RON PAUL & DYLAN RATIGAN: CANCELLING DEBT HELD BY THE FED
by ilene - July 29th, 2011 6:41 pm
Courtesy of The Daily Bail
Video – Dr. Paul with Dylan Ratigan – Is Debt Cancellation An Option? – July 13, 2011
Ron Paul shares his thoughts on Congress cancelling the $1.6 trillion in Treasury bonds owned (accumulated during QE1 and QE2) by the Federal Reserve as a one-time event to alleviate the time constraint of the August deadline for debt ceiling negotiations.
Paul has been floating this idea for the last several weeks, though it has yet to gain much traction. Interesting discussion. More below including news that Paul has has raised more 2012 campaign donations from active-duty military personnel than all other GOP candidates combined.
A few recent links:
Ron Paul gets HUGE endorsement ahead of crucial Iowa contest – CNN
Ron Paul Wins NH Straw Poll, Obliterates Mitt Romney
Ron Paul’s First Official Campaign Video For 2012
Dr. Thomas Woods Explains Why Ron Paul Is The BEST Candidate For President In 2012
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Video – Ron Paul has raised more 2012 campaign donations from active-duty military personnel than all other GOP candidates combined.
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- CHART: U.S. Debt To GDP 1940-2015
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- Bernie Sanders: The Top Ten U.S. Corporate Tax Avoiders
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- 60 Minutes: New Corporate Tax Havens
- VIDEO: Paul Ryan Booed At Wisconsin Town Hall For Defending Tax Breaks For The Wealthy
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- Bankrupting America: History Of The U.S. Debt Ceiling
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DiggTreasury Yields in Perspective
by Chart School - July 29th, 2011 6:35 pm
Courtesy of Doug Short.
Quick take: Since the end of QE2, the yield on the 10-year note has dropped 36 basis points to 2.82%. The most recent Consumer Price Index (the July reading for June) stands at 3.56%, which gives us a real 10-year yield of -0.72%.
Let’s have a look at a long-term perspective on Treasury yields. The chart below shows the 10-Year Constant Maturity yield since 1962 along with the Federal Funds Rate (FFR) and inflation. The range has been astonishing. The stagflation that set in after the 1973 Oil Embargo was finally ended after Paul Volcker raised the FFR to 20.06%.
Now let’s overlay the S&P 500 to see historical pattern of equities versus treasuries. This is a nominal chart, which significantly distorted the real value of both yields and equity prices.
Here’s the same chart with the S&P 500 adjusted for inflation and the annualized inflation rate subtracted from the yields. The impact of stagflation becomes much clearer. We can better understand the severity of the decline in equities from the mid-1960s to the bottom in 1982. And we can also see why high yields can be deceptive in periods of double-digit inflation.
The most interesting series in the charts is the FFR red line. We can see how the Fed has used rate to control inflation, accelerate growth and, when needed, apply the brakes. Unfortunately, the FFR has been virtually zero since December 2008, so it is no longer available as a tool to stimulate the economy. Incidentally, I annotated the top chart with the tenures of the last three Fed chairmen so we can see who was managing the various FFR cycles since the summer of 1979.
The next chart is based on daily data and adds some additional Treasuries for a close look at yields since 2007.
I update the long-term charts each weekend and the last chart more frequently, depending on yield volatility.
Boehner Deficit Plan Passes: Here Is What Happens Next
by Zero Hedge - July 29th, 2011 6:20 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
As expected, the revised revised Boehner plan has passed the Congress garnering the required 216 votes to be successful (218-210 to be precise). And now that the ball is in the Senate’s court, here is was happens over the next 3 days…
Via Nancy Vanden Houten of Stone McCarthy.
Majority Leader Reid today set the wheels in motion for the Senate to begin consideration of the House bill, assuming it passes, or his own debt ceiling/deficit reduction plan.
Our understanding of the procedures in the Senate is pretty basic, but the bottom line seems to be that the soonest we would see any meaningful vote in the Senate would be shortly after midnight on Saturday (i.e. early Sunday morning.) It’s not clear to us whether that initial vote would be on some version of the House bill, Reid’s original proposal, or Reid’s proposal modified based on recommendations from Minority Leader McConnell. Without Republican input on the legislation, the odds of filibuster go up. People with more knowledge of the workings of the Senate than we have are looking for another procedural vote on Monday morning, and a final vote on some piece of legislation on Tuesday (August 2.)
Putting the logistics of the Senate aside, Reid is going to have to make some adjustments to his bill to get enough Republican support so that Republicans don’t block legislation through filibusters or other tactics.
