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Treasury Leaks Worst Case Contingency Plan: Creditors Get Priority In Case Of Technical Default
Things are getting real. After all the bluffing, huffing and puffing by Geithner, the rating agencies, and anything with a pulse and a TV or radio pulpit has failed, the last trump card is coming down. While yesterday the Treasury informed that it would not disclose any details of its contingency plan, Bloomberg has just learned via a Treasury leak that the US government will give priority to bondholders. From Bloomberg: "The U.S. Treasury will give priority to making interest payments to holders of government bonds when due if lawmakers fail to reach an agreement to raise the debt ceiling, according to an administration official. The official requested anonymity because no announcement has been made. The Treasury has said about $90b in debt matures on Aug. 4 and more than $30b in interest comes due Aug. 15. Overall, more than $500b matures in August." And so it begins: while the Treasury has not yet pushed the big red flashing button, this leak is nothing but it latest and greatest bluff. It also means that America will, indeed default, next week, as the absence of a contractual payment is a default. And then we get into the fine print with the rating agencies whether or not X is default but Y is not. At that point however it won't matter: every form of intermarket liquidity will be permanently gone as Lehman will be a cherished walk in the park. Thank you Tim Geithner and your total lack of contingency plans.
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If they can't raise the ceiling, there's no way they can pay both interest and principal on the $500b of debt maturing in August.
/printing press
//snickers
They can roll principal no problem, it doesn't count against the debt ceiling.
But they wouldn't be able to pay interest on the debt and fund current government operations on revenue collected.
Interest is #1 priority, leaving current operations (way) underfunded.
This will go one of two ways.
If it's not time to confiscate 401ks, IRAs, pensions, etc, the debt ceiling will be raised.
If it's time to confiscate 401ks, IRAs, pensions, etc, the debt ceiling will not be raised, they'll be confiscated by executive order ...and the public won't hear about it till it's a done deal.
Of course they are going to pay the bond holders..they donate to the campaigns.....Obama has already called the banks and said don´t worry....kind of nice insider news huh? they will make a list...two columns...with a big D and a R on top..for Democrat and Republican...things that help the Democrats...will get funded...things that lean Republican..will not....
Yes, but BUSH started the needless wars and approved of the prescription drug benefit, and paid the industrial miliatary complex off, and stopped policing Wall Street, and, and, and,........
BUSH should not be anyone's examplar.
Bush started the wars, like Libya? LIBYA DECLARES VICTORY OVER NATO? - YouTube Huh...somehow I dont think so!
You can attempt to avoid the facts (by adding additional ones like my 5 year old does in an argument) but without the Neo-conservatives thinking God was leading them to bring democracy to the world, thereby making themselves saints in the church, we would not be in this awful position. No matter what you say about Obama, true or untrue, it does not diminish Bush's clear culpability. In my opinion, along with 5 nations who have idicted him for war crimes, he should have hanged before Saddam. He is clearly a war criminal.
and what about all the Americans who profited from the cheap money?
what about people who lived the live thanks to morgaging twice their housevalue and pumping the stockmarkets?
Debt ceilings also went up during that day.
Nobody said anything about those.
Look, Obama wants to hold the social security checks from going out August 2nd and then go on TV and blame the Republicans for screwing granny.
Denizens of Florida nursing homes will start heading out into the streets, the AARP will start airing commericals blaming Congress, and, in the end, the House Republicans will be forced to cough up a blank check to Barry.
In the end, Obama will get what he wants and screw over the Republicans in the process.
Nah, Obama is trying to figure out how to divert attention from this massive faceplant fail- LIBYA DECLARES VICTORY OVER NATO? - YouTube
that's the playbook
Hey Wang, don't tell 'em you're Jewish!
http://www.youtube.com/watch?v=171FURqSIQc&playnext=1&list=PL0921DFE641A...
What about Nursing Homes that get peoples Social Security Checks and Medicare to take care of them? A lot of Nursing Homes could go Bankrupt in a Month.
Waterfall forgive me if you happen to be a resident at happy acres but the nursing home racket is unbelievably lucrative - a small fraction of a SS check actually goes to the caring/feeding/accomodation of the old and infirm - rather it goes (in many but not all cases) to supporting the opulent lifestyles of those fortunate enough to own them
The biggest downside would be for the suppliers of generic Jello and SPAM whose accounts receivable might be impacted
I was talking about the people in the Nursing Homes who sign over their Social Security Checks as part payment for their care. Same goes for Assisted living homes. They take the proceeds of your SS check.
+ new look+ w_f_s!
check out wang's, above you, with the changing "totals", also a +plus+
this cat who is your new avatar has a wonderful look to it. i find myself wondering if the cat is resigned to living with humans; or maybe is really pissed off about it.
was your granddaughter involved in this pholo, too?
if the goobermint doesn't send us our checks, i don't think it will help much, do you?
My new little kitty looking out from a towel I put down on the sofa to keep her off the fabric. Except she decided to get under the towel. Probably just to spite me. She is a little devil. But, a GREAT mouser.
How bad can things be with SBUX and GMCR raising guidance and posting blowout numbers?
