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Posted: 6/11/2009 9:04:25 PM EST
Link Posted: 6/12/2009 3:56:38 AM EST
well thats um, interesting
Link Posted: 6/12/2009 6:50:20 AM EST
Link Posted: 6/12/2009 7:12:36 AM EST
It really looks like someone is interested in moving out of US bonds. Someone who has a lot of them.

Implications, implications...

Perhaps this is one of those "green shoots" I keep hearing about on the news...
Link Posted: 6/12/2009 7:27:58 AM EST
Counterfeit...or a foreign bank/country is quietly dumping them.
Link Posted: 6/12/2009 7:30:11 AM EST
Originally Posted By ThePatriot556:
Counterfeit...or a foreign bank/country is quietly dumping them.


That's a whole lot for a counterfeiter to move at one time.
Link Posted: 6/12/2009 8:00:57 AM EST
They were just trying to deliver them to my bank. my nigerian contact told me so.
Link Posted: 6/12/2009 8:02:57 AM EST
Originally Posted By ThePatriot556:
Counterfeit...or a foreign bank/country is quietly dumping them.


going w/ the former. if it were the latter, why not bring it in on a diplomatic flight or pouch?
Link Posted: 6/12/2009 8:03:01 AM EST
Someone is dumping them is my guess. Or they were simply trying to sneak them into Switzerland to stash in one of those ultra secure anonymous deposit boxes. Either way its stupid to move that much at one time if you're not legit. Makes me think that it may not be a country. Mabey Japanese or Chinese Mob? Dunno.
Link Posted: 6/12/2009 11:03:27 AM EST
Originally Posted By jcoffman55:
Either way its stupid to move that much at one time if you're not legit.


I agree with you about that point but then who said that wasn't just one of many shipments?



Link Posted: 6/12/2009 11:55:27 AM EST
134 billion, mostly in treasury bonds

...

including 249 treasury bonds worth 500 million

Someone flunked math. Or forgot to mention the other bond worth 133.5 billion. Also if 2 million were the typical value, that would mean 67,000 bonds, or 13 cases of copier paper (if printed on full sheets of paper). Kind of much to put in a false bottom of anything smaller then a Conex container.

Not to mention where you get paper bonds. The Bureau of the Public Debt has been tryign to do away with paper savings bonds- I though treasuries had long since gone paperless. Maybe these were old bearer bonds?
Link Posted: 6/12/2009 12:41:59 PM EST
Since the market seems to have decoupled from reality, I wouldn't be suprised be either scenario now.

Denninger was speculating yesterday that the weird 30-yr sale might be an indication of coming deflation. But, it was a small sale, so, it could have been somebody hedging...

Dip pouch would've been so much easier though if these were real.
Link Posted: 6/12/2009 12:52:57 PM EST
[Last Edit: 6/12/2009 12:56:01 PM EST by Cacinok]
Originally Posted By Country_Boy:
134 billion, mostly in treasury bonds

...

including 249 treasury bonds worth 500 million

Someone flunked math. Or forgot to mention the other bond worth 133.5 billion. Also if 2 million were the typical value, that would mean 67,000 bonds, or 13 cases of copier paper (if printed on full sheets of paper). Kind of much to put in a false bottom of anything smaller then a Conex container.

Not to mention where you get paper bonds. The Bureau of the Public Debt has been tryign to do away with paper savings bonds- I though treasuries had long since gone paperless. Maybe these were old bearer bonds?


there were some bonds for lesser amounts, as well, iirc 1 and 2 billion denominations. there is an interesting article posted in the other thread that points out some interesting coincidences. for example, a while back the remaining TARP monies were reported to be 134.5 billion.

ETA: link to article
Link Posted: 6/12/2009 3:06:39 PM EST
Originally Posted By Country_Boy:
134 billion, mostly in treasury bonds

...

including 249 treasury bonds worth 500 million each

Someone flunked math. Or forgot to mention the other bond worth 133.5 billion. Also if 2 million were the typical value, that would mean 67,000 bonds, or 13 cases of copier paper (if printed on full sheets of paper). Kind of much to put in a false bottom of anything smaller then a Conex container.

Not to mention where you get paper bonds. The Bureau of the Public Debt has been tryign to do away with paper savings bonds- I though treasuries had long since gone paperless. Maybe these were old bearer bonds?




