You think the US Economy is Recovering ?!

[cubeless]

Where exactly did the money from TARP come from? Was it all financed by foreign investors such as China who already held dollars? Was any of the money created by the government selling treasuries to the Federal Reserve?

the magic of 'quantitative easing'... http://en.wikipedia.org/wiki/Quantitative_easing

 

[Zebo]

JS80 - here is what I was talking about borrowing at zero and paid at 3 for privilege, mechanics are all here:

Because of the Collapse of 2008 financial reforms, the big investment banks are able to borrow money from the U.S. government at 0 percent interest. Then they can turn around and buy short-term bonds that pay 2 or 3 percent annual interest. Now they’re making 2 percent on whatever they borrowed. They can use leverage to increase this number, by pledging some of the bonds that they’ve already bought as collateral on additional bonds.

http://blogs.law.harvard.edu/philg/2009/10/17/how-wall-street-is-making-its-billions/

 

[JS80]

JS80 - here is what I was talking about borrowing at zero and paid at 3 for privilege, mechanics are all here:



http://blogs.law.harvard.edu/philg/2009/10/17/how-wall-street-is-making-its-billions/

It's wrong. Short term paper doesn't yield 2-3%. The shortest paper yields 0, the 2 year yields 0.90%. You need to go 5-10 years to yield 2-3%. I doubt they are buying 10 year bonds.

http://finance.yahoo.com/bonds

 

[werepossum]

It's wrong. Short term paper doesn't yield 2-3%. The shortest paper yields 0, the 2 year yields 0.90%. You need to go 5-10 years to yield 2-3%. I doubt they are buying 10 year bonds.

http://finance.yahoo.com/bonds

I'm amazed that anyone is buying ten year bonds. Correct me if I'm wrong but didn't they pull the last offer of thirty year bonds?

 

[JS80]

I'm amazed that anyone is buying ten year bonds. Correct me if I'm wrong but didn't they pull the last offer of thirty year bonds?

hmm...yea it looks like they did http://www.treasurydirect.gov/RI/OFNtebnd

 

[bfdd]

It would be nice if our politicians could learn to spend within their means. I mean I do it everyday as to plenty of other people. I can't afford a Ferrari so I don't go ask for the money to buy one even though I would like to have one.

 

[Darwin333]

Don't oh geez me I am perfectly aware how the federal reserve system works. It is clear you do not.

The profits are paid to the Treasury after dividends are paid. The federal reserve is not government. It's a separate entity. Right now it's getting muddled because recent fed governors are getting political due to the president appointing them.

There is a huge difference between what it is supposed to be and what it actually is. For the purpose of this discussion, the Fed can be considered a part of the treasury which is part of the Federal Government.

Even beyond this discussion, if the Fed writes a check whose ass is on the line? Do you think the real intent of the Feds quantitative easing was to lower consumers cost of credit or the Federal Governments? How about the Feds charter, do you think that is being upheld and if not why do you suppose Congress hasn't slapped their nuts if they are not working in concert?

 

[Darwin333]

It would be nice if our politicians could learn to spend within their means. I mean I do it everyday as to plenty of other people. I can't afford a Ferrari so I don't go ask for the money to buy one even though I would like to have one.

LOL. It would be nice if my dog shit bricks of gold too. Unfortunately, I think my dog has a better chance of shitting gold than our Congress does of passing a truly balanced budget.

 

[JS80]

There is a huge difference between what it is supposed to be and what it actually is. For the purpose of this discussion, the Fed can be considered a part of the treasury which is part of the Federal Government.

Even beyond this discussion, if the Fed writes a check whose ass is on the line? Do you think the real intent of the Feds quantitative easing was to lower consumers cost of credit or the Federal Governments? How about the Feds charter, do you think that is being upheld and if not why do you suppose Congress hasn't slapped their nuts if they are not working in concert?

That's a separate debate.

 

[heyheybooboo]

I'm amazed that anyone is buying ten year bonds. Correct me if I'm wrong but didn't they pull the last offer of thirty year bonds?

hmm...yea it looks like they did http://www.treasurydirect.gov/RI/OFNtebnd

30-years bonds are sold once a month.

The bonds of Dec 15 had an interest rate of 4-3/8% with an effective yield of 4.520%. Total tenders were $31,812,260,000 with $12,981,895,000 accepted.

The bonds of Nov had a similar rate and yield. Total tenders were $36,122,450,000 with $15,972,237,100 accepted.

The auction for Jan will be tomorrow or Friday.




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[Nemesis 1]

You're an idiot. You throw around a term like "wealth redistribution" like McCarthy used "communist".

Yor are irrational and spout buzzwords as your argument.

YOU are the one supporting policies that have led to massive wealth distribution to the top, but you are not honest enough and too much the idiot to get that.

Progressives support a healthy distribution of wealth, not too much mot too little.

You don't get that policies affect this, you run around like a child screaming 'poopyhead'.

Why so much Hate in you. Why do you believe what you believe and your opinion is the only solution . Step back take a deep breath and THINK.

 

[JS80]

30-years bonds are sold once a month.

