Thursday, April 22, 2010

Obama Slams Wall Street, but What About His Own Government?

He has the audacity to criticize and vilify Wall Street, while his government continues to issue a tremendous amount of debt securities that get dumped on the entire world, further burdening the US taxpayers whom he claims he is helping.

I was just incensed to read this article ("Obama slams Wall Street ways while asking for support", 4/22/2010 AP via Yahoo Finance). Instead of counter-argument (the article has raised my blood pressure too much), I will reproduce my blog entry. To me, this is far more obscene than Wall Street supposedly bilking billions from investors. This guy (and his government) is bilking $500 to $700 billion every single month (or literally creating that money out of thin air, if you prefer), while still blaming his predecessor. Next week is another "selling a boatload of notes and bonds" week, which happens twice a month.

The US government issues debts for its ever-increasing new spendings, whether it's a new offensive in Afghanistan or new bureaucracy at some agencies and departments , and to retire old debts. Instead of paying the creditors back, it issues them the new debts. To the tune of hundreds of billions of dollars every month. It is a ponzi scheme, but since it's the government doing it, no one is behind bars.

So here's the entry on Treasury Auction Watch. Total amount for the week, including short-term bills, will probably exceed $200 billion, as the current total does not include 4-week bill and possibly another CMB for the Federal Reserve.

CMB stands for cash management bill, and SOMA stands for System Open Market Account at the Federal Reserve New York. SFP stands for Supplementary Financing Program created in September 17, 2008 (the day ) to give money to the Federal Reserve to do whatever the Fed thinks necessary to support whatever market (we don't know how they have spent their money):

The US Treasury Department will auction the following Treasury securities for the week of April 26, 2010.

Monday April 26, 2010

  • 13-week bill: $24 billion (drop of $1 billion from this week)
  • 26-week bill: $25 billion (same as this week)
  • 5-year TIPS: $11 billion (issued once a year, with reopening in 6 months)
Tuesday April 27, 2010
  • 4-week bill: TBD ($18 billion this week)
  • 2-year note: $44 billion (same as last month)
Wednesday April 28, 2010
  • 56-day CMB*: not scheduled yet (under SFP* to be used solely by the Federal Reserve; if there's an auction for this security, it will be the 10th straight week of issuing CMB under SFP)
  • 5-year note: $42 billion (same as last month)
Thursday April 29, 2010
  • 7-year note: $32 billion (same as last month)
Total for the week: $178 billion
  • Bills: $ 49 billion (excluding 4-week bill, CMB)
  • Notes and bonds: $129 billion
Total for April 2010 so far: $434 billion
  • Bills: $360 billion
  • Notes and bonds: $74 billion
Additional Purchase by SOMA for April 2010 so far: $21.432 billion
  • Bills: $16.01 billion
  • Notes and bonds: $5.422 billion


Post a Comment