemonobrien
lemonobrien's picture

unexpected outlays.

Mon, 07/30/2012 - 16:37 | Link to Comment SilverIsKing
SilverIsKing's picture

Could be:


higher receipts and much much much higher outlays...

OR

much much much lower receipts and lower outlays

OR

higher receipts and lower outlays but there was an accounting error

OR

we got some receipts and we cashed some checks but who the heck knows

OR

do you really want me to continue?

Tue, 07/31/2012 - 02:03 | Link to Comment DeadFred
DeadFred's picture

Luckily we have economists schooled in the best of institutions to illuminate the cause of the problem.

Mon, 07/30/2012 - 16:14 | Link to Comment Poetic injustice
Poetic injustice's picture

Phew, this makes me feel all better. More agencies to control debt are needed, at least 99% of GDP should be spent on agencies if not 150%.

Mon, 07/30/2012 - 16:16 | Link to Comment williambanzai7
williambanzai7's picture

DEBT BROTHER BALLOON MAN

Mon, 07/30/2012 - 16:18 | Link to Comment TideFighter
TideFighter's picture

I love debt brother. He steals anything he wants without hands.

Mon, 07/30/2012 - 16:45 | Link to Comment cougar_w
cougar_w's picture

But notice, he is really vulnerable to deflation.

Mon, 07/30/2012 - 17:36 | Link to Comment AGuy
AGuy's picture

And is filled with hot-air!

 

Mon, 07/30/2012 - 19:22 | Link to Comment Tippoo Sultan
Tippoo Sultan's picture

Come on, people. Who would junk a brother who looks like the frontman for The Ohio Players ?

http://unique74mag.files.wordpress.com/2011/07/ohio-players.jpg

Mon, 07/30/2012 - 21:46 | Link to Comment Anusocracy
Anusocracy's picture

I don't think he's a brother.

Looks like he's missing some junk down there.

Mon, 07/30/2012 - 21:53 | Link to Comment Lednbrass
Lednbrass's picture

Hmm, I was thinking more P-Funk circa late 70's myself. After Clinton and George Dubya, a George Clintonesque figurehead is somehow appropriate.

 

Mon, 07/30/2012 - 16:26 | Link to Comment FlyoverCountryS...
FlyoverCountrySchmuck's picture

HOPEY-CHANGEY, SUCKAZ!!!

Mon, 07/30/2012 - 22:21 | Link to Comment The Gooch
The Gooch's picture

Solyndra powered compressors!

oh. wait.

Mon, 07/30/2012 - 16:16 | Link to Comment Jlmadyson
Jlmadyson's picture

Elections plus debt ceiling bust equals perfect timing!

Just like every ZHer with a head has said for just about a year now.

Let the games begin!

Mon, 07/30/2012 - 16:17 | Link to Comment cougar_w
cougar_w's picture

Timmah had to break the news now, so they can pull a rabbit out of the hat in time for November elections. Waiting too long would have given the Repubs a new toy to play with.

Mon, 07/30/2012 - 18:18 | Link to Comment NotApplicable
NotApplicable's picture

Nah, the debt ceiling "issue" is no longer a lefty-righty faux divide, but a real statist vs. non-statist one.

They'll just steal the money back from the pre-funded USPS healthcare account.

Mon, 07/30/2012 - 18:43 | Link to Comment cougar_w
cougar_w's picture

Very true, the lefty-righty thing is all for looks. But both parties will absolutely play it that way, to the hilt, 24x7, as November looms near. Watch, they'll all start sounding like Ron Paul and "audit the Fed" and "defend the current sea" and "real wages for real work" but it won't count for shit the day after the winner is named. Whoever the fuck that is. Whoever the fuck really cares.

Mon, 07/30/2012 - 16:15 | Link to Comment adr
adr's picture

If Romney had a brain instead of a Manchurian computer chip programmed by bankers, he would just run ads of Krugman, Obama, and every other Keynesian talking head saying more debt is the answer for slow growth. Then show how for every $1 of growth the federal government spent $3.

You then end with, "If you spent $3 for every $1 you made, how long would you last?"

Of course Romney needs to pay the masters as much as Obama does.

