GEITHNER REFUSES TO BUY LONG TERM US TREASURIES

EASY READING CULTURE OF LIFE NEWS:  GEITHNER REFUSES TO BUY LONG TERM US TREASURIES « Culture of Life News 2

End the Fed march in NYC, November 2008

The crash continues and worsens.  The Republicans didn’t buy the Bank Bail Bill II but then, they only go on wild spending sprees when a Republican is President. Then, become Scrooges when a Democrat is President.  Yesterday, in one of the most important speeches of the 21st century so far, Putin warned the US to not do what we just did.  But perhaps Benanke and Geithner did take Putin’s warnings to heart!  Look at the news from the last two days, concerning the buying of long-term Treasuries.First, yesterday’s headlines in the morning:

 

Bloomberg.com: Worldwide

Fed Keeps Rate Near Zero, Is Ready to Buy Treasuries 

Everyone who needed to park loot were very happy when they saw this news.  The Treasury and the Fed would be the one and the same except this meant, both would be run by JP Morgan, etc, all those stupid, nasty gnomes.  There was a microsecond of fear that Geithner’s warnings about lobbyists would cause harm to these greedy little monsters.  But Obama’s selection of a Goldman Sachs lobbyist to be the #2 slot settled these fears.  Time to party!  Hooray for gnomes!

 

But something slipped between cup and lip.

 

TREASURIES-Bonds tumble as Fed refrains to buy long debt | Markets | Bonds News | Reuters

U.S. Treasury debt prices tumbled on Wednesday after the Federal Reserve refrained, for now, from buying long-dated government debt, disappointing investors who hoped for a bold move to help a fragile economy.

The Fed’s perceived caution led to a sharp sell-off in Treasuries, particularly among long-dated issues. The 30-year bond resumed its recent price decline, falling for seven of the past eight sessions. The 30-year yield briefly broke above 3.46 percent, the highest rate since Dec. 1.

“What was disappointing to some traders in the market is that…they are talking about buying them but not actually doing it,” said Stuart Spodek, co-head of U.S. fixed income with the BlackRock Fixed Income Portfolio Management Group in New York.

It was all talk!  HAHAHA.  Our entire financial systems and soon, much of our economic systems are being rapidly nationalized.  Without giving control over to the State. This is the exact reverse of what is going on inside Russia. Putin is actively running down and taking over all the important systems in Russia.  He isn’t going to bail out the oligarchs.  He is killing them off.  Literally.  Like the Chinese, he believes that these gnomes need to be on a very short leash or with a bullet in the back of the head.

 

I have called Bernanke ‘the Sphinx’ in the past.  He came into office, lying about being open and forthright.  He claimed, he would be different from Greenspan, the oldest of the old toads who believe still in ‘free trade’ and ‘fluctuating monetarism’.  Unlike Greenspan who mostly talked backwards and made little sense as he screwed up things more and more, Bernanke is using the old ‘outright lying’ tool.  Say one thing and then do the opposite is pretty cool but also sends more fear down gnome spines and now everyone trusts no one and this is fitting.

 

This is what we call, ‘a falling out amongst thieves.’  Congress is busy trying to undo the mess and this is causing more fear in grossly overextended banking gnomes.

 

Bloomberg.com: Worldwide

U.S. Draft Law Would Ban Most Trading in Credit Swaps 

Draft legislation that would change how over-the-counter derivatives are regulated might prohibit most trading in the $29 trillion credit-default swap market.

House of Representatives Agriculture Committee Chairman Collin Peterson of Minnesota circulated an updated draft bill yesterday that would ban credit-default swap trading unless investors owned the underlying bonds. The document, distributed by e-mail by the committee staff in Washington, would also force U.S. trading in the $684 trillion over-the-counter derivatives market to be processed by a clearinghouse.

There has been this move online to try to justify CDS markets.  One big, fat lie is to claim, there is no $684 trillion time bomb in the center of these markets!  One thing is certain: when any market or banking system suddenly shoots straight to the moon, when it rapidly becomes a ‘hockey stick’ graph as it doubles every two years, we are seeing something that is dangerous and should be made illegal.  

 

Back in 2002, it was painfully obvious that the CDO markets were a rigged game, a Ponzi scheme.  I called it this from day one, on my blog.  It is such a snarly ball of twine, unwinding it will be nearly impossible.  This business has to be eliminated roughly, Putin-style.  Putin even suggested this yesterday in his epic speech.  The fact that Congress will ‘prohibit most trading’ shows us that the entire business is a wretched fraud.

