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Two Hours After Fed Buys 30 Year Bonds, Treasury Sells 30 Year Bonds At Record Low Yield
Same time, same place, One day later. After yesterday the Treasury engaged in nearly contemporaneous monetization in the 10 Year bond courtesy of the Fed, first buying then selling the paper, at a record low yield of course, so minutes ago the Treasury just sold $13 billion in 30 year paper at another fresh record low yield of 2.72%, down from 3.06% in April. Ignore that the Bid To Cover plunged from 2.73 to 2.40, the lowest since November 2011, and that Indirects were barely interested, taking down just 32.5%, it was all about the Directs, whose 24% take down soared, and as in yesterday's case, was one of the Top 5 highest ever. China? or Pimco? We will find out soon. Dealers were left with the balance, or 43.5% the lowest since October 2011. Something tells us that once the Fed extends Twist, or engages in more outright LSAPs, we will be seeing much more of this same day turnaround service as little by little all interest-rate sensitive instruments slowly grind down to zero.
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Masturbation is fun but doesn't make babies.
It is having sex with someone you love.....
Who doesn't make unreasonable demands of you.
Is this that flow thingamajig everyone's talking about?
I thought we were going to get $3000 from big O for thingamajigs. Is that all they are? What a waste of money.
The Treasury is responsible for printing. Yet The Fed does QE. The Fed is a private entity central bank yet it has a dot gov url and the prez elects their board. The Fed derives it's revenues from "open market" operations and from the Treasury Portfolio. The Treasury's role is to "manage" the government's revenue. So a private yet public agency manages an agency that manages the government's revenues yet the private agency is accountable to no one and is the entity that engages in QE (ie PRINTING and ZIRP and TWIST) which directly influences more at subverts the "open markets" from which they derive their revenues. Can anyone say CONFLICT OF INTEREST more at ILLEGAL OPERATIONS?
I called the fed and asked them these questions, along with how they can justify distorting the "free market" and driving down interest rates such that they subvert the markets and no longer act as an economic gauge for lenders and borrows. I asked them how a private bank could buy 10Y and 30Y hours before they are to be sold. I was told to review their FAQ's. I responded that none of my questions are addressed in said FAQ's. And so I was promply hung up on. I guess a private entity that is gov elected and derives it's income from the taxpayer no less is not beholden to anyone but the banking sector and politicians.
Insanity. Plain and simple.
If you don't believe me here are some of the fed #'s: 202.973.7462 / 202.973/7462 ask their public affairs yourselves...
Vast-dom
I typed this a while back:
"...Every stabilization attempt taken by the Federal Reserve authorities is, despite their good intentions, stymied from the outset. They are stymied for the simple reason that the Reserve system is a "creature of Congress" that can set down the law. In any case, the central bank cannot let the credit of the over-indebted national administration go to pot, which is what would happen if the"printing press" would cease to support a prodigal Treasury. This is called Treasury-Federal Reserve-cooperating-in-managing- the-national debt. What is being managed is a progressive inflation , imposed by the Congress."
-Melchior Palyi 1961
Here is some more:
"Neither the Federal Resrve System and its organ, The Open Market Committee, nor the twelve reserve banks are banks in the common sense of the word. Profit is not their objective; most of the money they earn goes to Treasury...."
There is no conflict of interest. As a matter of fact, it has become their 'job' to support Treasury bond auctions. if they didn't, Congress would end run them.
they ALSO derive income from "the market"; that is, in addition to treasury derived income, which they then return back to the treasury. i don't make this shit up. i simply break it down logically.
more importantly, banks, central or otherwise, no longer engage in the business of banking.
it's the "congressional stillbirth antichrist" that manages to somehow still operate...thx to the sleeping grazing sheeple.
If the FED had balls, they would refuse to play and put the ball back in Congress' court. Then, there would be no more summits on the hill where they parade Bernanke in front of them as ask 'why are we still printing money'....
But, balls they ain't got
"Mr. Bernanke - why are we printing money?"
"Because you keep spending more than you make in taxes."
"But we can just sell Treasuries!"
"Not enough people are interested in them at the low rates we offer."
"Why not just offer higher rates?"
"Because six percent annual interest on the entire US debt would cost between a half and a third of all the taxes collected each year."
"And?"
"And then you, Congress, would have to either cut spending, or raise taxes."
"But we can't do that!"
"There is another option..."
"Thank God! What is it?"
"We can print money. Guess which option every congress before you has chosen.
I called the number and told them "That when they look out their windows and see torches and pitchforks it will be GAME OVER!... I don't think they appreciated my call very much because they hung up...
...
Expect a visit from your local anti-terrorist SWAT team in 10, 9, 8...