Assuming Reid can get the Senate to pass some piece of legislation, some compromise will still have to be worked out with the House. If Speaker Boehner wants to be part of a compromise that prevents default, he’s going to have to shift gears in a major way. In the last couple of days, he’s been working overtime to get support for his bill from members of his own party. If he wants to push through compromise legislation, he’s going to have to court some Democrats, because he’ll surely lose Republican votes on any compromise with Democrats.
As we noted in our comment Monday, the original Boehner and Reid plans had enough in common to suggest grounds for compromise.
The biggest stumbling block will continue to be the House bill’s provision that calls for the debt limit to be increased in two steps, with the first increase only lasting through…
Former Bondi Foreclosure Fraud Investigators June Clarkson & Theresa Edwards Live on Air WDJA 1420AM Saturday from 8-10 am EDT
by Zero Hedge - July 29th, 2011 5:13 pm
Courtesy of ZeroHedge. View original post here.
Submitted by 4closureFraud.
Citizen Warriors | Foreclosure Fraud Special w/ June Clarkson & Theresa Edwards – Radio Show Saturday from 8-10 am EDT with 4closureFraud.org and ForeclosureHamlet.org
We will be hosting our radio show tomorrow on WDJA 1420 from 8-10 am EDT.
We are going to have some interesting updates and discuss topics emerging from the Pam Bondi scandal related to the firing of the nations two top fraudclosure investigators.
This show will be hosted by Lisa Epstein and myself, Michael Redman.
(Carol is out of town but may call in)
Special Guests: Former Assistant Attorneys General & Foreclosure Fraud Investigators June Clarkson & Theresa Edwards!
Yes, that’s right! June Clarkson & Theresa Edwards, formally know as Pam Bondi’s Top Assistant Attorneys General Foreclosure Fraud Investigators.
This is going to be our best show yet. We will be face to face with June and Theresa discussing their firings , their work at the AG’s office and what they plan on doing moving forward.
So tune in if you are local in Palm Beach county or join us on the web at http://www.jammin1420.com/ and click on the listen now button in the top right corner.
Again, the show is Saturday, tomorrow from 8-10AM so spread the word.
This is a show that you do not want to miss, but if you do, you will be able to catch the replay by clicking on the radio stream tab @ 4closureFraud.org
We will also be uploading a podcast of the show for the the world to download.
If you have any questions that you would like us to ask the ousted Fraudclosure Investigators, post them in the comments below. Can’t guarantee we will get to them but will do our best. There is so much to cover.
You can also log into ForeclosureHamlet.org and ask your questions live while we are broadcasting.
Email address is citizenwarriors@gmail.com
Previous shows can be viewed here…
Sign the petition calling for an investigation of Attorney General Bondi’s actions:
http://www.progressflorida.org/bondi
www.4closureFraud.org
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UNFAIR, DECEPTIVE AND UNCONSCIONABLE ACTS IN FORECLOSURE CASES
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Moody’s Releases Statement On Potential Outomes In US AAA Review
by Zero Hedge - July 29th, 2011 4:58 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Just out from Moody’s
Potential Outcomes in Review of US Aaa Rating
Summary
The prolonged debt ceiling deliberations have increased the possibility of a rating change or outlook change, or both for the United States government’s Aaa government bond rating. Nevertheless, it remains our expectation that the government will continue with timely debt service, and that our review for downgrade will more likely than not conclude with a confirmation of the Aaa rating, albeit with a shift to a negative outlook. However, if there were a default on a Treasury debt obligation, a downgrade would likely follow, even if the default were swiftly cured and investors suffered no permanent losses.
Announced July 13, our review was undertaken because of the small-but-rising probability that the Treasury would default on its market debt sometime after August 2 if the ceiling was not raised. The review will conclude when the debt limit is extended for more than a short period of time. Even a short-lived debt default, however, will likely prompt a downgrade. For Moody’s, a debt default occurs only when an interest or principal payment on a Treasury security is missed, and does not arise when payment are delayed on other obligations such as federal employee salaries, Social Security, or vender bills.
If the debt limit is not raised before August 2, we believe that the Treasury would give priority to debt service payments and could thus postpone a potential debt default for a number of days. Revenues would be more than adequate for some period of time to meet those payments, although other outlays would be severely reduced as a result.
As to the longer-term outlook on the rating, the limited magnitude of current deficit reduction proposals suggest that even a timely increase in the debt ceiling will lead to the assignment of a negative outlook on the rating. The direction of the US government’s debt rating will largely be determined over time by our projections of its deficits and stock of debt, but the focus of our current review for downgrade is the more narrow and more immediate “event risk” associated with a possible debt-ceiling-induced default and the precedent that such a default would carry. We will make an assessment of the government’s efforts to stabilize the future path of its debt…
Current Market Snapshot: S&P 500 Down 3.92% for the Week
by Chart School - July 29th, 2011 4:35 pm
Courtesy of Doug Short.