500 million each
and some that were 1 billion each too

Link Posted: 6/12/2009 3:51:13 PM EST
Organized crime would not have been caught. I'd suspect that the deal (whatever it was) went south and the Japanese carrying the bonds (who could have been hired help) made a very hasty and therefore poorly planned bugout to Switzerland before someone in Italy caught up with them. Even if counterfeit, that almost has to be the work of a government somewhere. The fact that the Japanese "mules" were not arrested is very telling..

We'll never hear any more of this..

Ops
Link Posted: 6/12/2009 9:11:23 PM EST
Interesting!!!!!!!

Al Qaeda and North Korea working together!!!!!!!!!
Link Posted: 6/13/2009 2:48:53 AM EST
Originally Posted By Ops:
Organized crime would not have been caught. I'd suspect that the deal (whatever it was) went south and the Japanese carrying the bonds (who could have been hired help) made a very hasty and therefore poorly planned bugout to Switzerland before someone in Italy caught up with them. Even if counterfeit, that almost has to be the work of a government somewhere. The fact that the Japanese "mules" were not arrested is very telling..

We'll never hear any more of this..

Ops


Ops, I agree with you. A crime ring of that magnitude would have sent them via many means, via many routes so as to lessen the entire amount being caught in one sting.

I will add that the Italian customs was obviously tipped off and waiting, that's why they were able to pin down the people and do the search of a false bottomed suit case.

Trace it back and you'll find it was skimmed out of our banking system/wall street on the backs of honest investors.

Link Posted: 6/13/2009 9:54:58 AM EST
Bump for UPDATE in original thread. Asian media is linking it to TARP money. Looks like it may have been heisted from the USA maybe...
Link Posted: 6/13/2009 12:29:10 PM EST
They were real. There were some Kennedy types that haven't been issued in years.
Link Posted: 6/13/2009 1:00:28 PM EST
Originally Posted By Manny2_0:
Interesting!!!!!!!

Al Qaeda and North Korea working together!!!!!!!!!


Just hope they don't start trying to talk in that fake ching-chong language!
Link Posted: 6/14/2009 9:37:38 PM EST
http://market-ticker.denninger.net/archives/1119-The-Saga-Of-The-Bearer-Bonds.html


Saturday, June 13. 2009
Posted by Karl Denninger in Editorial at 15:12

The Saga Of The Bearer Bonds
It just gets more and more odd after my original report, with the latest coming from a German newspaper (translation courtesy of Google):

Hit for the Zöllner: The contraband securities valued at 134 billion U.S. dollars are apparently real. Die italienische Finanzpolizei hatte zwei Japaner ertappt, die im doppelten Boden eines Koffers milliardenschwere Anleihen in die Schweiz schaffen wollten. The Italian financial police had two Japanese caught in the false bottom suitcase billion-dollar bonds in Switzerland wanted to create. Von dem Fund profitiert das hochverschuldete Italien.

Note that this has received very little coverage in the so-called "mainstream US media" - but it is everywhere in Europe and Asia.

Japan, for its part, oddly said the following as soon as this story started to hit the press:

“We have complete trust in the fact that the U.S. views its strong-dollar policy as fundamental,” Yosano, 70, said in an interview in Tokyo on June 10 before attending a Group of Eight meeting of finance ministers starting today in Italy. “So our trust in U.S. Treasuries is absolutely unshakable.”

Uh huh. And the Japanese said in December of 1941 that all was well too. Anyone remember what happened on the morning of the 7th?

Let's apply a little "Occam's Razor" to this entire story.

You're not going to walk into a bank with $130 billion in bearer bonds and cash them. Nor are you going to sell a bond with a $500 million face value to someone without them authenticating it. They will be authenticated before you get one dime out of them - no matter who you think you're going to "give" them to.

So if they're fakes and you're "just screwing around", there is no reason to hide them. Nor is there any particular reason to have authentic and recent original bank documents in your luggage with them, as has been reported.

Next, unless someone knew you were smuggling them, why would you be subject to that sort of search? What made the people involved "interesting" to the authorities? This doesn't sound like a random stop to me; how many people are carrying $130 billion in bearer bonds at any given point in time? No, someone was tipped off that this was happening. Now why would you bother to stop them here, prior to their attempted delivery of such instruments, if they were fake?

