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The picture below shows $15 trillion dollars worth of $100 bills on $10 million dollar pallets stacked on top of each other over an area that is one third larger than a regulation football field. An electronics van is parked between the stack and the Statue of Liberty. A single $100 million dollar pallet rests in front of the truck’s cab. See it?Recently, I reported that the Federal Reserve Bank (FED) secretly gave ten trillion dollars of interest-free loans to over a dozen European banks to shore up the Euro and keep them financially solvent. I later found out that...

QE3 certainly has wreaked havoc on the agency mortgage-backed securities market. The Fannie Mae 30 year current coupon (rate to MBS investors on new Fannie MBS) spread over 10 year Treasures has gone NEGATIVE! As in -3.65 basis points. But if we compare the Fannie 30 year current coupon to 5 year Treasury yields, we have a positive yield spread of about 100 basis points. Meanwhile, Fannie Mae 3.5 MBS duration just went negative! So, The Fed’s QInfinity has really done a number on MBS yields … and risk. MBS investors may be lining up to dump agency MBS on...

The mainstream media in the United States is almost totally ignoring one of the most important trends in global economics. This trend is going to cause the value of the U.S. dollar to fall dramatically and it is going to cause the cost of living in the United States to go way up. Right now, the U.S. dollar is the primary reserve currency of the world. Even though that status has been chipped away at in recent years, U.S. dollars still make up more than 60 percent of all foreign currency reserves in the world. Most international trade (including the...

NEW YORK—The search for financial safety caused by deepening worries about Europe's debt crisis fired up demand for U.S. Treasurys, dragging yields on 10- and 30-year debt to new record lows. Benchmark 10-year notes yielded 1.409% as U.S. trading began, piercing below its previous intraday record of 1.437% set on June 1 on the back of a weak U.S. employment report. The 30-year ...

DYLAN GRICE: The Next Crisis Will Be Born Out Of The US Treasury Market Matthew Boesler Jul. 1, 2012, 6:23 AM SocGen investment strategist Dylan Grice does not think "safe-haven" assets are very safe. In Grice's latest note to clients, he compares the illusion of safety created by faulty regulation before the 2008 financial crisis to the new, impending wave of financial regulation on the table like Dodd-Frank in the U.S. and Basel requirements on a global scale. Grice warns "madness is going on in the government bond markets" today, furnishing this long term chart of US Treasury yields going...

Marc Faber of the Gloom, Boom, and Doom report appeared on Bloomberg T.V. recently, discussing the current bull market around U.S. Treasuries. The host asked if U.S. Treasuries are "the biggest bubble ever." Faber's response was "yes." If you me asked about the Nasdaq in December 1999, I would have said this is the biggest bubble ever. And yet the Nasdaq continued to go up 30 percent until March 21 2000, and then what happened and how have these people faired since they invested in the Nasdaq in the final months of 1999 and early months of 2000? It's been...

U.S. Treasury Bond 10-Year Yield Is Heading Up Above 6% Interest-Rates / US Bonds Mar 25, 2012 - 06:18 AM By: Andrew Butter The last time the yield on the 10-Year US Treasury dipped below 2% was in 1941; just before (not just after), the Japanese attack on Pearl Harbor. Perhaps then the recent 1.8% low was not just because of Euro-refugees, perhaps we are on the cusp of another Black Swan tail-risk potentially as devastating as World War II? Or perhaps there is another explanation? This article is a continuation of a series started two years ago which correctly...

Following today's unprecedented POMO failure due to "system difficulties" (one would hope the Fed's POMO machine does not start and stop every time someone pulls the plug from the socket), Brian Sack's team (not to be confused with the PWG team of Eric Mindich) had to reschedule the literally failed auction. As it turns out, the first opportunity to sell $8-$8.75 billion in 2013 bonds is on December 2. And unlike the December 21 "reverse" POMO which is due to take place at 1:15pm, the rescheduled bond sale will instead occur at its usual time of 10:15-11:00am. Ironically, this is...

The US Treasury and Wall Street dealers are set to discuss whether to introduce a new debt security to help finance the country’s mounting budget deficit in the coming years. Topping the agenda of a meeting on Friday between Treasury officials and dealers, who underwrite US government debt sales, is the possible introduction of floating-rate notes. In contrast to normal fixed-rate Treasuries, which pay the same coupon throughout their lifespan, the payment to investors from floating-rate notes would go up or down as the Federal Reserve changed short-term interest rates. That could make them attractive to investors who think that...

Post stocks which didn't fall dramatically today.... if we were REALLY having a market crash, everything across the board would fall. Example... Auto Zone Inc. (AZO) -- only went down about $6 per share from $322...not much of a crash there...regular fluctuations. Must be hundreds of others just like it. The markets are nothing but pure manipulation.