The bonds of Dec 15 had an interest rate of 4-3/8% with an effective yield of 4.520%. Total tenders were $31,812,260,000 with $12,981,895,000 accepted.

The bonds of Nov had a similar rate and yield. Total tenders were $36,122,450,000 with $15,972,237,100 accepted.

The auction for Jan will be tomorrow or Friday.




--

Buying 30 year bonds with overnight money is suicide (if it's even allowed by the fed). And the 30 year wasn't even sold this month presumably due to lack in demand.

 

[bfdd]

Will the government "loan" me a few million at 0%?

 

[ayabe]

Will the government "loan" me a few million at 0%?

They will actually, just draw up your concept of a hybrid vehicle on a napkin and mail it in.

 

[heyheybooboo]

30-years bonds are sold once a month.

The bonds of Dec 15 had an interest rate of 4-3/8% with an effective yield of 4.520%. Total tenders were $31,812,260,000 with $12,981,895,000 accepted.

The bonds of Nov had a similar rate and yield. Total tenders were $36,122,450,000 with $15,972,237,100 accepted.

The auction for Jan will be tomorrow or Friday.




--

Buying 30 year bonds with overnight money is suicide (if it's even allowed by the fed). And the 30 year wasn't even sold this month presumably due to lack in demand.

There will be an auction of $13 bil of 4.375% 30-year paper on Jan 14. That leaves (IIRC) around $15 bil outstanding.

30-year paper was discontinued in 2001-2002 and resumed with (generally) quarterly auctions. Beginning in Jan of 09 the auctions have been held monthly.


TREASURIES-Bonds gain as stocks retreat

... the U.S. Treasury will auction $21 billion of 10-year debt on Wednesday and $13 billion 30-year bonds on Thursday. ...

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[StageLeft]

Geeze, I can't say I'd be excited about the prospect of locking up USD at 4.375% interest rate for 30 years. Basically the only way that is not a bad move is if the economy pulls a Japan for a few decades straight, which of course it very well might do.

 

[JS80]

There will be an auction of $13 bil of 4.375% 30-year paper on Jan 14. That leaves (IIRC) around $15 bil outstanding.

30-year paper was discontinued in 2001-2002 and resumed with (generally) quarterly auctions. Beginning in Jan of 09 the auctions have been held monthly.


TREASURIES-Bonds gain as stocks retreat




--

lol excuse me for not seeing it on here http://www.treasurydirect.gov/RI/OFNtebnd

But thanks for addressing my more important statement that buying 30 year bonds with overnight money is suicide (if it's even allowed by the fed).

 

[JS80]

http://online.wsj.com/article/SB10001424052748704398304574597910616856696.html

This article is saying that banks are borrowing from federal reserve and buying securities. This makes no sense unless t-bonds are treated as cash on the balance sheet, which I'm pretty sure they are not, hence not counted toward reserves.

I'm not in the banking industry, if someone is please chime in on this.

 

[Darwin333]

Geeze, I can't say I'd be excited about the prospect of locking up USD at 4.375% interest rate for 30 years. Basically the only way that is not a bad move is if the economy pulls a Japan for a few decades straight, which of course it very well might do.

Who cares if you borrowed it at 0%? If the Government gets to the point that they are defaulting on the bonds then the banks will likely be tits up regardless.

Granted I don't know how long the banks get to hold the money they borrow from the fed but at 0% and the huge sums we are talking about it would be rather hard not to make money.

 

[Zebo]

http://online.wsj.com/article/SB10001424052748704398304574597910616856696.html

This article is saying that banks are borrowing from federal reserve and buying securities. This makes no sense unless t-bonds are treated as cash on the balance sheet, which I'm pretty sure they are not, hence not counted toward reserves.

I'm not in the banking industry, if someone is please chime in on this.

They are buying both Stock and treasuries
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKKgluIR_pqQ

And reserve limits don't matter so much when you can value assets at 2007 prices.

 

[StageLeft]

Who cares if you borrowed it at 0%? If the Government gets to the point that they are defaulting on the bonds then the banks will likely be tits up regardless.

Granted I don't know how long the banks get to hold the money they borrow from the fed but at 0% and the huge sums we are talking about it would be rather hard not to make money.

First, nobody really knows what's going to happen. Once we agree upon that, though, from various scenarios here is one:

http://finance.yahoo.com/tech-ticker/marc-faber-the-next-thing-you-need-to-worry-about-is-the-piigs-403497.html?tickers=tbt,tlt,^n225,^ftse,USDJPY=X,^gspc&sec=topStories&pos=9&asset=&ccode=

But within 5-10 years, the United States will be forced to quietly default on its debt, most likely by printing money and destroying the value of the currency.

Which is why I mentioned Japan. They've been going on with heavy gov intervention but their inflation has remained in check because their economy has been struggling now going on what two decades, even in recent years their non-recession times have been very sluggish growth. And now they're back in the toilet.

 

[wwswimming]

Jeez ! i'm not the only economics geek around here.

there were 2 stats that were for some reason given mainstream media attention today Jan. 14, when one of them (the 2009 foreclosure rate) has been known for a while.

on the first one, bear in mind that this is for Christmas time - when everybody was supposed to be spending.

