Tag Archives: debt

Short of a Full Accounting

09 Monday Dec 2019

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Much like the criminal government, the criminal central bank just can’t tell the truth about anything. If they even know what’s going on. With REPO BUCKS! they do not.

Federal Reserve officials have attributed the problem to a rush of corporate tax payments and settlement for an unusually large settlement in Treasury bond auctions.

However, the BIS said that while those two factors help explain some of the problems, they fall short of a full accounting.

“None of these temporary factors can fully explain the exceptional jump in repo rates,” the bank wrote.

Other factors the institution cited include the heavy reliance on the “Big Four” banks for funding, the increased role that hedge funds are playing on the demand side for funding, and the adjustments that market participants are making following an extended period of ample reserves that has changed over the past two years.

…

Fed officials have puzzled over the banks’ unwillingness to lend into the market when the Sept. 17 disruption happened. Discussion has centered around the role that post-financial crisis capital regulations have played as well as the interest the Fed continues to pay on bank reserves.

Such reluctance in the future poses continued threats, the report said.

Puzzling! A total mystery that we will never understand. Ah well, back to the TeeVee. It’s only the economy and whatnot. Sorcery = a puzzle.

THIS! is what gets the Goldman???

10 Sunday Nov 2019

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Forget about the Fed front-running, the election rigging, and the literal nation-wrecking. No, the problem with Goldman is their Apple Card Gender Algorithm…

In a series of Twitter posts starting on Thursday, David Heinemeier Hansson railed against the Apple Card for giving him 20 times the credit limit that his wife got, Bloomberg reported on Saturday. (https://bloom.bg/2X4IX2X)

Hansson, who is the creator of web-application framework Ruby on Rails, didn’t disclose any specific income-related information for himself or his wife but said they filed joint tax returns and that his wife had a better credit score, the report said.

New York’s Department of Financial Services confirmed that an investigation was being conducted.

Andrew Williams, a Goldman Sachs spokesman, declined to comment on whether Hansson had contacted Goldman regarding the concerns raised on Twitter because the bank does not discuss matters involving individual customers publicly.

The Apple Card, launched in August, is Goldman’s first credit card. The Wall Street investment bank has been offering more products to consumers, including personal loans and savings accounts through its Marcus online bank.

The Department of Financial Services “will be conducting an investigation to determine whether New York law was violated and ensure all consumers are treated equally regardless of sex,” a department spokeswoman told Reuters in a statement.

Now we need an investigation into that department spokeswoman for (correctly!!!) identifying “sex” as “sex,” rather than “gender.” Then, we’ll need to go after Reuters for assuming her gender with this “spokeswoman” business.

Why is “raise taxes” always the go-to?

06 Wednesday Nov 2019

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Another Boomer reads from the worn, old script.

Dalio, who founded the hedge fund in 1975, told CNBC from the Greenwich Economic Forum that the national debt, pension liabilities and health-care liabilities will ultimately have to result in higher taxes since defaulting isn’t an option.

“We’re dealing with almost a currency issue, longer term, in terms of what is the value of currency when those liabilities – not only the debt liabilities, but the pension liabilities and the health-care liabilities, which are like debt. They are promises that have to be paid – they will either be paid by higher taxes or they’ll be not paid and defaulted on,” he said.

“I don’t think they will be defaulted on,” he added. “I think by and large they’re going to be paid, but if they raise taxes too much, then it changes the nature of that economics.”

Category error. It’s not “almost a currency issue.” It’s not economics. It’s sorcery. Including everything that could be a liability, there isn’t enough wealth left to tax. Default is a given. The choice is to do it peaceably and gracefully or to suffer collapse and war. And, war is the default condition.

Will Sorcery Affect the Food Supply?

01 Friday Nov 2019

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At a time when Americans are obviously eating more than ever, the farm industry requires massive subsidization.

The Agriculture Department projects that farm incomes will reach $88 billion in 2019 but nearly 40% of that — $33 billion — will come from trade aid, disaster assistance, the farm bill and insurance indemnities, according to a new report by the American Farm Bureau Federation (AFBF).

Why it matters: Farmers — a critical constituency for President Trump in the 2020 presidential election — are feeling the squeeze from China’s retaliatory tariffs, extreme weather and record-high farm debt that’s driving farm bankruptcies.

By the numbers: In a 12-month period ending in September 2019, Chapter 12 farm or fishery bankruptcies totaled 580 filings, up 24% from a year earlier and the most since 2011, when 676 chapter 12 bankruptcies were filed.

Wisconsin experienced the highest Chapter 12 bankruptcy filings at 48 filings, followed by 37 filings in Georgia, Nebraska and Kansas.

Iowa, Kansas, Maryland, Minnesota, Nebraska, New Hampshire, South Dakota, Wisconsin and West Virginia reported Chapter 12 bankruptcy filings on par with or above 10-year highs

One wonders if the banksters eat too. And this is all during the “boom” times.

“Like” and “Could Be”

29 Tuesday Oct 2019

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Like, there could be a depression in this banana republic.

At this point, if the Federal Reserve stops juicing the economy, Pento argues, we could be looking at another depression.

“That’s why the Fed’s panicking,” he said. “If anybody still believes they’re omniscient or omnipotent or know their butt from their elbow, that’s over.”

The Federal Reserve is expected to lower its benchmark interest rate this week by 25 basis points, the third such cut in three months. According to the minutes from the Sept. 17-18 meeting, “downside risks had become more pronounced since July,” yet “several participants” wanted the Fed to provide more clarity on when the response to those risks, including “trade uncertainty,” would end.