A sharply divided Federal Reserve is expected to take modest steps Wednesday to bolster stagnant growth and hiring amid European debt woes. The efforts likely won't have a dramatic impact, analysts say. But inflation concerns may preclude stronger medicine, and in any case prior doses of shock-and-awe easing didn't result in a self-sustaining, robust recovery.

The global credit markets are braced for deflation and perhaps depression. Panic flight to safety has pushed the yield on 10-year US Treasuries below 2pc for the first time in American history, exceeding the extremes of the Lehman crisis and the banking crash of the 1930s. Investors scrambled to buy the bonds of strongest industrial states on Thursday on fears of a double-dip recession on both sides of the Atlantic and a European banking crash, driving down their returns to investors. German yields fell to 2.08pc and Switzerland's 3-month rates have turned deeply negative. Markets were stunned by a plunge...

The weakness of the American consumer is having repercussions in China, which may stop buying more U.S. Treasurys as it focuses on internal consumption rather than exports, Stephen Roach, the non-executive chairman of Morgan Stanley Asia, told CNBC Wednesday That could result in "higher interest rates and/or a weaker dollar, and we’re not going to be able to fund ourselves on the terms we have been funding ourselves externally," he said. [Snip] "This is China’s wakeup call," he warned. China can "no longer afford to stay the course of export-led growth that is hooked on the bandwagon of the American...

Harry Truman, frustrated by economists who couched their opinions by saying "On the one hand...but on the other hand," wanted a one-handed economist. I've got one. James Fitzgibbon, director of the Highlander Fund, has been spot on in predicting the course of economic events for the past three years. As each estimate of GDP growth came in, I would e mail him and he would explain that the growth rate was materially overstated and then explain that it would soon be adjusted downward. And it was. He has been accurate in predicting a long, long term recession with only a...

The S&P downgrade was not as much a comment on the numbers of credit service as a comment on the political process. The political process is about confronting the probability of a hyper-inflationary collapse of our currency if fiscal irresponsibility, entitlement spending and bank bailout mentality are not addressed. If the credit rating firms had continued the charade of AAA quality, it would merely enable the not sustainable march toward hyper-inflation. Ultimately, the S&P downgrade of Treasuries is a downgrade of all dollar denominated assets. If we can print dollars to pay Treasury debt, it is the currency that is...

While a lower credit rating should increase the United States' borrowing costs, Treasury yields dropped Monday, the first day investors could react to Standard & Poor's downgrade of U.S. debt. That's because S&P's unprecedented move adds more uncertainty to the market, and greater uncertainty drives investors out of risky assets such as stocks and into perceived safe havens, including U.S. Treasuries. The yield on the benchmark 10-year Treasury note fell to 2.47% Monday morning from 2.56% late Friday. The yields on other Treasuries also retreated. "The U.S. Treasury sector remains the largest and most liquid fixed-income market in the world...

...Domestically, you are still better off with federal paper than state or municipals. The S&P is merely confirming the Sovereign Debt Crisis. There is no doubt that we have a serious Sovereign Debt Crisis. However, if that is the real reason for the S&P Downgrade, then it should apply to ALL countries and the real rating should be BELOW JUNK! Why? There is NO collateral! If a country defaults, you cannot go to court and seize property. You can’t run down to the National Art Gallery and start walking out with Renoirs. Illustrated above is a chart of the Total...

U.S. Treasury debt is as safe as it was before a Standard & Poor's rating downgrade of the United States and Congress' "damaging" debate over raising the country's debt limit, Treasury Secretary Timothy Geithner said on Sunday. Geithner, in an interview with NBC/CNBC television, also called on European leaders to ensure that there is an "unequivocal financial backstop" for euro zone governments facing fiscal and debt problems. He added that a double-dip recession was unlikely if governments and central banks made good decisions. Asked whether Treasuries were as safe now as they were last week, Geithner replied: "Absolutely. And the...

A credit rating is an informed opinion. Nothing more. Nothing less. That helps explain why one major credit rating agency -- Standard & Poor's -- has downgraded the United States, while another -- Moody's (Symbol : MCO Loading... ) -- has chosen to affirm its credit rating with caveats. Both agencies had the same essential set of facts about U.S. debt: There's a lot of it now. There's a lot more of it to come. And there's very little in the way of actual policy today that looks likely to seriously change that outlook. Where the agencies differ, however, is...

The U.S. dollar may weaken and Treasury yields rise when Asian markets reopen on Monday, though any selling in response to ratings agency S&P's downgrade of the United States is likely to be tempered by the escalating crisis in the euro zone. The S&P cut in the U.S. long-term credit rating by a notch to AA-plus is an unprecedented blow and results from concerns about the nation's budget deficits and climbing debt burden. It called the outlook "negative," signaling another downgrade is possible in the next 12 to 18 months. "The initial reaction will be a high degree of uncertainty...