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[bob ford <bobford79 AT yahoo.com>]

I think from these numbers, and speculating on tonight's results, we will see 
the economy off a cliff-side within 12 months.  When you see these numbers on 
paper, it is mind-boggling.  


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About Thomson ReutersPREVIEW-US Treasury to expand debt arsenal as deficit 
rises

Mon Nov 3, 2008 5:17pm EST   

Oil jumps 10 percent on Saudi supply cuts 

Wall Street jumps in record Election Day rally 

U.S., European stocks surge on rising oil prices   



WASHINGTON, Nov 3 (Reuters) - Facing the need to borrow up to a staggering 
$2.1 trillion in the current fiscal year to fund economic rescue programs, 
the U.S. Treasury is expected to significantly expand its debt securities 
arsenal.

Analysts anticipate that the Treasury on Wednesday will announce the return 
of the 3-year note and adopt more frequent offerings of 10-year notes and 
30-year bonds. It may also consider more reopenings of shorter maturities.

"They are going to pull out all the stops. There's a good chance they'll come 
back to a quarterly 3-year note, monthly 5-year (note) auctions and increase 
issuance pretty subtantially across the board," said Kim Rupert, head of 
global fixed-income analysis at Action Economics in San Francisco.

The Treasury Department said on Monday it would need to borrow a record $550 
billion in the October-December quarter, including a likely $300 billion in 
financing for Federal Reserve liquidity operations.

The total was $408 billion higher than previous estimates announced in July 
2008 due to outlays for economic assistance programs, lower tax receipts and 
lower issuance of non-marketable debt securities to state and local 
governments.

The Treasury anticipates $368 billion in borrowing in the January-March 
quarter.

The Treasury said a survey of 18 primary bond dealers showed a consensus for 
a fiscal 2009 federal budget deficit of $988 billion -- more than than 
doubling the record $455 billion deficit in fiscal 2008, which ended Sept. 30.

The dealer consensus for fiscal 2009 marketable borrowing was $1.4 trillion, 
with a range of $1.1 trillion to $2.1 trillion.

MASSIVE SCALE

Goldman Sachs estimates a $2 trillion borrowing requirement that would 
finance an $850 billion federal deficit, fund $500 billion in Treasury 
purchases of bank assets and equity, and roll over $561 billion in maturing 
coupon securities as net sales of state and local securities fall $100 
billion.

"The sheer scale of this need suggests to us that Treasury will adopt all 
three of the options it has so far indicated are under consideration," 
Goldman analysts said in a research note. "These include moving to a full 
monthly cycle of 10-year notes, moving to a full quarterly cycle of 30-year 
bonds, and reintroducing the 3-year note as part of the regular quarterly 
refunding operation."

Wrightson ICAP chief economicst Lou Crandall said the Treasury will need more 
options.

"Our own guess is that the Treasury will issue a set of stand-alone notes 
outside the framework of its regular recurring auction cycles," Crandall said 
in a research note, adding that some dealers have advocated new maturities 
such as 4-year and 7-year notes or 15-year bonds.

"We think these options are less likely, but they cannot be ruled out," he 
said.

UBS analyst Chris Ahrens said in a research note that the Treasury will 
likely announce sales of $30 billion to $32 billion of 3-year notes, $20 
billion to $22 billion of 10-year notes and an $8 billion to $10 billion 
re-opening of 30-year bonds. It will likely launch monthly 10-year reopenings 
and quarterly long bond auctions in February 2009.

"The fiscal situation is so volatile and has changed so dramatically that our 
confidence level for these forecasts is lower than normal," he wrote. 
(Reporting by David Lawder; Editing by Jan Paschal) 

http://www.reuters.com/article/marketsNews/idUSN0332850520081103