Morning Audibles 7.2.10 - You're Fired!

NFP day... So it's time to break to break out the popcorn...

Who knows how the BLS will manage to fanagle this one?... As for CV, this "team" is the only I'm interested in seeing get pink slips...

Well one guy (the only one with ANY shred of credibility) already packed his bags... But come on! (BTW - Is it just me, or why does that photo op look like it was snapped inside a police interrogation room? Saving money on sets? Or a harbinger of things to come?)... 


Anyway, if the man in the "E-I-E-I-O" Suite needs any help on how to do a TEAM firing, this is how it's done!

But you'd have to toss in this guy as well...

That video is, at this point, ancient history, but it's needed in this moment as we are soon likely to hear the same person tell us why the next round of spending the wealth of future generations to feed his bosses ego is so necessary at this juncture...

To bring to further along the story line, here are the same two protagonists in another encounter:

 

For all the "non-PHD's" out there, I'd like the Chairman to explain the BREAKING NEWS: caption that is on the screen at the (2:31) mark... "Fed might respond by raising rates"...

Now... Can you jive that with this story?

http://www.zerohedge.com/article/fed-marks-maiden-lane-1-multi-year-highs-even-blackrock-strips-away-60-interest-rate-blowout

Namely, that BlackRock (custodian of the Maiden Lane 1 portfolio) is actively rolling off interest rate hedges...

Jan 29 Hedges

March 31 Hedges

"As the cost to roll and retain these hedges is negligible, especially since taxpayers are paying the cost of carry, this kind of lack of fiduciary prudence is cause for alarm. Either the Fed is convinced there is no chance in hell rates will ever go higher, or it is perfectly happy to risk impairing a $28 billion portfolio from a spike in interest rates."...

Further on the subject of Maiden Lane...


On April 2, 2008, Chairman Bernanke and "then" New York Fed President Timothy Geithner told senators that the tens of billions of dollars in “assets” the government agreed to purchase in the rescue of Bear Stearns Cos. were “investment-grade.”.

Now we find that some of these, namely HG-Coll Ltd. 2007-1A, were in fact CDO's and mortgage-backed bonds & that more than $40 million already had been reduced to less than investment-grade.

The law states the Fed is not permitted to lend unsecured. To anyone. PERIOD!

Per Sections 13 and 14, the Fed also can't buy anything without a full faith and credit guarantee.

It's probably going to take a PHD to explain to people how credit default swaps qualify under that (which is, of course why you have MAIDEN LANES in the first place). The Fed set these up and then "lent money" to them to dance around The Federal Reserve Act.

Forget about the "legality" of what is being done... Let's talk about the consequences of the custodianship... If they're trying to save a few pennies by not hedging the portfolio against interest rate hikes (which, with a FED FUNDS RATE near zero would mean that even a quarter point hike would blow the portfolio to smithereens), then it basically means that rates are on hold... FOREVER... (and probably "double secret QE2" is coming soon and frankly, has ALWAYS been in the cards)...

Of course this may not be all that sinister... One could re-establish these hedges at any given moment...

But it tells you something about how these charlatans operate...

Be careful out there!