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WMARKW

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  • Fed Preview: How Big A Bazooka Does Ben Need? [View article]
    "Now, if the government wanted to pay down it's $7 debt, you would be forced to sell the security (or let it mature) for cash then remit that cash to pay that $7 tax obligation."

    But here is where I disagree. All deficits are currently held as accumulated investment in Treasuries. But that need not be the case, because just as Mosler indicates, there is NO need for the Treasury to sell debt to finance government spending. Thus that original leg of the transaction need not have been executed, nor does a similar action need to be executed to get the cash to remit existing Treasury debt. Don't forget, "We have a printing press". We could have originally financed the deficits without selling debt, thus we can redeem the debt without out raising through the debt or tax market the funds to redeem the debt.
    Jun 20, 2012. 09:04 AM | Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    That's why I advocate walking with your feet to the nearest Credit Union. "CREDIT UNIONS RULE !!!!!"
    Jun 20, 2012. 08:55 AM | 4 Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    The caveat to Holder's releasing documents is that Congress must put any further action (investigation and prosecution) to bed. Sounds like Hanky Panky Poulson's Tarp request. Just give me the money and don't ask about what will be done.
    Jun 20, 2012. 08:54 AM | 6 Likes Like |Link to Comment
  • Is Joe Sixpack's Economy Deep Into A Recession? [View article]
    UI, it's my recollection - as a beneficiary of stock option grants and exercises - that the corporation received a tax deduction as compensation for the spread between grant and exercise price and the employee received a huge tax bill for the spread as compensation. I know there are several types of stock options - qualified and non-qualified. In my case I think they were qualified. The Stock Option Plans were expressly set up to make sure that the corporation got the tax deduction.
    Jun 19, 2012. 11:51 PM | Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    And UI, Wyostocks, this "nationalistic" interest in doing what's best for the country is exactly the reason that things will not get fixed in the EU. There is no common purpose, no sense of political union yet. Interestingly in the USA, we had to form a politicial union first, before we could ever work through the monetary union issues.
    Jun 19, 2012. 11:44 PM | 2 Likes Like |Link to Comment
  • Fed Preview: How Big A Bazooka Does Ben Need? [View article]
    Please clarify what you mean by Tax Obligation. In my experience, when I used to buy Treasuries through Treasury Direct, I would deposit funds in the local FRB into my Treasury Direct account and then purchase a Treasury instrument. A maturity, the instrument would be voided and the face value would be deposited in my account. There was never any withholding for taxes.

    When a sovereign buyer (like China I assume) purchase Treasuries, I assume they go through a similar process. Treasury instruments mature routinely - many with very short maturities obviously. So there is a constant recycling. So, in effect China could opt out of Treasuries by allowing current holdings of variousl maturities to mature without replacing them. In that case, China would have funds deposited into their account at the Fed, and they could do whatever they wanted with them subsequently.

    Now the next question would be what / how does the Fed get the $ to liquidate the Chinese investment in Treasuries. Well, in my view, the answer would be that the Treasury would request a deposit to the Treasury account (digitally) and then those funds would be available to credit to China's account.

    Traditionally the Fed would then go to the open market and sell Treasury debt as a way to secure the funds to offset the digital deposit they made to the Treasury account. But what if they didn't?
    Jun 19, 2012. 11:42 PM | Likes Like |Link to Comment
  • FDIC Rule Will Return Gold To The Center Of The Banking Universe [View article]
    This change by CME is reportedly a change that customers are demanding and CME is adjusting to compete with OTC alternatives. To the extent that customers are demanding this, (and after the screw-jobs like MF Global) I think it will provide greater flexability to the investors and provide a higher level of confidence in an available alternative, for example in a large upside move, instead of cash settlement.
    Jun 19, 2012. 11:32 PM | 2 Likes Like |Link to Comment
  • Forget about QE3, says Dick Bove. Unleashing the power of the American banking system will do more to stimulate the economy than throwing cash to the wind. Removing capital and liquidity requirements for banks would get lending rolling again and stimulate activity, Bove asserts. "Lowering interest rates to zero and printing more money are not effective options."  [View news story]
    Mr. Bove.....how do you force the consumer public who is struggling with massively hammered personal balance sheets to borrow to consume? Their incomes are flat. Their equity in homes is decimated. Their expenses for routine necessities are up. And you want them to be able to borrow more. Are you brain dead?
    Jun 19, 2012. 11:23 PM | 1 Like Like |Link to Comment
  • Forget about QE3, says Dick Bove. Unleashing the power of the American banking system will do more to stimulate the economy than throwing cash to the wind. Removing capital and liquidity requirements for banks would get lending rolling again and stimulate activity, Bove asserts. "Lowering interest rates to zero and printing more money are not effective options."  [View news story]
    "Removing Capital and Liquidity requirements".

