Treasury Cash Drops By $15 Billion Overnight, At $51.6 Billion; $5 Billion In SGP Bills Roll Off

Two weeks ago Zero Hedge first presented the comparison of the Treasury cash balance to cash equivalents held by global public companies (a meme that has since propagated in a very dumbed down and unattributed fashion). Here is the update. As of last night, the US Treasury had just $51.3 billion in Federal Resere cash, and furthermore, Tim Geithner let the $5 billion in residual CMBs under the Fed's Supplementary Financing Program mature without rolling. In other words, the Treasury just burned $15 billion, or $20 billion when accounting for the CMB roll off, overnight. At this burn rate there is precisely 3 days or so of cash, although this naturally does not include the bulk payment due to SSTN discussed previously. It is now officially time to panic, although those who so wish, can put their money in not just Apple ($76.2 billion), but GE ($136.4 billion) and Microsoft ($62.4 billion) all of which have more cash than Tim Geithner. Of course, as Gartman put it, in three days everyone will have more cash than the US Treasury.

 

Massive Short Squeeze, Flight To Safety Pushes 10 Year Yield To 2011 Low 2.77%

The unprecedented moves in the yield curve continue: even as the blow out in (ultra) short term liquidity persists, notably in GC and in Bills maturing just after the August 2 D-Day, the scramble to cover long-dated shorts has collapsed the 10 and the 30 Year by an epic amount in the last few days, with the 10 Year trading at 2011 lows of 2011. Why is this number relevant? Because the last time we saw it was in August 2010, a few weeks before Ben Bernanke announced QE2. In other words, history is repeating itself verbatim from last year. As to whether the move is due more to a flight to safety or a short covering crunch we will know only next week when the CFTC releases its latest COT spec short data. One thing can be ascertained, however: the Fed models that look at rate-implied deflation indicators are currently screaming bloody QE. And it will come... As soon as the stock market finally realizes that it has to tumble before it surges to new and Weimerian highs.

 

Lights Out For The US Economy As Its Biggest Cheerleader Hangs Up The Towel

When Deutsche Bank's Joey perma-LaWronga finally gives up on his call that has been wrong for about 3 years now, it may be time to i) panic or ii) buy everything with three hands (thank you Fukushima). We are leaning to the former, especially after the upcoming downgrade forces the Fed to launch QE3 in about a month.

Complete Summary Of The Fed's Meeting With Primary Dealers By Way Of A Primary Dealer

Once again, straight out of Morgan Stanley's rate deks (or what's left of it after the whole TIPS implosion).

US Economic Data Disappoints IMMENSELY, QE3 Readies, Gold hits NEW All Time High

Author: goldnews | Filed under: Central Bank News, Economic News, Forex News, Precious Metals News This morning a few US data points were released and they all came in much worse than expected, leading to bets that QE3 is just around the corner.
In response, gold rose $16 to a fresh new high of $1,631/oz, beating out the previous all time high of $1,629. Read the rest of this entry »

The Real Problem Is Excessive Consumption and Debt

Eric De Groot at Eric De Groot - 2 hours ago

Don’t let the debt ceiling debt misdirect you from the structural concern of excessive debt within an unbalanced domestic and global economy. The US economy is driven by far too much consumption and centralized spending and little private investment and exportable production. The US economy is driven by the consumption monster that dines nearly exclusively on imported goods and various forms of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

White House Would Consider "Couple Of Days" Extension, Short-Term Deal

The latest headlines as they flash by:

• Carney Says Obama Would Consider ‘Couple of Days’ Extension
• Says short-term deal would give time to finish debate.
• Carney Says Treasury Could Give Update ‘This Weekend’ on Plans

It is unclear what a few day extension would achieve, aside from a rating adowngrade but it is enough to get the headline scanning robots ramping higher again.

Congress Resumes Debt Limit Discussion

The soap opera has resumed in Congress. Feels a little deja vu'ish? So it should. The expectation is that Congress will pass the "amended amended" Boehner Bill around 6 pm. The same as yesterday. Will it pass? Who knows. If not, expect overnight GC to surge on Monday, yields on Bills and CMB maturing after August 2 to surge, even as the 30 Year plunges to zero, making a mockery of UST curve "market efficiency." On the other hand, Obama will likely just end up invoking the 14th amendment, and then we will have a constitutional crisis to go along with all the other drama.

