Tuesday, November 1, 2011

US Plans To Issue $846 Billion In Treasurys In The Next 6 Months, 35% More Than Previous Year

Since obviously nobody in charge has learned anything at all, and all the old school games will continue until they no longer can, and demand for US paper, already plunging at the international level, disappears (aside from the Fed of course: the Fed will always be a happy last ditch monetizer of one-ply US paper), here is the Treasury's just released schedule for bond issuance for Fiscal Q1 (Oct-Dec 2011), and Q2 (Jan-March 2012), which amounts to $305 billion and $541 billion, respectively, or a total of $846 billion in 6 months, a $141 billion run rate per month. This compares to a total of $628 billion issued over the comparable period a year ago (although granted the Treasury did burn a whopping $225 billion in cash in Q1 of 2010). In other words, the US Treasury is planning on issuing 35% more in the first half of the fiscal year than a year previously, even though this time last year the Fed was monetizing all gross issuance, and even though the European EFSF was not about to ramp up issuance and soak up hundreds of billions of excess fixed income targeted capital. Now we only have some vague, ineffectively sterilized duration transfer operation which is doing nothing to lift belly demand, and merely takes care of the long end (while the Fed's promise to keep rates at zero until 2013 makes all bonds 2 years and less to be off zero effective duration). We doubt this schedule is even remotely sustainable without some imminent form of Large Scale Asset Purchase program being implement (with or without MBS monetization: for a definitive answer on this issue, please call 

            949-720-6226      end_of_the_skype_highlighting), and none of that Nominal GDP targeting mumbo jumbo. Unlike Europe, the Fed knows that money talks, and bullshit targeting walks.


The Incurable European Mess

Dear Extended Family,

Gold is headed into the $2000s. The mess in Europe is incurable and can only be damage controlled by QE.
MF Global got busted because credit default swaps did not work. MF Global had their Greek and Euro bond position covered by credit default swaps that they thought would protect them. SURPRISE!
They did not work because the Greek situation of a 50% haircut was given another name than “default” by a select group of Banksters and related parties.
97% of all credit default swaps written are carried by the major US banks. That means 97% of all the credit default swaps are the US usual Bankster suspects that swore to be more conservative in their ways.
If the Greek referendum is determined to represent a Greek default, major US banks will return to public insolvency and be bailed out yet another time because of the fraudulent nature OTC derivatives.
You think that game was rigged? China is coming to the rescue of no one. China specializes in picking up the pieces from troubled areas, not being troubled by troubled areas.
After Europe comes the US as media has been successful in keeping the focus of the problems off the US dollar. The only problem with gold shares is the hedge fund wild men and women that will in the end fail to stop the super bull market that is sure to come.
What is good for gold (QE) is also good for general equities so be careful on those that see doom everywhere.
Playing any one currency today is hard. Better hold a spread and seek to maintain buying power only. Competitive forced devaluation is the tool of strong currencies making it hard for exports in that currency. This is another example of making the Western world economic problems worse by curing the strong currency using liquidity to weaken it.
What today’s economic managers don’t know is Titanic in nature. There is no practical solution to the economic problems of today making gold in all forms desirable long term.



Turmoil at MF Global/Official states firm Co Mingled funds/gold and silver decoupled from the Dow

Good evening Ladies and Gentlemen: Turmoil continues in the aftermath of the MF Global Bankruptcy.  An official from the firm today confirmed that the company co mingled customer funds with their own.  Many will be afraid to invest funds in the stock market for fear that the management at these financial giants will steal from them. We will discuss this in detail in the body of my commentary: (



The Inside Story Of What Brought Down MF Global

Now that the affdavit of MF Global COO Bradley Abelow has been filed, we finally get the inside scoop of just what the events were that brought the company to its knees, and what specifically were the precipitating catalysts that ultimately led to the Halloween massacre. The relevant part begins with section E, paragraph 33, on page 13. "As a global financial services firm, MF Global is materially affected by conditions in the global financial markets and worldwide economic conditions. On September 1, 2011, MF Holdings announced that FINRA informed it that its regulated U.S. operating subsidiary, MFGI, was required to modify its capital treatment of certain repurchase transactions to maturity collateralized with European sovereign debt and thus increase its required net capital pursuant to SEC Rule 15c3-1. MFGI increased its required net capital to comply with FINRA’s requirement...." Read on.

Remember Fukushima? It's Back

The problem with sweeping unresolved problems, especially of the unstable gamma decay variety, is that they tend to pop up at the most inopportune of times. Such as during global coordinated fiat ponzi bailouts. Kyodo reports that according to TEPCO a fresh fission reaction has restarted at Fukushima Daichi, and that boric acid is being injected to control a "possible nuclear reaction." Hardly the encouraging news that the world needs right about now.

Here's Who's Freaking Out Now That Greece Will Hard Default

Eric De Groot at Eric De Groot - 57 minutes ago
If Greece leaves the EU, the contagion will spread faster than policy makers can schedule emergency meetings. REMINDER: Here's Who's Freaking Out Now That Greece Will Hard Default A disorderly default in Greece just became a much bigger possibility, after PM George Papandreou announced a referendum on austerity yesterday. If the Greeks vote no, this could be the end of Greece's participation... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Morgan Stanley On What Happens Next In Greece, And Why It Is All Very Euro Negative

Friday’s confidence vote in the Greek parliament will be extremely important in our view and will likely set the pace of the anticipated EUR decline over the coming months. Greek Prime Minister Papandreou could now find it difficult to win a confidence vote (due Friday 10GMT) given the defections from the government leave only the slimmest of majorities (just 151 votes in the 300 parliament). If the Greek PM fails to win the confidence vote then the government will fall. There is the possibility for a new Government under a different PM or the formation of a unity government. But these outcomes seem unlikely given that the opposition is strongly in favour of new elections. While new elections will delay the vote on the new budget reform measures and potentially delay the next round of bailout funds from the EU, this is likely to be seen as one of the most positive (least bearish) outcomes for the EUR as it will avoid a referendum. There could even be an initial relief rebound for the EUR on any news that a referendum is being avoided, by the continued uncertainty and delays with regard the passing of the new budget measures and payment of EU bailout funds will likely keep the EUR under pressure over the medium term. Indeed, most of the options under discussion in the market are EUR negative in our view. A victory by Papandreou in the confidence vote on Friday is likely to be seen as the most bearish for the EUR, opening the door to a referendum and the potential rejection of the bailout package by the Greek population.

November 1 2011: The Collapse of the Tower of Financial Babel

Ilargi at The Automatic Earth - 2 hours ago

Gustave Doré The Confusion of Tongues 1865Ilargi: As the financial world follows its best month in the markets in a long time with a spectacular fall on fears that the people of Greece may actually get a say in their future through a referendum (the reactions from the Merkels and Sarkozy's are at the very least amusing, even if downright scary too), Ashvin looks at the words that have been and

"We are Confused" | Oakland Police Officer's Association Open Letter to the Citizens of Oakland
11/01/2011 - 15:32
Oakland is struggling – we need real leaders NOW who will step up and lead." ~ Oakland Police Officer’s Association

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