Tag Archives: AOFM

Labor’s Building the Australia Devolution

21 May

Labor’s  “Building the Australia Devolution” continues.

Three weeks ago – $2.2bn more debt.

Two weeks ago – $2.4bn more debt.

Last week – $2.75bn more debt.

Next week – $2.5bn more debt.

Labor seem determined to shatter the glass of their newly revised $250 Billion debt ceiling.  At this pace, possibly by around the 3rd week of August.

That’s just after Aug 2nd, when the US Treasury reckons the US could default on its debts.

How Australia Will Look When The SHTF

15 May

Want a glimpse of Australia’s future?

Watch this shocking story from America’s 60 Minutes:

http://www.youtube.com/watch?v=QwrO6jhtC5E

Pretty distressing, right?

It was exotic “mortgage-backed investments” that triggered the GFC in America. And as you just saw, they are still very much at the heart of their terrible ongoing crisis, where 1 in 7 (44 million) are now living on food stamps.

Just as in the USA and other countries, our Labor government responded to the GFC by “stimulus”.  And, by propping up our “safe as houses” bankstering system.

This is the same “best in the world” bankstering system that has just $2.67 Billion in On-Balance Sheet Assets, versus $15 TRILLION in Off-Balance Sheet “business”.  The bulk of that off-the-books “business” is exotic “derivatives” bets on interest rates, and foreign exchange rates.

How exactly did Labor prop up our bankstering system?

Amongst other things, by using taxpayer’s money to “invest” billions in … yep, Residential Mortgage-Backed Securities (RMBS).

$16 Billion, to be precise.

But $16 Billion wasn’t enough. Just last month, Wayne Swan authorised the AOFM to “invest” another $4 Billion in these “mortgage backed investments”:

Click to enlarge

According to numerous sources including The Economist magazine, Australia has the most overvalued housing in the world.

And earlier this month, we learned that house prices fell by the most in 12 years in the March quarter.

That $20 Billion pumped into Residential Mortgage-Backed Securities is not looking such a great “investment” now, ‘eh Wayne.

Let there be no mistake.

Rudd/Gillard Labor did not “save us” from the GFC.

They simply kicked the can down the road a couple of years.

And in doing so, all they have achieved is to dramatically weaken our government’s financial position.

Nearly $200 Billion in gross debt.

$20 Billion in “mortgage-backed investments”.

A $50 Billion budget deficit – that’s for this year alone.

A $50 Billion increase in our national debt ceiling, to $250 Billion.

And borrowing more than $2 Billion a week.

But look on the bright side.

When GFC 2.0 strikes, we’ll not need to worry about what’s hitting the fan.

Because thanks to Labor … and the banksters … we’re already in the ____ right up to our necks.

Barnaby is right.

UPDATE:

For more shocking revelations on this story of bankstering corruption of the mortgage finance markets – and now even the courts of law – see this exposé by Rolling Stone’s Matt Taibbi:

The foreclosure lawyers down in Jacksonville had warned me, but I was skeptical. They told me the state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This “rocket docket,” as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and laby­rinthine derivative deals of a type that didn’t even exist when most of them were active members of the bench. Their stated mission isn’t to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history …

And if you missed it, check out Matt’s infamous exposé of one of the big banks at the heart of the ongoing mega-fraud, Goldman Sachs:

The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates …

What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy

Goldman Sachs is the puppeteer of our very own Emissions Trading Scheme leading proponent, former GS Australia chairman Malcolm Turnbull MP.

Labor’s BAD: Getting Worse Every Week

14 May

Labor’s  “Building the Australia Devolution” continues apace.

Two weeks ago – $2.2bn more debt.

Last week – $2.4bn more debt.

Next week – $2.75bn more debt.

At this pace, they could shatter the glass of their newly revised $250 Billion debt ceiling by around the 3rd week of August.

That’s about a fortnight after Aug 2nd, when the US Treasury reckons the US could default on its debts.

Labor’s $2.4 Billion Budget Spray

6 May

Thought $2.2 billion more debt this week was impressive?

The Labor party’s just getting started.

The AOFM has just announced next week’s Australian sovereign debt auctions.

A $600 million T-bond auction on Wednesday – to celebrate the myth-making record-deficit Budget Speech the night before, no doubt.

$1.2 billion (2 x $600 million) in T-note auctions on Thursday.