Mon, 07/30/2012 - 16:21 | Link to Comment Vincent Vega
Vincent Vega's picture

Of course you are correct. However, the problem is that few of the sheeple understand the math or care.

Mon, 07/30/2012 - 16:29 | Link to Comment Clueless Economist
Clueless Economist's picture

Oh I care very much, in fact....wait isn't a Khardashian going to be on Dancing with American Idols tonight?  Must Watch TV

Mon, 07/30/2012 - 16:41 | Link to Comment DosZap
DosZap's picture

Clueless Economist

Mispelled Khardashian, it Khardoucheian.

Mon, 07/30/2012 - 16:31 | Link to Comment Meesohaawnee
Meesohaawnee's picture

yea romney has some low hangin fruit to pick but he doesnt seem too bright in my world. Thats why i say no QE. he could just call the fed is influencing. Im so sick of this qe or no qe garbage.

Mon, 07/30/2012 - 16:38 | Link to Comment DosZap
DosZap's picture

None of us had a clue that a member of the Muslim Brotherhood would ever atain such power,and destroy the Western worlds economies.

An economic Jihad.

Mon, 07/30/2012 - 20:30 | Link to Comment DogRockets
DogRockets's picture

Romney hasn't won the election yet so there is still time.

Mon, 07/30/2012 - 16:16 | Link to Comment Cranios
Cranios's picture

It is just too damn bad that the debt ceiling breach couldn't happen in late October, about a week or two before the election. What a sideshow that would be.

Mon, 07/30/2012 - 16:16 | Link to Comment Haager
Haager's picture

Sustainable... I must be exactly as stupid as I always thought I am. Damn, I had hoped they would start exhaustingly to print...

Mon, 07/30/2012 - 16:16 | Link to Comment Josh Randall
Josh Randall's picture

We've got something for you Geithner....it's an "anti-Banana disguise"

Mon, 07/30/2012 - 16:17 | Link to Comment moskov
moskov's picture

Can a 911 attack on the US treasury building would result Fed to collapse?

 

I am sick of this long and stinking bullshit.

Mon, 07/30/2012 - 16:26 | Link to Comment HungrySeagull
HungrySeagull's picture

Nah.

Remember the Fed is divided into 7 zones and each have at least one reserve city plus any number of hot backups.

Mon, 07/30/2012 - 16:18 | Link to Comment lizzy36
lizzy36's picture

Geithner can't leave fast enough. 

Mon, 07/30/2012 - 16:28 | Link to Comment CrimsonAvenger
CrimsonAvenger's picture

Right, like his replacement will be scads better.

Besides, I still have lots of Eraserhead jokes I haven't used yet.

Mon, 07/30/2012 - 18:23 | Link to Comment NotApplicable
NotApplicable's picture

I'm sure you'll get plenty of chance to use them in whatever bomb-triggering job he gets next.

Maybe him and Hillary will run the IMF.

Mon, 07/30/2012 - 17:09 | Link to Comment LMAOLORI
LMAOLORI's picture

 

Does Mitt Romney Have a Secret Economic Plan?

http://www.bloomberg.com/news/2012-07-27/does-mitt-romney-have-a-secret-economic-plan-.html

Same for bernanke at least Romney would get rid of those two douche bags

Mon, 07/30/2012 - 17:38 | Link to Comment New_Meat
New_Meat's picture

Yep, boomberg has all of the inside skinny. - Ned

Mon, 07/30/2012 - 16:19 | Link to Comment Peter Pan
Peter Pan's picture

Why do they persist in calling it a debt ceiling when in fact they are digging a bigger and bigger hole?

Mon, 07/30/2012 - 16:36 | Link to Comment Vince Clortho
Vince Clortho's picture

The ceiling looks higher as you dig down deeper.

Mon, 07/30/2012 - 19:06 | Link to Comment soccerballtux
soccerballtux's picture

raising the roof what what???!!! :D :D :D

Mon, 07/30/2012 - 16:58 | Link to Comment ghengis86
ghengis86's picture

Debt Target is more accurate. Good news, we're right on target! USA! USA! USA!

Mon, 07/30/2012 - 16:25 | Link to Comment Jlmadyson
Jlmadyson's picture

Lower receipts=less folks employed!