(so go buy some stuff at your favorite etailer !

http://www.reuters.com/article/idUSN1416882220100114

"Retail sales fall unexpectedly, jobless claims up"

WASHINGTON (Reuters) - U.S. consumers unexpectedly curbed their Christmas spending in December and more people filed claims for jobless benefits last week, casting fresh doubts on the durability of the economic recovery once government support fades.

The Commerce Department said on Thursday retail sales fell 0.3 percent last month, the first decline since September, as consumers spent less on vehicles and an array of other goods during the holiday shopping month.

Analysts had expected an increase of 0.5 percent, but disappointment was tempered by upward revisions to prior months' data. November sales were revised to show a 1.8 percent gain from an initially reported 1.3 percent increase, and October sales were bumped up a touch as well.

A separate report from the Labor Department showed initial claims for state unemployment benefits rose 11,000 to 444,000 last week, higher than the 437,000 claims analysts surveyed by Reuters had forecast."

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http://www.msnbc.msn.com/id/34847676/ns/business-real_estate/

"Foreclosures set a grim record in 2009
2.8 million households were faced with actions, number expected to rise

MIAMI - A record 2.8 million households were threatened with foreclosure last year, and that number is expected to rise this year as more unemployed and cash-strapped homeowners fall behind on their mortgages.

The number of households that received a foreclosure-related notice rose 21 percent from 2008, RealtyTrac Inc. reported Thursday. One in 45 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions.

In December, more than 349,000 households, or one in 366 homes, were hit with a foreclosure-related notice. That represents a 14 percent spike from November and a 15 percent jump from December 2008."

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more D.E.N. (Depressing Economic News).

i don't mean to get my jollies marvelling at people's misfortune, but this is f'ing incredible to watch.

if i worked in venture capital i'd be asking a lot of people, "so who is going to buy your cool new product, and how are they going to pay for it ?"

it's very obvious that the US is moving even more towards a "Command Economy" (centralized economy like in the USSR and China 20 years ago). the US military budget was already a massive form of socialism - it's just that it wasn't considered polite to point this out if you worked at a defense contractors, where most employees claim to despise socialism.

the US government is becoming the employer & funder of last resort, and it's all paid for with borrowed and printed dollars.

it's obvious where this is going - if you're currently unemployed, you might be able to get a job with the 2010 census. in other words, it is working out that the government is playing a bigger role in the economy. (without extra government spending in 2009, GNP would have been down about 9%).

and, we'll be LUCKY if the dollar only devalues 50% against commodities of genuine value (water, wheat, sugar, maybe milk, possibly gold & silver).

 

[Zebo]

Jeez ! i'm not the only economics geek around here.

"Retail sales fall unexpectedly, jobless claims up"

I always love how they say 'unexpectedly' as if the CNBC cheerleaders gospel somehow must come to pass and they are shocked, shocked I tell ya when it repeatedly fails. The economic news will "unexpectedly" get worse and worse until debt is cleared from the system as I've said since collapse.

Long and short of it is a healthy economy requires demand come from the bottom up. You don't build a new factory, invest in R&D, open a liquor store, etc if no one out there has any money to spend. American's are tapped and jobless and have no money to spend. We staved off a lot of this crash back in 01' and got money back on the street, in peoples hands, with the pyramid housing scheme, all it's jobs, HELOC's and such but that's over. Not only over but the Wall Street bankers are basking in billions of taxpayer bonuses, own our upside down mortages, and our future tax receipts because all the treasuries they own. The real problem is how to get money on the street when Americans are tapped. There are ways like wholesale write-downs restructuring but there is no way bankers will allow that.

 

[Zebo]

it's very obvious that the US is moving even more towards a "Command Economy" (centralized economy like in the USSR and China 20 years ago). the US military budget was already a massive form of socialism - it's just that it wasn't considered polite to point this out if you worked at a defense contractors, where most employees claim to despise socialism.

You have two choices in the matter of natural wealth coalescence: revolution French style and about 1000 others or sensible redistribution. Call it commie all you want but it's been practiced at least as far back as Homestead Act here.

 

[Zebo]

Who cares if you borrowed it at 0%? If the Government gets to the point that they are defaulting on the bonds then the banks will likely be tits up regardless.

Granted I don't know how long the banks get to hold the money they borrow from the fed but at 0% and the huge sums we are talking about it would be rather hard not to make money.

Government/FED has superpowers and can (actually does) print new money so no way they default, the bankers WILL get their money, with interest. The results are inflation and devaluation of currency basically huge hidden flat tax on fixed income, wage earners and cash holders who suffer.

We are getting closer and closer to what a learned founder knew would happen - banks own all, politics, property, wages, people etc by very nature of their purse string control. All my kids are getting accounting degrees and off to a top 10 Business school if I have anything to say about it. Momma's don't let you're babies grow up to be Doctors, engineers and lawyers but bankers instead.:whiste: I know I know don't sound quite as nice as willies version but it's true.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. – Thomas Jefferson (1809)