And another $600 million T-bond auction on Friday.

Labor’s $2.4 Billion Budget Spray.

How much more Interest-on-debt must we pay?

And how much will the “Estimates” and “Projections” for Interest-on-debt made in last year’s Budget be .. revised .. in this year’s Budget?

MYEFO 2010-11, Appendix B, Note 10: Interest Expense

According to their own “Estimate” just for this year 2010-11, we’re paying $1,201,712 ($1.2 million) per hour in Interest-on-debt.

Another $2.2bn In Debt This Week

5 May

Yesterday, the AOFM auctioned another $600 million in Treasury Bonds. Lumping the taxpayer with a (weighted-average) interest-burden of 5.35%.

Today, the AOFM will auction another $1 Billion in Treasury Notes.

Tomorrow, the AOFM will auction another $600 million in Treasury Bonds.

How much will this week’s national credit card binge add to last year’s “Estimates” and “Projections” of Interest-on-debt?

MYEFO 2010-11, Appendix B, Note 10: Interest Expense

According to their own “Estimate” just for this year 2010-11, we’re paying $1,201,712 per hour in Interest-on-debt.

UPDATE:

Today’s $1 Billion Treasury Notes auction completed.

Slug to taxpayers? 4.73% interest rate (weighted average yield).

How Gillard’s Use Of The Credit Card Makes Rudd’s GFC Spending Spree Look A Model Of Financial Prudence

5 May

A few days ago I wrote an article titled “The Real Reason Why Gillard’s A Spinster“.  It ruffled feathers.  Not for the intended reason, unfortunately.

Humourless critics were so rankled by my [insert self-righteous PC perjorative] that they did not see the point.

So here’s a follow up.  Without the creative literary device/s for decoration.

The following chart is an updated and extended version of the one used in the previous article.  This shows Treasury Note auctions from 2000 through to end April 2011 (the previous chart began at March 2009).

The other difference, is that the previous chart listed each individual auction separately.  It escaped my notice that there has been as many as 3 auctions p.w. in recent times.  So this new chart sums the total of all auctions of Treasury Notes in a given week into a single bar on the chart (click to enlarge):

Source: Australian Office of Financial Management (AOFM)

Some key points to note.

Firstly, there’s clearly quite a difference between how much the Howard Government relied on short-term debt (Treasury Notes), compared with the subsequent Labor Government.  The period when the largest block of Howard-era short term debt auctions occurred was through the year 2002 – coinciding with the 2002-03 global recession, which Australia largely avoided.

Secondly, for four (4) full years between October 2003 and the Rudd election win in November 2007, the Howard Government raised no short-term debt. Not one cent.

Neither did Kevin07.  For 16 months.  Until the GFC.

Thirdly, you can see clearly the period from March 2009 through around September 2009, during which the Rudd Government was regularly raising around $800m to $1,500m a week from short-term debt auctions. I assume that this reflects (at least in part) the government’s urgent need for cash to fund their “stimulus” response to the GFC.  Stimulus 1 – $10.4 billion in cash handouts in late 2008 (goodbye 50% of Howard surplus).  Stimulus 2 – another $42 billion in cash handouts and “nation-building”, beginning in … February/March 2009.

You remember. “Swift and decisive”. Rushed and bungled. $900 cheques to dead people. Electrifying foil insulation. Blazing pink batts. Rorted “green” schemes. Overpriced school halls. Literally billions more, to investigate and repair these Rudd-made disasters.

Finally, note the significant jump in both the frequency and the totals of short-term debt auctions, coinciding exactly with Ms Gillard’s rise to power. The fact is, she has presided over a $10.1bn (31.5%) increase in issuances of short-term debt in just 10 months, compared to the previous 12 months of the Rudd Government.

The big unanswered question that I have is this: WHY would a Gillard-led government suddenly need to bash the nation’s short-term credit card 31.5% harder than even the profligate Kevin Rudd did? After all, he had a GFC “stimulus” package or two to finance.

What is Ms Gillard’s excuse?

According to the government’s own budget records, we-the-taxpayers are already wearing an Interest-on-debt bill of more than $10 Billion per year:

MYEFO 2010-11, Appendix B, Note 10: Interest Expense

According to the AOFM, short-term Treasury debt is supposed to be used for financing “within-year”, daily cashflow requirements of the Government. And then there’s this official prediction:

Treasury Notes are not expected to make a major contribution to overall funding for the 2010-11 financial year as a whole.