Ask Uncle Molester.
RT why does everyone hate you?
Doomer libertarians hate everyone.
You are thinking of yourself, not libertarians. You hate everyone so much that you spend all day every day insulting them for literally no reason what-so-ever.
Tradition.
+1
didnt he used to be a contributor to site? what happened there?
I hear SBUX employees buy new cars like every two years. :roll:
Yes, THiessen was blowing away earnings reports in Germany in 1945! That's a good barometer for the economy as a whole
Really, who cares? We all know that any increase in the Debt Ceiling will be handed right over to the Banks and Wall Street.
It would be better to Default now instead of 2 Trillion later. The reason is because the higher the Debt the more of the US assets the Banks will be able to buy with the money we have provided them thru Tarp, QE Light, QE1, QE2, Pomo.
Ironically, we the American people have given the Banks and Wall Street all of the Money they need to buy all of the Assets of the US once they force us into Bankruptcy because of the Debt Created to Bail them Out.
Once interest rates go up America will not longer be able to pay even the interest on the Debt. Then, they will be salivating like they were in Greece to buy all of the Country's assets.
So, the Debt that has been created to Bail the Banks out by the American People will eventually Bankrupt America. The Banks will then use the Money from the Debt created to Bail them Out to buy America.
We will become serfs on our own land.
Your logic is flawed. A default will make the dollars given to the banks worthless. They will have all the property they foreclosed on to rebalance their sheets, but the banks will also take it in the ear. Property owners will survive, and that is any hard asset - land, gold, cars, silver, tools, cookware....
About the priority of paying bond holders first -
Wait a fucking minute! I thought the Muslem is chief was in favor of taxing the rich. What better way to tax them than borrow their money then stiff them on the bill.
What a hypocrit!
I am The Chief
Fannie and Freddie were added to the reverse repo counterparty list yesterday. Treasury is set up with a direct line to the money printer now. And because all of those loans are off balance sheet... All the bonds are cashable.
Someone please call this bluff.
The punchline is that many will feel relieved when the debt ceiling is raised and a default avoided.
Maybe that is the purpose of the drama. If they would have just raised the debt ceiling without all the drama people would not feel relieved, they would focus on all the new debt the citizenry will be on the hook for.
I giveth you a +1 for that insight.
hey guyz i'm 12 what does all dis mean???
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Wait a minute.. Aren't we buying most of our own debt? So the big threat is taking it from the left pocket and putting it into the right one?
define "we" and "our" - that may answer your question.
leaking this information was good for someone...
Six-month Treasury bills maturing Aug. 4 pared losses after the comments
source bloomberg
http://www.bloomberg.com/news/2011-07-28/u-s-contingency-plan-gives-bond...
A story as old as the hills: a government and an entire nation held hostage by a small group of overpriviledged power brokers who concentrated their wealth and power over time, somtimes generations. They always hire 'high-priests' or in our case preachy politicians who shovel the bullshit until it's ten feet high. And they tell you how they are "pure at heart" about their passion to change the rules in favor of their overlords.
One day Americans will realize it. But don't hold your breath. That day you won't want to venture out of doors
Gerald O'Driscoll on Faux Business right now talking himself into corners regarding solving the debt issue. Kept coming back to the same 2 conclusions.
1. Cook the books
2. Print more money
He kept trying to talk it out but the conversation with the news anchors always came back to "ONLY" these two remedies to solve the problem.
Oh, the look on his face ,,,,,LOL
Also on Faux news today suggestions of the Treasury selling Gold to the FED. Hu? Commentator also said by law they would have to sell it to the FED @ $45 per ounce.............................This whole can is gonna run outta road sooner or later !
WHAT A FUCKING RIOT.....................
WEZ BEEZ INZ BIGZ TROUBLEZ KIDZ !
This isn't strictly correct:
http://www.imf.org/external/np/exr/faq/goldfaqs.htm
The IMF maintains an internal book value of its gold that is far below market value. In 2000, this book value was SDR 35, or about US$47 per troy ounce.[8] An attempt to revalue the gold reserve to today's value has met resistance for different reasons. For example, Canada is against the idea of revaluing the reserve, as it may be a prelude to selling the gold on the open market and therefore depressing gold prices.[9]
Book value =/= sale value, never has done.
p.s. I think someone somewhere hit something that enforced bold for the entire page....
Let us cut to the chase here. It is all about jobs, GOVERNMENT JOBS.
The radicalization Obummer wanted may not be the radicalization he gets.
Anyone not preparing for the day when your money buys nothing is being very foolish. Time is running out. Food, water, heat, and a means to defend yourself are priorities.
Would someone please tell me which country on this planet has no debt? How about one that is paying down its debt?
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt
http://en.wikipedia.org/wiki/List_of_countries_by_external_debt
Your list has 128 members.
UN list of countries has 192.
There's some wiggle-room right there. Taiwan and the Vatican are not included either (and Kosovo, but hey - that's the CIA's back garden).
p.s. If you're not grasping the huge irony of Libya being bottom of your list, and having large gold holdings, and wanting to create a pan-African currency / trading agreement, based on a gold standard, you need your eyes testing. 3.3%, vast [$33 bil] investment in water resources and GS sucking out $1 bil when it made a profit every single day it traded?