The fun side of sorcery – nearly unlimited free fiat for the banksters!

The dark side – 100% rates for the working poor!

And yet today, just a few years later, many of the same subprime lenders that specialized in the debt are promoting an almost equally onerous type of credit.

It’s called the online installment loan, a form of debt with much longer maturities but often the same sort of crippling, triple-digit interest rates. If the payday loan’s target audience is the nation’s poor, then the installment loan is geared to all those working-class Americans who have seen their wages stagnate and unpaid bills pile up in the years since the Great Recession.

The crisis is too big not to fail.

This is Becoming Tiresome

24 Thursday Oct 2019

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Just the other evening, I was talking to MB about some TPC business. I relayed that I was tired of the daily dose of debt news from the WSJ – every day bringing another installment of the REPO BUCKS game as if it was something completely new. Then, today, the announcements changed.

The Federal Reserve Bank of New York is boosting the amount of temporary liquidity it is willing to make available to financial markets starting this week, the bank said on Wednesday.

It said that as of Thursday, the minimum size of its overnight repurchase-agreement, or repo, operations will rise to $120 billion, from what had been at least $75 billion. Longer-term operations will rise from a minimum daily offering size of $35 billion and go up to $45 billion in interventions scheduled for Thursday and Oct. 29.

Do the math! Now, every single day, they can (and will) add $165 Billion in fake money for the banks. Why? Honestly, who cares? How long will this continue? Who cares? $165 Bn is the near-equivalent of the entire nominal GDP just 100 years ago. Every day.

Sorcery.

Enter the Sag: “This cycle is fading”

18 Friday Oct 2019

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The sorcery has its limits. Ray Dalio says we’ve found them.

Hedge fund owner Ray Dalio said the global business cycle is in a “great sag” and the world’s economy holds at least two parallels to the 1930s.

Speaking a CNBC-moderated panel at the IMF and World Bank annual meetings in Washington, D.C. on Thursday, Dalio said it was now too late for central banks to make much difference as economies enter a natural downturn.

“This cycle is fading, we are now in the world in what I would call a ‘great sag’,” said Dalio, adding that monetary policy, and especially interest rate reductions, were unlikely to offer much stimulus.

“Europe is at the limitation of that, Japan is (too) and the U.S. doesn’t have much to go on for that,” he told CNBC’s Geoff Cutmore.

Dalio said the world was also experiencing the biggest wealth gap since the 1930s and that was creating political stress.

He goes on to mention geopolitical war. One or more of those may strike a little closer to home than most would think possible. It’s not going to be pretty, but it is survivable. Now, what was the ancient punishment for sorcery? As the cycle fades, may the fires rise.

The Check’s in the Mail

17 Thursday Oct 2019

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Great news, Amerika! You’re each and all $9,432 richer this year! Thanks, Sorcerers!

The federal debt increased by $1,203,343,570,253.55 in fiscal 2019, according to data released by the U.S. Treasury Department.

That equaled approximately $9,432 for each of the 127,586,000 households the Census Bureau estimated were in the United States in 2018.

In the decade that began on the first day of fiscal 2010 and ended on the last day of fiscal 2019, the federal debt increased by $10,809,572,749,922—for an average of $1,080,957,274,992.20 per year.

Remember, we owe this to ourselves. So, think of what you can buy when your cash comes in. Uh, but please don’t think about how this owing it to us stuff works. Some thoughts are not meant to be.

Even Hellywood Notices the Sorcery

09 Wednesday Oct 2019

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Odd, I know. One class of wizards observes another. “Out of control.”

A ripple of anxiety ran through Wall Street on Sept. 9 when Jay Clayton, chairman of the SEC, warned that corporate debt now stands at $11 trillion, half the annual gross domestic product of the United States. “Should we be cognizant of the growth in corporate debt, who holds that debt and the potential ramifications for our markets and our economy?” Clayton asked. “Of course we should.”

His warning was timely for Hollywood, coming just a couple of weeks before Endeavor Group Holdings CEO Ari Emanuel pulled the plug Sept. 26 on an initial public offering that investors had regarded warily because of his company’s staggering debt of $4.6 billion.

Yeah, poor, satanic Hellywood… Maybe the one faction should have consulted with the other? Just as the government debt dooms the state, the corporate debt dooms those artificial government-created entities. When they all fall, not much will be left standing. It’s like when Apprentice Mickey unleashed heck, but with no “good” wizard standing by to fix things – and real, not a cartoon. Speaking of, hopefully, this will bring the end of  Devil Mouse, Inc.

Repo the Domino

08 Tuesday Oct 2019

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These things are coming almost too fast to keep up with. My TPC column, which will be published after I schedule this post, though not necessarily before the post hits, is called “Repo-ing the Economy.” It’s more about the fun and games of the Fed’s dark sorcery. Now, this.

Some investors are concerned that recent turmoil in a key short-term cash market where banks borrow to fund operations could exacerbate difficulties trading bonds.

Spikes in the cost of overnight loans using repurchase agreements, or repos, could hit bond trading in two ways, investors and analysts said. Rising repo rates make it more expensive for securities dealers to borrow money and to hold government bonds—actions they take frequently to facilitate client trades and manage their risks.

In the repo market, where banks and money-market mutual funds typically lend cash for periods as short as one night in exchange for safe collateral such as Treasurys, rates surged as high as 10% last month from about 2.25% amid an unexpected shortage of available cash in the financial system.

Couple this with what’s going on with China’s cash crash and you get the feeling that a global financial meltdown is upon us – now, not in the future. Bank run, anyone?