Why has the Gillard-led government apparently been so incapable of planning their week-to-week expenses, that since that statement was published they have resorted to bashing the national credit card more than 31.5% harder than Kevin Rudd “needed” to?

The data supports the increasingly widespread view that the Gillard minority government is a shambles.  They have no financial plan – even over the short-term.  And so, from Day 1, have had to pull out the national credit card 31.5% more than Kevin Rudd, just to manage the week-to-week cashflow requirements of government.

One can only wonder just how much Interest-on-debt we will end up paying in total over the coming years.

While Gillard and Co comfortably retire.  On mega-buck, index-linked, taxpayer-funded pensions.

The Real Reason Why Gillard’s A Spinster

1 May

Why is Julia Gillard really an unmarried, childless, career politician spinster?

The answer may surprise you.

Take a look at the following chart, showing Commonwealth Treasury Note auctions from March 2009 through this past Friday (click to enlarge):

Source: Australian Office of Financial Management (AOFM)

Since Ms Gillard took over the nation’s top job, the size of weekly Treasury Note auctions has jumped dramatically.  Under Gillard, the government has auctioned $46.7 billion worth of Treasury Notes in just 10 months.  By contrast, the Fairy Ruddfather sprinkled $50.2 billion in the preceding 15 months, before Gillard banished him to the spare bedroom:

Now, it’s important to understand the special significance of Treasury Notes.  According to the Australian Office of Financial Management (AOFM):

Treasury Notes are short-term debt securities used primarily to meet within-year funding flows. Issuance decisions are made weekly and depend on the Government’s projected daily cash position for the weeks ahead.

Then there’s this:

Treasury Notes are not expected to make a major contribution to overall funding for the 2010-11 financial year as a whole.

Right. With 2 months to go, she’s already auctioned $11.1 billion (31.5%) more in Treasury Notes than the Fairy Ruddfather did in the previous financial year.

Conclusion?

Clearly, a Gillard-led government is incapable of managing the weekly cashflow.  The kitchen’s closed, the children are running amok, the House is a shambles, and the budget is out of control, ever since she took over the purse-strings.

Which explains once and for all, why she’s an unmarried, childless, career politician spinster.

..

.

P.S.  I thought it apropos to reveal Gillard’s big secret today.  A day so very close to Julia’s heart.  International Worker’s Day.  Labour Day.  Otherwise known as May Day.

That’s also why I’ve changed this blog’s theme colour for today – in honour of the occasion.  Though I’ll admit it was rather difficult to decide whether it was more apropos to go red or …

“Socialist governments traditionally do make a financial mess. They always run out of other people’s money.”

– Margaret Thatcher, 1976

Goose’s $2Bn Shock ‘N Awe Intervention

28 Apr

Just checking the AOFM website to confirm any changes to tomorrow’s scheduled $700M Treasury bond auction, and found this bombshell announcement:

(click to enlarge)

So, another $2 billion (that’s $2,000,000,000) in short-dated Treasury debt was auctioned off today.

Did anyone see that coming?  And why the shock ‘n awe of a previously-unannounced auction, to the tune of $2 billion?

Could it be that the rapidly rising Aussie dollar, combined with fast-growing inflationary pressures, has forced this incompetent government into a “necessary” money markets intervention – (ie) selling extra AUD-denominated government debt, in an attempt to keep a lid on the AUD?

Yahoo! Finance - Charts - AUD/USD (click to enlarge)

If so, then when (if ever) will Goose and his fellow incompetents be held to account for driving those inflationary pressures in the first place, with their hundreds-of-billions in reckless and wasteful spending on overpriced school halls, ceiling insulation, the NBN, etc etc?

UPDATE:

If this was an intervention in money markets to cap the rapidly rising AUD, it seems to have worked. For now –

(click to enlarge)

For interest, here’s how the AOFM describes its Cash Management program:

Short-term funding needs can be met by increasing the volume of Treasury Notes on issue…

And here’s how they describe the Issuance Program for auctions of Treasury notes (as distinct from Treasury bonds):

Treasury Notes are short-term debt securities used primarily to meet within-year funding flows. Issuance decisions are made weekly and depend on the Government’s projected daily cash position for the weeks ahead. Treasury Notes are not expected to make a major contribution to overall funding for the 2010-11 financial year as a whole…

Tenders for the issue of Treasury Notes will be held on Thursdays, with details of the tenors (sic) and amounts to be offered announced at noon on the Friday of the preceding week.