Trolololololololol.
Administration taking a leak is the cover story. Who is really getting leaked on is the untold story.
If a person (not a corporation type person) that lived in America (not the one on that lives on an island universe all its own in no human land) said "we are sure going to be sure all the people get screwt first and let the dying begin" in public, They would have prepared an option to leave the country at a moments notice. It is comforting knowing they won't even get a moments notice.
When animals are lead to their slaughter, they are usually not aware of the problem until it is too late. Humans are no exception. I almost feel sorry for the folks who have had their heads stuck in their asses for all of this time while we, those of us who are aware, have been trying to warn them. I said almost...
a few days ago a poster here mentioned a "rumor" that millions of visas had been applied for by state workers in DC recently - I've not been able to find any information about this, but maybe someone else has? sure would be of interest. .
Any "default" by the US would be by choice. So if there is a default its only to create the conditions to create real astarity. Mostly within government its self.
There are to many departments and to many voices. Government has grown to large to handle. So just as GWB created the conditions to create the Department of "homeland" security. So will Obama create the conditions to consolidate the many into the few.
So goes my take. Default will be more of a fake default as far as all the important people keep getting their money and the non-important people get less or non.
That is unless Obama folds like a lawnchair and passes the republican bill.
So what will happen if a tree fell in the forest and no one heard it. Or if a default happened and everyone important got paid?
I'm not worried. I'll get mines on time. Full pension too. And if this escalates I might get a promotion to field supervisor on the new Interstate team.
We're setting up check points at all the truck weight stations and all vehicular traffic will be funneled through.
License, registration, and insurance. Open the trunk and show me your papers.
.
--You WILL Obey!
http://www.youtube.com/watch?v=dTOcAt44_QA
If the bondholders get priority, then by definition there is no default. Welfare payments are not guaranteed, while interest payments are.
All Obama and its Wrecking Krew want is for the US to default and go from AAA to AA+. Its what the Chinese, TBTF, the Rothchilds and Bill Gross all want. Its the slippery slope to get higher bond yields. That's it. The end of an American Credit System and Representative Democracy.
Then its all aboard for Jan 2012 defaults and the move from AA+ to AA. Also more reliance upon short term debt - can there be more?
USA will be treated no different than some third world banana despotism.
Wait until the 2012 elections are cancelled.
We're all Long for Year Zero.
And the irony is, of course, that if a 12 year old asks you what a pension is, there is little point in explaining - they are like the tiger, soon to be the preserve of zoos and fading documentaries voiced by Sir David Attenborough.
"Well son, when I was young, a pension was an agreement between management and labour to reward loyalty with a deferred payment when they were old and useless... then came a time, a dark time, a time when fat men in well tailored pinstripes fell off boats too much..."
http://www.youtube.com/watch?v=vJ1KZvzXpKI
[edit - this comment is possibly in the wrong thread]
This is a bullish news IMO. The Fed can think one move in advance. Maybe they are smarter then we think?
Audience involved theater. Wild West, Shakespeare. Boo, Hiss.
Get a grip folks. Don’t get trampled in the run for the exit created by the manipulators.
So, is any of this a shock?
I bet Social Security isn't considered a bondholder-even though they have Tbonds after Reagan, Bush, Clinton, Bush2 raided the savings trustfund(get it? Trust fund???)
I am assuming bondholders of interest are any foreign bank, Chinese bank or TBTF bank? And, in favor investors like PIMCO(if they even hold the crap anymore.)
Social security is not a bondholder, it is a welfare payment, per the US Supreme Court. Also, you need to go a bit further back in your list of those presidents raiding the fund - it started with LBJ.
One point: the debt that MATURES doesn't matter, because the treasury has said they will go ahead and issue bonds to cover that: because it's technically not going over the limit. So the $90 billion that matures in early August would be paid with newly borrowed money.
and here I thought I was crafty & devious.....ha!
This is nonsense. If we default we will honor our debt? What kind of fucking gibberish is this? If they can't roll the debt, WTF are they saying? They will just not pay it back but keep paying interest on it?
This is nonsense. If we default we will honor our debt? What kind of fucking gibberish is this? If they can't roll the debt, WTF are they saying? They will just not pay it back but keep paying interest on it?
Treasury interest rates near zero anyway. Would anyone even notice if the government stopped paying them?
Finally, it's a known fact that we're no more than one more overeducated, underemployed pathetic European state minus the social safety nets. That was one heck of a WW2 relief rally.
It's going to get bad, really bad in the very near future.
Remain Calm, All Is Well !!
Wait a fucking minute! I thought Obama wanted to tax the rich. What better way to tax them than borrow their money then stiff them on the bill.
What a fucking hypocrit! Here's some advice - don't believe a word this man says.
I am The Chief
Bondholders go to the front of the line?
Why does that not surprise me?
Bondholders = banks = (large) campaign contributions.
Hey, who would have thunk the TT Timmy can prioritize payments in case the debt ceiling is not raised ;)
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