And this, together with the economic disaster that is already out there, only proves the utter, utter failure of the Federal Reserve to ‘preserve the value of the dollar’, which is their freaking mission in life. Morons!

The front of a recent issue of Barron’s asks, “Are Treasury Bonds Safe?” which is actually a really stupid question since every doofus knows that Treasury bonds are perfectly safe because a fiat currency and a lapdog Federal Reserve means that they can print up all the money the Treasury needs with which to pay bondholders!

So… Safe? Hell yes they are safe! You’d think that Barron’s would know that! Jeez! If I had been there at Barron’s, I would have suggested using this week’s cover for what I actually suggested for the cover of the employee newsletter.

At the meeting, I floated the idea of suggesting a splashy cover page with words in blazing red

...

Unfortunately, while I am exactly like the Federal Reserve in that we are both total, complete failures at our jobs, mostly through sheer stupidity, the repercussions are quite different.

Jim Willie of the Hat Trick Letter notes that Bloomberg has filed a lawsuit against the Federal Reserve to force the Fed to give some details about where in the hell $700 billion went after disbursement from the TARP funds, a request and a lawsuit that the Fed is steadfastly fighting, tooth and nail.

Bloomberg.com reports it as “The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral”, which they think they are entitled to “under the U.S. Freedom of Information Act.”

The reason the Fed gives is that trade secrets are in there somehow! Mr. Willie says, “The USFed

...

Look at the economic goings-on that take place on this, the third rock from the Sun…The Dow is up again - could this be the beginning of a major rally?…pinning hopes on a stimulus package…much talk of cutting taxes, but not of cutting spending…Find a premise that is wrong, and bet against it…for gold bugs, it’s now or never…and more!

Captain’s Log: Year of our Lord 2009, 6th day…

We have landed on a strange and wonderful watery planet - the third planet in orbit around the sun, a minor star in the Milky Way galaxy. Well, they say it is watery planet. Where we are, it is icy. But the locals say it warms up and the ice melts. We’re suspicious; maybe it’s just hype to attract tourists.

But what is strange about this planet is that its inhabitants all seem to play a game of make-believe, in which they all agree

...

It seems everyone is turning against US Treasuries now. But Justice Litle says it might not be the best move. After a vicious fall at the start of the year, investors could flock back to Treasuries as the recent rally in stocks subsides. Justice says the arguments for shorting the dollar are far more convincing right now.

This from Taipan Daily:

Has the U.S. Treasury bubble popped? It’s starting to look that way.

USTs gapped higher in mid-December, traded in a quiet range til year’s end, and then immediately went into freefall with the start of the new year.

This wasn’t a total surprise. On Dec. 23rd, in a Taipan Daily piece titled “A Treasury Bond Mystery and a Currency Clue,” I gave a summation of what was happening and how to play it:

Based on

...

Responding to growing concern about the quality of the Federal Reserve System’s assets, former Federal Reserve Governor Lyle Gramley told reporters last week that “You have to reckon with the fact that one of the Fed’s assets is gold certificates, which are priced, as I remember, at US$42 an ounce, and if we were to price them at market prices, the Fed’s leverage would look a lot less than it is now.”

Humor me. Let’s crunch those numbers.

Those gold certificates have a book value of about US$14 billion, if you include special drawing rights and coin holdings ($1.7 billion). Even if you revalued this inventory, it would still total less than $300 billion, or 12% ofthe Fed’s total assets. So far, that’s a weak defense against our allegations. And it only goes downhill from there. Assuming it still got the goods at all, a lot has changed in just three months.

...

Debt prices plummet, dollar gains… U.S. stocks fall on profit-taking but rise in Europe…  Dollar at 3-week high vs euro on hopes for stimulus plan… Oil gains as Gaza fighting raises Mideast supply worries.

News about a planned U.S. stimulus package helped pull investors into the dollar on Monday but U.S. Treasury prices slumped on fears a price bubble is about to pop in the face of a massive wave of fresh debt.

European equities advanced for the fifth session in a row, spurred by gains in shares of oil companies on the back of rising crude prices. U.S. stocks were mostly lower as investors took profits on the rally that was racked up in thin trading last week.

Oil prices hit a three-week high as Israel’s deepening incursion into Gaza and a Russian gas dispute heightened fears about supplies.

Prospects for a swelling supply of government debt

...

Alex’s Notes: The term “slippery slope” has been used quite a bit when it comes to analyst commentary on what the Federal Reserve (which by the way isn’t a government institution, contrary to what many believe) has been up to lately.

A little freedom here, a little sovereignty there, and before you know it, a person might just wake up to find them self enslaved.

I am reminded of a few comments by Thomas Jefferson:

“I sincerely believe… that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” ~Letter to John Taylor, 1816

“If the American people ever allow private banks to control issue of their currency, first by inflation, then by deflation, the banks and the corporations that will grow up around them, will deprive the people of all

...

Citigroup Inc. (C) Chief Executive Officer Vikram Pandit and Chairman Winfried Bischoff will forgo 2008 bonuses after the bank lost three-quarters of its market value and got a $45 billion U.S. bailout, Pandit said in a memo to employees.

Robert E. Rubin, the former U.S. Treasury secretary who serves as an adviser to the New York-based company, declined a bonus for a second straight year, said the memo sent to Bloomberg News by Citigroup spokesman Michael Hanretta. According to Bloomberg, senior leadership committee members will get smaller awards than last year.

“The harsh realities of 2008, primarily our earnings results, mean that our bonus pool is dramatically lower,” Pandit said in the memo.

Year-end bonuses, which typically account for about two-thirds of Wall Street compensation, are being cut this year after the U.S. government rolled out a

...

PKey Newsbr•nbsp;U.K. Rescue Fails to Spur Loans (WSJ)br•nbsp;Japan's Central Bank Weighs Measures to Curb Stronger Yen (WSJ)/P PKey Reports Due (WSJ):br7:00 a.m. ICSC Chain Store Sales Index For Jan 3: Previous: -0.5%. br10:00 a.m. Nov Construction Spending: Expected: -1.2%. Previous: -1.2%. /P PbrQuotable br“How charming is divine philosophy!brNot harsh and crabbèd, as dull fools suppose,brBut musical as is Apollo’s lute,brAnd a perpetual feast of nectared sweets,brWhere no crude surfeit reigns.”/P P nbsp; John Milton/P PFX Trading – We’re Bullish on the US Dollar Today ...nbsp; and Tomorrow!/P PDo you remember what economists used to tell us about the global economy? If not, let me remind you.nbsp; /P PI remember the mantra-like chant from very clearly: There are major imbalances across the global economy.nbsp; Some countries save too much, others borrow and spend too much.nbsp; /P POf course the US seemed be the one to blame no matter the shape or weaknesses elsewhere.nbsp; The gut wrenching credit crunch of ...

Thursday January 1, 2009 Navivest

The U.S. Treasury confirmed that it had yesterday, paid out a first disbursement of $4 billion to General Motors (GM) as part of the emergency $17.4 billion emergency loan package that President Bush approved for the automakers on December 19th 2008.

Chrysler, which will also be receiving emergency aid, has not received its funds yet, however, according to a statement issued by Treasury spokesperson Brookly McLaughlin, “We’re working expeditiously with Chrysler to finalize that transaction and we remain committed to closing it on a timeline that will meet near-term funding needs.”

Ford (F) will not be receiving emergency aid, as it did not apply since it is in a slightly better position than the other two automakers. It did however ask the government to approve it for a $9 billion credit line that it would access if its financial situation took a turn

...