Unless I missed something, the AOFM did not pre-announce today’s $2bn T-note auction at noon last Friday.  Granted, it was Good Friday. But I did not spot an announcement at any time during this week either.

Given the obvious immediate effect on the AUD this afternoon (see charts), and particularly in consideration of the media storm in recent days that followed the shock inflation figures, I smell a money market intervention – for pure political expediency.

With the public already concerned about rising cost of living, a growing revolt against the carbon tax, and plummeting polls for Labor, the last thing this government needs right now is the public spooked even further by the spectre of further rises in interest rates to hold back inflation.

So could it be that this government is going from bad, to worse, to calamitous, on fiscal management?  Could it be true that they are now compounding their first error of creating inflationary pressures by wanton borrowing-and-spending, by engaging in an ad hoc currency intervention – one that throws us into yet another $2bn of debt – solely in order to cap the rising AUD and calm inflation fears, a few days before the RBA meets to decide on interest rates, and, less than a fortnight out from the Budget?

UPDATE 2:

April 29, 9.14am –

From FXStreet:

AUD/USD Closing In On Yesterday’s High

Well now, that went well, didn’t it Wayne?  $2bn more debt just to save face before the Budget .. and the effect lasts less than 12 hours.

(click to enlarge)

Friday On My Mind – Another $700m In Debt

27 Apr

While most everyone else is obsessing about this Friday’s royal wedding, I’m thinking about another kind of “marriage” contract.

Til Debt Do Us Part.

You see, $189.84 Billion in debt is not a big enough ball-and-chain for the Goose.  Come this Friday, he’s signing us up to another $700 Million in the red contract.

Noone with two brain cells to rub together could still believe this government’s line that they will produce a surplus budget for the year (just 1 year, mind) in 2012-13.  Their ongoing dalliance with debt is all the evidence needed.  They are addicts, who will never go a single year without borrowing-and-spending far more than they take from us in taxes.

The simple fact is, we’ll all be paying for Goose’s indiscretions.  For decades to come.  Our creditors must be paid.

So tell us Wayne … who’s buying now?  Who Really Owns 73% Of Our Debt?

This Little Goose Went To Market

21 Apr

This Little Goose Went To Market

With the Budget coming up, let’s take a look at how well the government has been managing our >$189 billion gross national debt “investment” portfolio.

The Australian Office of Financial Management’s (AOFM) official Overview of the Portfolio document makes for interesting reading (click images to enlarge) –

AOFM Portfolio Overview - Face Value

AOFM Portfolio Overview - Market Value

Note the difference at 31 March 2011 between the Face Value, and the Market Value, of the “Physical debt” and the “Physical assets“, respectively.

The Market Value of the debt in “our” national portfolio is now greater than the Face Value, to the tune of $7.9 billion.  And the Market Value of the assets in our portfolio is now $3 billion less than the Face Value.

Notice also the standout feature – that our portfolio is being taken ever deeper into the red.  To the tune of $15 billion (15,000,000,000) every 3 months, through end September last year.  And by a further $23 billion (23,000,000,000), in just the last 6 months.

Seems someone forgot to tell Wayne Swan that the GFC peaked 31 months ago, in September 2008.  And, that there is an ongoing and worsening European debt crisis, the US has been placed on negative credit outlook for the first time in history, and the World Bank President has warned the global economy is “one shock away from a full-blown crisis”.

Wayne must be oblivious to all this.  Because this month he authorised the AOFM to “invest” up to $4 billion more in Residential Mortgage Backed Securities (RMBS) – yes, those things that blew up America’s financial system.  Read the detail at the AOFM website, and you’ll see our Swanny is even happy to “invest” more borrowed billions in RMBS’ that hold Low Doc loans exceeding 10% of the initial principal value of the security pool.  Seems he’s never heard of “sub-prime”.

Oh yes, and to pay for these – and the ongoing mega-billion NBN disaster – he’s all set to borrow even more hundreds of millions at the end of next week.

Would you want this Goose managing your investment portfolio?

Bring on an election!

Roast Goose

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