Think about this: You know someone is smuggling a load of drugs. You can either bust them immediately or you can tail them and bust them when they show up at the "meet" to exchange the dope for the money. If you do the former the guys with the money get away, having committed no crime. But if you do the latter, you get to bust both the courier and the purchaser - two times the effectiveness for the price of one, and double the seizure value, since you get to seize the cash too!

So let's assume that the certificates are real, as German media seems to believe and which, by the way, makes logical sense given what they were and the sheer impossibility of cashing a fake $500 million bond.

Ok, who has $130 billion in bearer bonds? Remember, bearer instruments haven't been issued by the Treasury since 1982, when they became illegal to issue, at least to US institutions and residents (there was an exception carved out for Treasury instruments issued to non-US residents in 1985 - a time of high deficits) The answer to that question: it is rather unlikely that there remains $130 billion of legitimate US Bearer issuance outstanding anywhere - to anyone.

Mr. Holmes would be initially puzzled by such a caper. On the one hand we have the impossibility of the bonds being real, because there simply isn't $130 billion of issues remaining outstanding. On the other hand we have the impossibility of negotiating a fake $500 million bearer instrument, making the exercise of counterfeiting one expensive and futile.

This leaves us with more questions than answers at this point.

Or does it?

As Mr. Holmes is famously rumored to have said, "once you eliminate the impossible, whatever remains, however implausible, must be the truth."

So what remains? Let's run a theory here - one of the few possible remaining options, given the exclusion of what we know not to be true...

Are we willing to assume that all the "issue" of Treasury bonds has been done "above board" as required by law. If Treasury has been surreptitiously issuing bonds to, say, Japan, as a means of financing deficits that someone didn't want reported over the last, oh, say 10 or 20 years, then the following is about to occur:



Who could have possibly been complicit in such a scheme? I can come up with only two nations (and only nations could be involved due to size): The Japanese and Chinese. Since the two individuals who were arrested were reported to be Japanese nationals......

There are tremendous implications in an event like this, again, assuming the bonds are real.

The owner is going to want them back, of course. But Italy is going to keep a third as their statutory penalty for non-declaration on the border. Oops. That's great for Italy, but it blows bananas for the actual owner.

Of course Italy (or the US!) could declare them "fake" and as a consequence simply burn them. If they are in fact real, that's an even bigger problem. See, Bearer Bonds are issued without registration - they are as anonymous as a $100 bill in terms of who owns them. That's one of their "features", and why they were often used for various clandestine money operations. So if they are real and are destroyed, the owner is out of luck - their money is gone just as it is if you burn a $100 bill in an ashtray.

How much is $130 billion in this context? About 1/5th or so of what Japan legitimately owns of US Treasury debt. How would you like to take an instantaneous (and permanent!) 20% haircut on your securities? That's what I thought.

To add some balance here, there have been stories about fake bearer bonds coming out of North Korea and other places for years. But the idiocy of attempting to pass a $500 million certificate belies this possibility - who in the name of God would take such a thing and give you anything for it without authenticating it first? While bearer instrument are "anonymous" in terms of who owns them, their authenticity is easily verified as they ARE serialized instruments.

I remain puzzled, and am not advancing the above theory as fact.

It is, however, one of the few explanations that actually fits the facts, and for that reason, I think we need some answers. If in fact previous administrations were issuing "off-book" Treasury debt in this fashion to sovereigns then implications are truly explosive as such issues are blatant and outrageous unlawful acts and would expose everyone involved to severe criminal penalties.

Let's hope we get those answers, and this isn't one of those "funny things" that just disappears into the night.
Link Posted: 6/15/2009 3:01:16 AM EST
This is getting pretty interesting...

I bet that it never makes the news here.
Link Posted: 6/15/2009 6:54:19 AM EST
Originally Posted By Colby:
This is getting pretty interesting...

I bet that it never makes the news here.


iirc, bloomberg had a snippet on it, but the MSM appears to be under a gag order.
Link Posted: 6/15/2009 7:24:18 AM EST
Didn't this same story circulate about 5 years ago except it was Don Johnson form Miami Vice that was caught carrying the loot?

I'm not saying this is false, just seems a little bit familiar.
Link Posted: 6/15/2009 7:50:42 AM EST
Originally Posted By vatopa:
Didn't this same story circulate about 5 years ago except it was Don Johnson form Miami Vice that was caught carrying the loot?

I'm not saying this is false, just seems a little bit familiar.


not the same, but similar. the thread in GD references the don johnson incident. iirc, johnson allegedly had 8 billion.
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