The S&P 500 lost 0.65% for the day to close the week down a dispiriting 3.92%. The intraday low shortly after the open actually took the index below its 200-day moving average, but it closed about 7 points above this benchmark level. The index is now up 2.75% year-to-date and 5.23% below the interim high set on April 29.
From an intermediate perspective, the index is 91.0% above the March 2009 closing low and 17.4% below the nominal all-time high of October 2007.
Below are two charts of the index, with and without the 50 and 200-day moving averages.
For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.
For a bit of international flavor, here’s a chart series that includes an overlay of the S&P 500, the Dow Crash of 1929 and Great Depression, and the so-called L-shaped “recovery” of the Nikkei 225. I update these weekly.
These charts are not intended as a forecast but rather as a way to study the current market in relation to historic market cycles.
Treasury Cash Drops By $15 Billion Overnight, At $51.6 Billion; $5 Billion In SFP Bills Roll Off
by Zero Hedge - July 29th, 2011 4:19 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Two weeks ago Zero Hedge first presented the comparison of the Treasury cash balance to cash equivalents held by global public companies (a meme that has since propagated in a very dumbed down and unattributed fashion). Here is the update. As of last night, the US Treasury had just $51.3 billion in Federal Resere cash, and furthermore, Tim Geithner let the $5 billion in residual CMBs under the Fed’s Supplementary Financing Program mature without rolling. In other words, the Treasury just burned $15 billion, or $20 billion when accounting for the CMB roll off, overnight. At this burn rate there is precisely 3 days or so of cash, although this naturally does not include the bulk payment due to SSTN discussed previously. It is now officially time to panic, although those who so wish, can put their money in not just Apple ($76.2 billion), but GE ($136.4 billion) and Microsoft ($62.4 billion) all of which have more cash than Tim Geithner. Of course, as Gartman put it, in three days everyone will have more cash than the US Treasury. Incidentally, someone may wish to inform the irrelevant data chasers that a far better comparison is that of the US Treasury not to companies that have X cash, but to those that have a $15 billion cash burn per day.
And a history of Treasury cash:
Massive Short Squeeze, Flight To Safety Pushes 10 Year Yield To 2011 Low 2.77%
by Zero Hedge - July 29th, 2011 3:40 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
The unprecedented moves in the yield curve continue: even as the blow out in (ultra) short term liquidity persists, notably in GC and in Bills maturing just after the August 2 D-Day, the scramble to cover long-dated shorts has collapsed the 10 and the 30 Year by an epic amount in the last few days, with the 10 Year trading at 2011 lows of 2011. Why is this number relevant? Because the last time we saw it was in August 2010, a few weeks before Ben Bernanke announced QE2. In other words, history is repeating itself verbatim from last year. As to whether the move is due more to a flight to safety or a short covering crunch we will know only next week when the CFTC releases its latest COT spec short data. One thing can be ascertained, however: the Fed models that look at rate-implied deflation indicators are currently screaming bloody QE. And it will come… As soon as the stock market finally realizes that it has to tumble before it surges to new and Weimerian highs. In other news, keep an eye out on the USDJPY: we may see a flush there any second.
10 Year:
30 Year
Visualizing GDP: The Consumer Is Key…and at the Razor’s Edge
by Chart School - July 29th, 2011 3:35 pm
Courtesy of Doug Short.
The chart below is my way to visualize real GDP change since 2007. I’ve used a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself.
My data source for this chart is the Excel file accompanying the BEA’s latest GDP news release (see the links in the right column). Specifically, I used Table 2: Contributions to Percent Change in Real Gross Domestic Product.
Here is the previous version of the chart — through Q1 and pior to the July 2011 annual revisions.
Over this time frame, we see that the personal consumption expenditures component has shown the most consistent correlation with real GDP itself. When PCE has been positive, GDP has been positive, and vice versa. As the Q2 GDP component analysis clearly illustrates, personal consumption, at 0.07 of the real GDP 1.29, is at the razor edge of positive territory.
Landec Corporation Executive Officer Adopts Rule 10b5-1 Trading Plan
by Insider Scoop - July 29th, 2011 3:31 pm
Courtesy of Benzinga.
Landec Corporation (Nasdaq:LNDC) today announced that its Chairman and CEO, Gary Steele, age 62, has adopted a pre-arranged stock trading plan to sell a portion of his Landec common stock over time as part of an individual long-term strategy for asset divThe stock trading plan was adopted in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934 and Landec’s policies regarding stock transactions.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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