Hmmm. Hmmm.

This falll is going to be superfragilisticexpialidocious!

Mon, 07/30/2012 - 16:28 | Link to Comment Peter Pan
Peter Pan's picture

You forgot "cala" after "super" or is that a bit of austerity creeping in? LOL.

But you are right, they don't seem to make the connection between employment and the budget. Employment only seems to matter when elections approach and even then it is just talk.

Mon, 07/30/2012 - 16:22 | Link to Comment LouisDega
LouisDega's picture

Wow, Thats a lot of money.

Mon, 07/30/2012 - 16:33 | Link to Comment Jlmadyson
Jlmadyson's picture

The Krugs would say nowhere near enough money!

Mon, 07/30/2012 - 17:03 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Who wants money?!

- The POTUS, Barrack Obama, June 2012

Mon, 07/30/2012 - 16:26 | Link to Comment Atlantis Consigliore
Atlantis Consigliore's picture

Capital Strike; capital on strike...

25 Million small business owners revolt;//

Send a message....shut down, in october as a surprise...

1099 everybody.....

that 'll crater it; and stop it ....

"WE DID DAT.....NOT YOU, WE DID DAT...."

 

Mon, 07/30/2012 - 17:37 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

That guy who mowed down all those people in the theater . . . he didn't do that.  Government did that.  Govt made the roads he drove on to get to the theater.  Gov't helped that theater get built.

Govt does everything.  It's amazing.

Mon, 07/30/2012 - 16:27 | Link to Comment lemonobrien
lemonobrien's picture

I need more power Scotie!

 

We're doing warp 9 captain, I'm giving her all she's got.

If we go any faster she'll break up captain.

 

more power Scotie we need more power.

Mon, 07/30/2012 - 16:27 | Link to Comment HungrySeagull
HungrySeagull's picture

Scottie rigs a stun gun/taser out of the guts of his engineering console and nukes Captian Kirk.

 

There is your goddamn power you son of a bitch!

Mon, 07/30/2012 - 16:32 | Link to Comment Winston Churchill
Winston Churchill's picture

Sassenach son of a bitch.

Fixed.

Mon, 07/30/2012 - 16:31 | Link to Comment JustObserving
JustObserving's picture

Unfunded liabilities hit $120 trillion on Wednesday. Richard Fisher of the Dallas Fed used to highlight this number before 2008.  Now there is a conspiracy of silence about this number.  

Mon, 07/30/2012 - 16:49 | Link to Comment blunderdog
blunderdog's picture

They're not "liabilities" like REAL liabilities.  The gummit can always just decide not to pay, and there's no way to try to make them. 

Given that the spending problem is all non-discretionary anyway, nothing's going to change with regards to the deficit until someone gets serious about cutting SS, Medicare, and/or military spending.

Mon, 07/30/2012 - 16:32 | Link to Comment reader2010
reader2010's picture

It will definitely make some folks richer.

Mon, 07/30/2012 - 16:32 | Link to Comment PapSmear
PapSmear's picture

Welcome to the recovery.

 

 


Mon, 07/30/2012 - 16:34 | Link to Comment Vince Clortho
Vince Clortho's picture

Well, Golly!

More Debt.  Who woulda thunk?

Mon, 07/30/2012 - 16:36 | Link to Comment Bay of Pigs
Bay of Pigs's picture

+1 Tylers,

Please keep hammering away at these assclowns like Matt Zames and the other Bankster criminals.

ZH Full Court Press...

Mon, 07/30/2012 - 16:35 | Link to Comment Arnold Ziffel
Arnold Ziffel's picture

Argentina inflation running approx 35% now and currency controls are in place to block people investors move out of the rapidly devaluing peso:

 

From Daniel Politi:

BUENOS AIRES — Earlier this month, Argentina’s Central Bank officially banned the purchase of U.S. dollars for savings, making official what had already been a de facto government policy following months of tightening controls on the foreign-exchange market as a way of protecting foreign reserves. Now only those traveling abroad are allowed to buy foreign currency provided they get permission from the government tax agency first.

Mon, 07/30/2012 - 17:16 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Currency control's will be here soon step by step this will likely be step one

 

What If There Was No Cash?

