me above and transposed “If your in the Down camp …. we print more money and Zimbabwe here we come .. and wealth gets redistributed away from SAVED #s in accounts AND stuff get more expensive in an attempt to hold on to whats been worked for” … trying to fall asleep I was wondering what is holding UST rates down .. the buyers .. why .. printing money .. stop printing money and we see rates go up and Now owe more in interest .. keep printing money and basically the same thing happens – but a different set of players are held over to a new day to deal

but China why not stop buying? .. would see higher rates on their Savings when they turn in the mature bonds for new ones .. the UST is sure to need again .. but would some kind of airport briefcase bond deal need to done because the banks are not buying yours now .. nano rfid to the rescue (for real holdable certificates) .. so the answer is keep playing by the rules of etiquette all the while hoping your opponent will also

When relative demand for bonds is strong, buyers bid up prices, pushing down yields. This is what happened last fall during the “flight to quality,” when yields fell to historic lows. If a major holder were to flood the market with supply, however, yields would rise dramatically, and prices would plummet. It would be impossible for them to quickly unload their holdings without realizing a huge loss.

Bruce N Tennessee Says: at 1:48 pm
Thor: The other posters are correct…and rates should continue to go up with either option…if the Chinese stop buying OR if they stop buying and start actively selling.

I caught those statements and am deducing that senario a bit further .. slam me if I’m off base …

1st – Central Banks suffer no penalty for early withdrawl? I suppose but why not? If you meant they sell to some other entity than I suppose the barter would go down like a derivative (me to you at a deal price)

2nd – China sells to the UST with or without penalty at the accrued interest to date. They can now buy new treasury bonds at the new interest rate with a new date for maturity. UST guarantees new rates at the new date.

Now we’re still in the China selling UST in mass because they are mad and say f’it. What do you think UST rates go Down or Up? … Down because nobody else wants them either? Or Up because the great buyer China is dropping out of the picture and the broke UST needs casholla now?

If your in the Down camp …. ummm we print more money and Zimbabwe here we come .. and wealth gets redistributed away from cashed #s in accounts?
If your in the Up camp then China compounds its earning by trading up in UST interest rates as well as everyone else who is holding UST .. but the US Worker / Taxpayer is enslaved all the more to future interest payments to the banksters of the world over

Balanced budgets were so yesterday. I’m for tripping on the table leg and upsetting the monopoly board. Thats not stealing is it? Or maybe something else?

U.S. Considers Remaking Mortgage Giants
‘Bad Bank’ Would Wipe Slate Clean for Fannie Mae, Freddie Mac by Taking Their Toxic Loans[/size]

By Zachary A. Goldfarb and David Cho[/b]
Washington Post Staff Writers
Thursday, August 6, 2009

The Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home-loan market, government officials said.

The bad debts the firms own would be placed in new government financial institutions — so-called bad banks — that would take responsibility for collecting as much of the outstanding balance as possible. What would be left would be two healthy financial companies with a clean slate.

The moves would represent one of the most dramatic reorderings of the badly shattered housing finance system since District-based Fannie Mae was created by Congress to support mortgage lending during the Great Depression. Both Fannie Mae and Freddie Mac, based in McLean, have government charters to buy home loans from banks, which they then repackage and sell to investors. The banks can then use the proceeds to offer more loans to home buyers.

Looks like a reorganization of Fannie Mae & Freddie Mac is now in the works. LMAO.

The thing is whatever needs to happen doesn’t need to happen here. Another country defaults, CIT decides to file, another rogue trader (aka Soc Gen), etc. Something insignificant becomes significant.

“I do know that with the auctions coming up they have to get traders out of equities and into treasuries. Because a failed auction would have the 10 year on its way to 5% (or more) in a hurry and the dollar searching for a place to land (after freefall).”

—

I know that LOGIC doesn’t count for much these days, but at least it “feels” to me that exactly that is being calibrated to happen…

I mean, even if you believe in a CONSPIRACY THEORY, what better scenario could occur?

Let’s say GS & JPM are in charge of ‘engineering’ this walkover…They position themselves properly and then pull the floor out under equities…Move over to govvies & the dollar for a bit…

- They save the auction
- People who ONLY focus on equities, get off their jock for fluffing the market
- and all the positive things from my previous post occur

It’s TOO OBVIOUS to me…That’s probably why it won’t happen…

The dollar has to get to 78.88 to reverse (a 1.7% increase) on the daily TLB. That will hold up unless we make a new low (which changes the reversal to 78.29). So what has to happen to get a 1.7% fear move? I don’t know. I do know that with the auctions coming up they have to get traders out of equities and into treasuries. Because a failed auction would have the 10 year on its way to 5% (or more) in a hurry and the dollar searching for a place to land (after freefall).

I’m still in the camp that the dollar is making a five wave down soon to be supported (after a final quick move down)…

I mean, think of the alternatives…

1. You just say SCREW THE DOLLAR (let it collapse)

POSITIVE
- That may help our equity market keep getting pumped to the moon but people are already starting to see thru it)
NEGATIVE
- If the 10 year keeps creeping towards 4%, housing re-fi’s will vaporize, and many more will default (I don’t think the banks, the Fed, or the administration want that)
- Europe will be pissed and cry foul
- Oil prices will continue to soar
- Import prices will start to crowd out other things on the CPI
- China will be pissed it’s Treasury holdings lose value
- Nominate you own here, I’m thinking off the top of my dome

2. You manufacture a move back to the dollar & Treasuries for awhile (perhaps ’till year end)

POSITIVE
- the 10 year note stays in check (re-fi’s are still manageable)
- China DOESN’T get pissed, and chips in on our 10 and 30 auctions next week
- The Euro pulls back, giving relief to business over there
- Oil prices pull back (relief to consumer)
- Money Managers can exist the scary equity rally for awhile, and cruise thru year end with a few more stable basis points of profit by buying low.

NEGATIVE
- The stock market corrects, so what?…Joe & Jane speculator get crushed…They deserve to buying equities at these valuations…

What’s the problem here?

It hasn’t been able to break the weekly downtrend since the reversal in March.