Published On: Sun, Jul 31st, 2011

Going Postal

I’ve got nothing against postal workers. But I do have a bone to pick with their union (American Postal Workers Union, “APWU”). Have you seen the APWU ads on TV and print lately? I think the ads are a lie.

The background is that as many as 3,700 post offices are going to be closed. The union hates that. The union is spending big bucks on a slick ad campaign in an effort to stave off the inevitable. 

APWU President Cliff Guffey had this to say recently:

“We must dispel the persistent myth that our work is funded by taxpayers.”

The ads show happy postal workers and all that mail they drive around. The heart of the UPWU message is:



“The post office is funded solely
by the sale of stamps and postage.”

By what magic does the PO do all that good stuff they do without sucking at the taxpayer teat? Easy. They borrow billions at near zero interest rates from good old Tim Geithner. Tim is responsible for the Federal Financing Bank. This is an off balance sheet funding vehicle (“SPIV”). Take a look at the balance sheet as of June 30, 2011.

So the PO has wracked up 12 largeWhat’s the Vig on this?Nothing! The debt is being rolled over at less than 20 basis points.

This is a perfect example of what is wrong with America.When faced with a problem what do we do?

(I) Lend money to the problem in the hope it will go away.
(II) Hide the debt in SPIVs.
(III) Burry the problem with zero cost debt.
(IV) Lie to the public and say there is no cost.
(V) Kick the can down the road and declare success.


The PO issue is small potatoes. But in a much bigger way all of D.C. is following the lead of the PO. Steps I through V are being played out as I write. It may take a few days for the markets to figure this out. But they will.

About the Author

- Bruce Krasting has been writing for the professional press for the last five years and has been on the Fox Business channel several times as a guest describing his written work. In January 2009, he started writing his blog, Bruce Krasting. From 1990-1995 he ran a private hedge fund in Greenwich Ct. called Falconer Limited. Investments were driven by macro developments.They expressed their views in global bonds, currencies, stocks, commodities and derivatives. He closed the fund and retired in 1995. Bruce has also been employed by Drexel Burnham Lambert, Citicorp, Credit Suisse and Irving Trust Corp. He hold a bachelor's degree in economics from Ithaca College and currently lives in Westchester, NY. We are very happy that Bruce has allowed us to post his articles here on These New Times, and we think you'll agree that his insights are detailed and often brilliant and he has a easy, readable style. You can read his blog everyday here