 

http://seekingalpha.com/article/760001-what-if-there-was-no-cash

 

Related

Fed Weighs Cutting Interest On Banks’ Reserves After ECB Move

http://www.bloomberg.com/news/2012-07-30/fed-weighs-cutting-interest-on-banks-reserves-after-ecb-move.html

 

And what's Geithner doing in Germany? 

http://www.economicpolicyjournal.com/2012/07/why-is-geithner-in-germany.html

Mon, 07/30/2012 - 16:36 | Link to Comment azzhatter
azzhatter's picture

I'm sure it's transitory

Mon, 07/30/2012 - 16:41 | Link to Comment TideFighter
TideFighter's picture

The penalty for such misjudgment should be the death penaly- The Code of Hammurabi.

Mon, 07/30/2012 - 16:44 | Link to Comment Vince Clortho
Vince Clortho's picture

Not to mention the death penalty in Europe for hundreds of years.

I think that was before the Enlightenment.

Mon, 07/30/2012 - 16:43 | Link to Comment loveyajimbo
loveyajimbo's picture

QE has been delayed in order to print massive cash to finance our unpayable debt... are those printing presses warranteed?  What?  made in China?  shit.  I'm buying Drachmas.

Mon, 07/30/2012 - 16:43 | Link to Comment distopiandreamboy
distopiandreamboy's picture

Yes but how does this impact QE3?

Mon, 07/30/2012 - 16:46 | Link to Comment Piranhanoia
Piranhanoia's picture

Cheney, Rummy and Bush #2 have to be laughing so hard they are playing their colostomy bags like bagpipes.  The last presidency before the collapse and they knew it when they worked for Bush the Spy.

Mon, 07/30/2012 - 16:52 | Link to Comment Haager
Haager's picture

We get drowned in this shit, man, and it keeps coming.

Mon, 07/30/2012 - 16:54 | Link to Comment TWSceptic
TWSceptic's picture

Who cares just spend more! The world is going bankrup anyway.

Mon, 07/30/2012 - 17:21 | Link to Comment LouisDega
LouisDega's picture

I just did. I bought the new Mac book pro with Retina display. Expensive fucker...

 

Mon, 07/30/2012 - 16:55 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Alex Jones, a journalist who claims Peak Oil Thoery is hogwash because the oilgarchs advertise peak oil prominantly, should be aware not only is this not the case, but deducing "If A then not B" is fallacious logic.  Here is a great example of an oil chief saying oil production will never drop:

 Much of a recent report by George Monbiot was spent regurgetating an article from Leanardo Maugeri, a former executive of the oil corporation Eni.  Monbiot breathlessly reported this “provides compelling evidence that a new oil boom has begun”.

And with that, just as many other oil Exes, not to mention all economists, believe oil will never peak production (or rather the EROEI of oil) so there is no need to ready ourselves for a future with less of it around.

Monbiot's Peak Oil U-Turn:

http://www.davidstrahan.com/blog/?p=1576

Mon, 07/30/2012 - 16:55 | Link to Comment f16hoser
f16hoser's picture

CMON Turbo Tax Tim. Get with the program. You're the US Government! 600 Billion is a rounding error you TWIT.....

Mon, 07/30/2012 - 17:10 | Link to Comment MrBoompi
MrBoompi's picture

Soon the wealthy will own every acre, every house and business, every ounce of precious metals, and everything under the sun.  THEN AND ONLY THEN will they announce the dollar is worthless.

 

 

Mon, 07/30/2012 - 19:14 | Link to Comment Bastiat
Bastiat's picture

Right, after the acquire all these real things with the minimum amount of worthless dollars.

Mon, 07/30/2012 - 17:13 | Link to Comment TideFighter
TideFighter's picture

Bernanke would endlessly print right now if it weren't for the elections. He doesn't want to appear helping O'fishizzle get re-elected. Not that I agree, but this administration will pump any amount necessary to get homeowners out from underwater, where they can immediately refi student debt, credit cards, car loans, all at 2-3%. To be caught without hard assets, chiefly a house, will quickly separate locked-in debtors versus no-debt and reloadable spenders. My banking contacts tell me this is the reason they are dribbling out the shadow inventory as slow as possible - they want to be holding property when the ramping starts.