Keynesian's think if you take enough Viagra that masturbation will in fact, make babies.
Now that's a gross domestic product!
Fuggin' zero bound dun be cockblockin'
When this bubble bursts it is going to be magnitudes worse than the housing bubble.
I dreamed about it this morning. No ATMs, no food, no fuel.
Just pure panic. Oh, and the de facto legalization of theft.
With some killing, raping, and arson thrown in the mix.
I never understood the whole Ass To Mouth fetish.
So if interest rates are about to visit zero, i guess you are suggesting owning the Bond to capture the 270 basis point move to zero.
That's PIMCO and China's game.
You and I though, won't be so lucky as to know if it's all going to blowup before they make it to zero, or have a seat at the table after it does.
Just another approved tactic.
It will now be the norm.
And that means?? Monetization? Manipulation of yields? What?
No babies. No returns for millions of retirees. Cheap debt to fund more debt spending (money down a hole). Giving water and grain to the wheels of the cart and grease to the horse. Trying to force capital into equities of parastitc corporations. Trying to get something for nothing. Backdoor money printing which when it implodes will cause a whiplash effect; debasing the value of the currency and inducing inflation.
That´s called market economy.
I LOLed.
Why do we do it?
Cos we can!
Ben Bernanke Sentenced to 110 Years for Ponzi Scheme
Fed ‘Profits’ Would Have Blown Ponzi Away
http://www.zerohedge.com/contributed/fed-%E2%80%98profits%E2%80%99-would-have-blown-ponzi-away
Equities seem to be pulling off their June 4th lows and holding up pretty well. When the bears realize the Greek elections don't matter its going to get ugly
http://www.youtube.com/watch?v=Wsn5jeX6orc
get it thru your head, that there are no carbon based life forms in the markets!!!!
Maybe treasury wants to take the loss write-off on next years taxes ... Bahahahaha :(
We're screwed, glued and tattooed
the actual JOB of the FED being to insure systemic stability since 2300-page frank/dodd was passed less than 2 years ago, that is what the chairsatan has actually been up to, imo
his job!
this is part of it
yes, it is unconscionable can-kicking, but the goobermint is funded and the checks are in the mail and the dollar is above 82 for now and the EUR/USD is pushing against 126 but i think that's about all4toady, today. folks!
If we get any meaningful selloff in equities on Monday, then there will be even more money "fleeing" into Treasuries, and new auctions will be 400% oversuscribed at yet another world record low.
The Paper Bubble continues...........
Currency war, race to the bottom, outright wealth confiscation; call it what you will, it will end badly. Are you prepared?
More free money for the front-running Primary Dealers.
Thankfully every citizen can avail themselves of these risk-free profits, thus negating the need for rewritten mortgages, food stamps, unemployment benefits, disability benefits, and student loans.
So in Europe, the ECB is bailing out countries by lending new money with a first claim on assets. That leaves the original debt as something like a second mortgage on an underwater house - could be worthless or at lease significantly impaired.
Am I wrong, or are bondholders in Europe getting smacked (while is USA, England etc they are treated as vestal virgins)? And who are these bondholders in Europe? Pension funds?
I guess none of this really matters, since the middle class is getting raped regardless of what crazy schemes they come up with to extend and pretend.
Why China would want 30 year paper is beyond me, unless they are counting on flipping it to the fed later.
Ding! Ding! Ding!
Only reason I could think of for anybody to buy it right now.
Long canned goods, fruit trees, berry bushes, garden, beehives, silver and lots of copper, lead, and brass.
it's a family business after all.
...the Fed is ''evil'' Legion. This is not new or news to anyone paying attention to the PIIGS etc... Americans are, at best, distracted, that is clear enough, and that is because the Fed (etc...) is in possession of labor in the grave yard it sold to the world, having aborted the womb of labor, which now knows the graven image in line with the coming judgment, the ''drowning principle'' of the Fed.
...like a cat in a bag
http://www.youtube.com/watch?v=ZwI02OHtZTg&feature=BFa&list=AL94UKMTqg-9AyI6shx3-1DQ2N1m7zmKv8
...nobody is going to stop!
Here we go...
...down down
black hole...
the Bride is a Drag Queen
...what a Drag Queen
Fed is a selfish Twist
ZERO...
Mirror...
Give me some of that black hole
black hole
...bitch ezzzz
Hey!
...to the river ...yeah the riverrr
...uuuu of debt!
Wormwood!
Bitterrrr ness!
Come on ...let's get sold!
...cast another vote!
Nobody is gonna stop!
...were're done
Toast!
Bonded...
ain't nobody gonna STOP US!
LEGION!
(does the greatest rocking roll scream ever, as the band rocks to the end)