    Isn't that basically what we have now as the mark-to-markets have disappeared, and all assets are counted as "good" assets thus negating any kind or risk markdown against capital. And then have the Central Banks by the CRAP assets from the banks exchanging sovereign debt that can be counted as 100% risk free and can be deposited at the Central Bank to earn risk-free returns. WOW ! I wish I had a bank.
    Jun 19, 2012. 11:19 PM | 1 Like Like |Link to Comment
  • Fed Preview: How Big A Bazooka Does Ben Need? [View article]
    Freddy,
    I don't mean to come across as cocky. I simply am possessed of this opinion with lots of thought behind it that touches a lot of different elements of the equation. I am happy to learn about something that may change my viewpoint. I am just a logic driven guy and I don't understand what any investor would do differently if given cash vs. Treasury instruments. They are by definition "investors". They don't want to spend, if so they could do it already. They will look for an alternative if they want to hold that type investment. Government bonds, corporate bonds, State, etc, etc.
    Jun 19, 2012. 06:54 PM | Likes Like |Link to Comment
  • Fed Preview: How Big A Bazooka Does Ben Need? [View article]
    Freddy,
    Every holder of US Treasuries already has a claim on USD. In fact, they had to exchange USD for Treasuries in the first place. They have an account at the Fed and they just switch back and forth between USD balances and Treasury balances. Any day of the week they can make a determination to liquidate UST for USD. The fact of the matter is they "don't" want to spend USD, otherwise they already would have.

    Maybe they'll invest in CD's at Bank of America, or CITI or HSBC, etc.
    Jun 19, 2012. 06:46 PM | Likes Like |Link to Comment
  • Henry Paulson says the U.S. will muddle through the European debt crisis relatively unscathed "with growth that really isn't enough to make a dent in employment." About the next financial crisis, regulation isn't the answer, he says: It will never be enough "because unless you think the banks are trying to blow themselves up, you’re never going to uncover all the problems in advance."  [View news story]
    Not a banker on the Wiki list: (interesting some of the Pardons)

    Philip Vigol and John Mitchell, convicted of treason and sentenced to hanging; pardoned by George Washington; see Whiskey Rebellion.

    Governor Thomas Dorr 1844, convicted of treason against the state of Rhode Island; see Dorr Rebellion; released in 1845; civil rights restored in 1851; verdict annulled in 1854.

    John Brown, convicted of treason against the Commonwealth of Virginia in 1859 and executed for attempting to organize armed resistance to slavery.

    Aaron Dwight Stevens, took part in John Brown's raid and was executed in 1860 for treason against Virginia.

    William Bruce Mumford, convicted of treason and hanged in 1862 for tearing down a United States flag during the American Civil War.

    Mary Surratt, Lewis Powell, David Herold, and George Atzerodt, all hanged on July 7, 1865 for treason and conspiracy for the Lincoln assassination and conspiracy - by military tribunal.

    Iva Toguri D'Aquino, who is frequently identified with "Tokyo Rose" convicted 1949. Subsequently pardoned by President Gerald Ford.

    Herbert Hans Haupt, German-born naturalized U.S. citizen, was convicted of treason in 1942 and executed after being named as a German spy by fellow German spies defecting to the United States.

    Martin James Monti, United States Army Air Force pilot, convicted of treason for defecting to the Waffen SS in 1944.

    Robert Henry Best, convicted of treason on April 16, 1948 and served a life sentence.

    Mildred Gillars, also known as "Axis Sally", convicted of treason on March 8, 1949; served 12 years of a 10- to 30-year prison sentence.

    Tomoya Kawakita, sentenced to death for treason in 1952, but eventually released by President John F. Kennedy to be deported to Japan.

    Adam Yahiye Gadahn has been indicted for treason as of 2012, but has not been brought to trial as he remains at large.
    Jun 19, 2012. 06:37 PM | Likes Like |Link to Comment
  • Fed Preview: How Big A Bazooka Does Ben Need? [View article]
    How's that work Freddy? Is the SS Trust Fund going to go out and buy oil futures, or consume oil, or what? What changes for the OPEC countries taking $$ for oil. Who will they compete with in spending those dollars? Will the Chinese spend their $1.15 trillion they have invested in US Debt? What will they spend it on - consumption? If so, what happens to the dollar? Will they stop making stuff to sell to the US? You mean they might actually raise prices and make the US more competitive? What will the other foreign holders of USD do? Will they sell $$ after they have had their Treasuries cashed in, or will they keep them in reserves? Who will consume to drive inflation? Yea, maybe there will be some inflation in financial assets. Maybe holders will be forced to buy Japanese debt, and finally the Japanese will witness a little inflation? Maybe holders will decide to invest in EU sovereign debt?
    Jun 19, 2012. 06:29 PM | Likes Like |Link to Comment
  • Henry Paulson says the U.S. will muddle through the European debt crisis relatively unscathed "with growth that really isn't enough to make a dent in employment." About the next financial crisis, regulation isn't the answer, he says: It will never be enough "because unless you think the banks are trying to blow themselves up, you’re never going to uncover all the problems in advance."  [View news story]
    Thanks Henry. I think it's time for you to retire to the Cayman Islands with your yacht.

    "Paulson told executives during the Biotechnology Industry Organization conference. “The monetary union isn’t sustainable unless you forge something that is more like a political union. That’s much more different. You’ve got 17 different countries over there.”

    The Monetary Union was the pre-cursor. It was a stepping stone from day one that was designed to create the "crisis" need for the political union. The EU was always about political union.
    Jun 19, 2012. 06:19 PM | 2 Likes Like |Link to Comment
  • Fed Preview: How Big A Bazooka Does Ben Need? [View article]
    With all due respect Freddy, I ONLY WISH there were a way to mitigate the dysfunction in Washington.
    Jun 19, 2012. 05:59 PM | Likes Like |Link to Comment
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