Housing is being taken off the market at rapid pace, something is up. Builder new house inventory (sans the very misleading multi-family stats) is at a 50 year low.

http://ml-explode.com/2012/04/bernanke-successfully-re-inflating-housing...

In my county this year:

January - July 2011: 1371 foreclosed; 354 bid and won by Plaintiff @ balance (bank); 25.8% cover

January - July 2012: 1703 foreclosed; 1433 bid and won by Plaintiff @ balance (bank); 84.1% cover

Bid to cover has increased almost 60% since last year. Outside bidder numbers reduced from 96 to 14.

I gather from this: Banks are still adding to shadow inventory, in fact increasing almost 60%. Of course, this may not be true in every county, but why else would banks bid-to-cover when sales are still sinking? Mark-to-market aside, this presents incredible risk for the banks, especially the regionals. I went short Regions, BancorpSouth, and SunTrust. I was also chasing some houses that foreclosed and now are bank owned. They aren't listing their inventory - they don't want anybody counting houses they have on market. If you can get a deal, this time may represent an outstanding time to buy a house, get good financing, and wait for the bubble (again).

Mon, 07/30/2012 - 17:26 | Link to Comment blunderdog
blunderdog's picture

Won't be much of a housing market if there are only sellers.

50% of the population hasn't got a pot to piss in--with no income, buying a house isn't a high priority, not that they'd qualify for a mortgage anyway.  How many houses can any one family use?

I'm sure there's never been a better time to buy...

Mon, 07/30/2012 - 18:02 | Link to Comment HungrySeagull
HungrySeagull's picture

Regions is a hard one. If they could get into the Funeral Home Business to process your body, they will do so.

There are thousands of students in college now with barely any property to speak of. And they are encumbered with debt to the point of not being approved for anything.

Therefore the prices MUST fall.

We won't refinance, simply sell and go somewhere else. But not just yet and probably never.

Mon, 07/30/2012 - 18:56 | Link to Comment Bohm Squad
Bohm Squad's picture

The key word you used was "a"...buy "a" house.  A lot of people forget houses (save those profitably used as rentals) are liabilities, not assets.  Buying a house in the hopes the housing market turns and a greater fool will buy it is a mistake, in my opinion.

If it makes money, it's an asset...if it takes money, it's a liability.  <---Something every school should teach...but of course, they won't.

To each their own, though.

Mon, 07/30/2012 - 21:19 | Link to Comment WillyGroper
WillyGroper's picture

>>>>>I went short Regions, BancorpSouth, and SunTrust.

Diebold dropped 9% today blaming the regionals for a decline in ATM's. Good luck with ur shorts.

Mon, 07/30/2012 - 17:22 | Link to Comment Dr. No
Dr. No's picture

Its planned.  Obama's tactitians are looking to force a debate.  They feel the debate can be won for some reason.

Mon, 07/30/2012 - 17:58 | Link to Comment blunderdog
blunderdog's picture

What's up for debate?  Congress is the only branch that can change non-discretionary spending, and it's pretty clear they're not about to do anything.

The Presidency is just going to be a hot-potato until global conflagration. 

Whichever party is in the WH is going to be clobbered for spending by the party that's not.

It'd be funnier if any good could come of it.

Fed budget: about $3.7T

Discretionary spending: about $1.4T

Budget deficit: about $1.6T

Notice what's going on there?

Mon, 07/30/2012 - 17:29 | Link to Comment Broomer
Broomer's picture

"US Treasury issue on average $3.3 billion in debt every day"

That's about 4K every year for each person in America (I'm assuming a population of 300,000,000).

 

Mon, 07/30/2012 - 17:32 | Link to Comment Dburn
Dburn's picture

Apples Cash and Income. Look over a basic Income statement and you'll see a the so called after tax income. Go to the cash flow statement and you'll see this nifty column called Adjustments To Net Income. This is where cash is adjusted upwards and presumably where the bullshit on the taxes paid starts.

Example. In 2011 they showed a "provison" for income taxes at 8.2B
Then in adjustments to net Income we see a + 4.0B .