 

It supposedly was to eliminate risk.  Instead, it caused an explosive growth in risk.  Anything that eliminates risk will cause it to explode because the perception of risk leads to caution and if there is no perceived risk then caution is thrown to the winds and wild speculation and lending takes off like a rocket.  Between ZIRP from the Japanese carry trade to the CDO markets eliminating the perception of risk, we had the biggest global credit bubble in history.  Never, ever has one grown so fast and so deadly!

 

Will governments’ fiscal stimulus plans work? | Big government fights back | The Economist

Emerging economies are spilling less red ink, both because their banking industries are in less of a mess and because their stimulus plans, in general, are smaller. But they, too, will shift from a budget surplus in 2007 to a deficit of 3% of GDP. All told, public-sector debt is rising at its fastest pace since the second world war.

Most economists agree that the red ink is both unavoidable and appropriate. To prevent a steep recession becoming a depression, governments must step in to forestall financial collapse and counter the slump in private demand. Financial markets seem to agree. Yields on government bonds in most rich countries are extremely low as shell-shocked investors clamour for the safety of public debt.

Yet a few signs of skittishness are emerging. Prices of credit-default swaps on sovereign debt have risen sharply, suggesting that investors see growing risks of default. Within the rich world, risk premiums have risen dramatically for already-indebted governments such as those of Greece and Italy. Yields on America’s 30-year bonds saw their biggest jump in two decades in mid-January, as investors fretted about Uncle Sam’s demand for cash.

Normally, the G7 economies take a very nasty attitude towards third world country finances.  We use the World Bank and the IMF to hammer these unfortunate countries into the ground and steal all their natural resources and enslave them to pay off ‘rescue’ loans.  For the last two decades, many people have campaigned for an elimination of these debts.  But the US always vetoed this.

 

Now, thanks to the cruel rules of the US warmongers who run these banks, the third world is much stronger than the first world and is not the cause of this collapse.  True, they will now be hammered by the messes created by the US and UK .  But they didn’t make this baby!  They might be victims of it, but they didn’t cause it.  The US and UK should be severely punished for creating this mess.  Instead, we want to slip the noose by even wilder public spending and stealth nationalization of everything so that the debt is removed from private hands and dumped on top of the US government.  Then, the hope is, the US can default on these debts and voila!  End of the mess.

 

Or rather, the US can cut the value of the dollar by over 50% in one day as we have done in the past.  Ask Nixon’s ghost about that!  He did it on a weekend, secretly!  My parents were stranded overseas and the State Department said, ‘Too bad, we can’t send you double the money right now!’  It was a frightful mess.  Now, let’s look at many headlines:

 

Orders for Durable Goods in U.S. Slide 2.6%, More Than Economists Forecast

Ford Burns $5.5 Billion in Cash, Taps Revolving Loan After Worst Loss Ever

U.S. Unemployment-Benefit Rolls Surge to Record; Initial Claims Increase

Treasury Said to Back $60 Billion Plan to Revive U.S. Student-Loan Market

Pimco Says U.S. Must Support Asset Prices for Economic Recovery Next Year

 Policy makers must stop declines in asset prices to revive the U.S. economy in 2010 and curb rising unemployment, according to Bill Gross, co-chief investment officer of Pacific Investment Management Co., the world’s biggest bond fund.

“You can’t bail out everyone, yet economic recovery is not possible unless certain critical asset sectors are not only reliquefied but rejuvenated in price,” Gross wrote in his February investment outlook posted today on the firm’s Web site….

Policy makers should purchase municipal bonds, commercial mortgage-backed securities and investment-grade corporate bonds as a “necessary step towards eventual economic revival,” Gross wrote.

“The prior administration’s focus on the banks has been critical but unidimensional,” he wrote. “The shadow banking system with its leverage and financial innovation powered a near 25-year global economic expansion, but it is the delevering of those hidden quasi-banks that is now threatening its petrification.”

All signs of a Great Depression.  All the economic indicators are slowly falling to Great Depression levels.  We passed the Jimmy Carter contractions, the Nixon contractions, the end of Eisenhower contractions and now, the only things we can compare this to is the Great Depression’s contractions.  

 

What Red Ink? Wall Street Paid Hefty Bonuses

Despite crippling losses in 2008, financial employees in New York collected an estimated $18.4 billion in bonuses for the year.

But no contraction of money going to gnomes!  What a stunning thing this is!  A bunch of goofy, idiotic and utterly reckless gnomes are still being rewarded with bonuses for screwing up the entire planet’s financial systems!  What a wonderful world it is, if you are a heartless, vicious creature!  I always thought, bonuses were profits.  Not hand-outs from Uncle Paulson and Uncle Bernanke.  Geithner better demand every penny of these faux bonuses be handed back to the US taxpayers!  This is, as always, an outrageous crime.  Arrest them all.  Just arrest them!  And take that Madoff creep to jail, too.  More about HIM later.

 

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