Guest Post: The Essential Rules Of Tyranny

As we look back on the horrors of the dictatorships and autocracies of the past, one particular question consistently arises; how was it possible for the common men of these eras to NOT notice what was happening around them? How could they have stood as statues unaware or uncaring as their cultures were overrun by fascism, communism, collectivism, and elitism? Of course, we have the advantage of hindsight, and are able to research and examine the misdeeds of the past at our leisure. Unfortunately, such hindsight does not necessarily shield us from the long cast shadow of tyranny in our own day. For that, the increasingly uncommon gift of foresight is required…The prevalence of apathy and ignorance sets the stage for the slow and highly deliberate process of centralization. Once dishonest governments accomplish an atmosphere of inaction and condition a sense of frailty within the citizenry, the sky is truly the limit. However, a murderous power-monger’s day is never quite done. In my recent article ‘The Essential Rules of Liberty’ we explored the fundamentally unassailable actions and mental preparations required to ensure the continuance of a free society. In this article, let’s examine the frequently wielded tools of tyrants in their invariably insane quests for total control…

Gold, Silver Unaffected by Debt Crisis
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch





Conscience of a Gold Investor
By: Jim Willie CB

Ron Paul: “Gold Price is Tell Tale Sign of What Will Happen to this Economy”

Author: goldnews | Filed under: Political News, Precious Metals News In a Fox News interview, Presidential hopeful and Chairman of the House Domestic Monetary Policy Committee, outlines his views on the impending debt ceiling crisis. Read the rest of this entry »

JP Morgan: ‘Gold to Hit $1,800/oz by Fourth Quarter’

Author: goldnews | Filed under: Precious Metals News In a letter to clients, JP Morgan analyst John Bridges made clear his bullish views for gold and gold mining equities. Bridges predicts gold prices will reach $1,800/oz by years end and that we are presently at a good entry point for buyers of the metal. Read the rest of this entry »

Economic Rape of Europe Nearly Complete, Part III

In Part I of this series, I reviewed the campaign of U.S. “economic terrorism” which has ravaged many of the economies of Europe – and set the stage for their economic destruction. In Part II, I identified three of the most important strategies which will be used to “finish the job”, and discussed one of them: either to steal the national gold reserves of these nations, or to hide the fact that those national hoards of gold were already squandered.

In this installment I will focus on the second strategy for completing the looting of Europe. It is a mere two-word phrase, and arguably the most-odious two-word combination in the realm of 21^st century economics: “loss guarantees”. It is the ultimate form of “welfare” for both the banker Oligarchs and the bond parasites, and the principles behind it are extremely simple:

1) Direct hand-outs are the visible part of any/all welfare for the “elites”. Indeed, that component of welfare-for-the-rich is essentially the only part of these schemes which is understood and thus noted by the general public – and so they must be kept to a minimum (the proverbial “tip of the iceberg”).

2) In order to steal the $10’s of trillions which these Vampires are currently in the process of plundering from us, it is necessary to lie about (and thus hide) most of what is being stolen.

It is in this respect that our political leaders are “earning” the campaign-bribes which these Oligarchs used to buy our governments. In fact “lying about things” and “hiding things” are arguably the only two “talents” possessed by the current crop of Western political “leaders”.

We got our first real exposure to “loss guarantees” after the Crash of ’08, and the multi-trillion dollar extortion campaign which Wall Street based upon that deliberately created “crash”. Naturally when the (banker-friendly) propaganda machine writes about the “costs” of all of the Wall Street welfare they only ever point to “the tip of the iceberg”: the direct hand-outs – totaling somewhere around a paltry $1 trillion. However, once the “0% interest loans” and “loss guarantees” are added in, suddenly the Wall Street hand-outs swell to roughly $15 trillion (and counting).

It is a testimony to the monumental stupidity and apathy of the average Western citizen (in this case Americans) when we see how easy it was to dupe the American people. Understand first of all that both the banksters and the politicians (at least those at the very top) have known all along that the Wall Street fraud-factories are all hopelessly insolvent – and hiding countless $trillions in losses.

It is common knowledge that Wall Street was leveraged by an (insane) average of more than 30:1 at the time that their Ponzi-schemes imploded. The arithmetic is simple: a loss of roughly 3% on the underlying assets which were leveraged would take the entire paper-empire of Wall Street to zero. Most of the Wall Street scam-products were based upon the U.S. housing sector. Prices for U.S. homes have now plummeted in excess of 30% - ten times what would be necessary to make all of Wall Street insolvent. Even worse, many of the “exotic” products (i.e. bets) devised by the Wall Street Vampires were so unstable and/or heavily leveraged that losses well in excess of 100% are possible.

In this respect, the example I like to use is when one bankster sued another – in this case, Citigroup suing Morgan Stanley to force Morgan Stanley to honour its losses on just one “credit default swap”. Even after liquidating the so-called collateral which “backed” this contract, Morgan Stanley was faced with not a mere “100% loss”, but rather a 300:1 loss (or 30,000%).

Upon examining these facts, we discover the cruel, horrifying truth about these “loss guarantees”: what they are really are guaranteed losses. Thus in typical deadbeat fashion, the U.S. government immediately committed itself to more than $10 trillion in Wall Street losses – while not actually “paying for” thoses losses…at least not right away. Read more: Economic Rape of Europe Nearly Complete, Part III

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