All is cool as far as Apple being perceived as a good corporate citizen with a tax rate of around 24% .

The reality is that it's 12% which is why their cash flow statement is the key to finding out true earnings.

in fiscal 2011 the net earnings where 25B. Instead it should have been 29B. That's nice to know until one looks at the Balance sheet and find that the cash present in the US + Receivables is less than Payables+Current portion of long term liabilities . Someone calculated that there was 75b Sequestered offshore to escape US Taxes. Add to that the 11B in earnings adjustments they have hidden off shore and they have 86B in cash in off  shore accounts. Obviously they have a tremendous borrowing capacity at super low rates that would make sense if cash flow fell off somewhat. Their biggest problem with this cash horde is the absolute refusal to pay US taxes on it which limits it's effectiveness especially in a ZIRP environment. Hell if this was back in the good old days of 6%-7% yeilds on REAL triple AAA rates investments , they would be earning 7-8b a year just on their cash holdings. Alas they have decided to offshore the cash as most other Cash Have Corporations which tend to limit receipts. The offshore 86B may have a 25B liability bomb in their that no one can see.

Beware of Corporations who use top brands ("beloved" as some Apple analysts call it)  as a sledge hammer to beat their suppliers, employees, customers and shareholders with to the benefit of only top management. Example A is MSFT stock performance since 2000 who practiced Brand beatings regularly in the 90s as shareholders suffered mightily for it if it's stock was purchased around it's 2000 High.

Mon, 07/30/2012 - 17:39 | Link to Comment GlomarHabu
GlomarHabu's picture

 

...... then the flight attendant said, "Place it over your nose and mouth and breathe normally"

to which I responded, "I'll take some of that, come over here and place that thing you have over my nose and mouth" ..

The Treasury is using the same technique except they're using chloroform, hoping we won't notice.

 

Mon, 07/30/2012 - 18:26 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

Unfortunately, it looks like they'll squeek past November elections without it being an issue.  December is perfect timing if you're a politician - they do another debt ceiling hike at 11:30pm on Christmas Eve by unanimous consent, home in time for cookies and egg nog.  Even if the debt ceiling hit today, they'd still be able to steal, er "borrow", from all the usual places to get past November.

Mon, 07/30/2012 - 19:16 | Link to Comment monopoly
monopoly's picture

We talk about these numbers as if it was just passing conversation. But few seem to care so far. And not one in Congress advises pay cuts, benefit cuts, medical changes. Not one. A bunch of useless selfish morons.

Mon, 07/30/2012 - 19:22 | Link to Comment John Doeman
John Doeman's picture

And I never hear the annual debt service on this mamouth moutain of IOUs. It is nearly $600 billion, correct?

Economic treason. No other way to say. People need to hang or the American Republic will perish.

Save your cute fucking snarky comments. Shit is serious now.

Mon, 07/30/2012 - 22:01 | Link to Comment Lednbrass
Lednbrass's picture

$454 billion last FY, $375 so far this one with 3 months to go.

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

Shit has been serious for some time, nothing wrong with a bit of gallows humor among the condemned/damned.

Mon, 07/30/2012 - 20:08 | Link to Comment web bot
web bot's picture

How does the Fed get $600,000,000,000.00 wrong? I can understand folks at the local trailer park getting zeros and periods a bit mixed up when counting beer bottles.... but the Fed???

This is a complete sham. The Fed has legions of bright people who have studied economic history and they know that they are entering the end game. History repeats itself, they just can't say so because the system would collapse.

For a very succinct understanding of whats going on, read Ray Dalio

’s paper Why Countries Succeed and Fail Economically (June 2011). You'll need to go into the Bridgewater website and look up research that is free to the general public. Its all there in black and white (and Dalio is a financial Einstein). http://www.bwater.com/home/research--press/how-the-economic-machine-work...

They know it's game over... they're just doing what they can to prevent the system from crashing down. And yes - we are royally #ucked.

 

Mon, 07/30/2012 - 20:53 | Link to Comment Weyland_Yutani
Weyland_Yutani's picture

"This is a complete sham. The Fed has legions of bright people who have studied economic history..."

 

The FED has legions of assholes.

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