We have run some numbers using the New York Fed's Primary Dealer Statistical database, which in combination with the Fed's POMO operations in the second half of September, result in some peculiar conclusions. First, we have summarized all of the Fed's coupon POMOs from September 15 through the end of the month (we excluded the $550MM TIPS POMO from September 28): as the table below demonstrates, in five operations Brian Sack repurchased a total of $16.4 billion in Treasurys. So far so good. Yet when juxtaposing these presumed repurchases of coupon securities, with the disclosed holdings of coupon Treasurys by Primary Dealers, something does not jive: to wit - PDs disclosed a total of $6.8 billion in coupon (not Bill) USTs held as of September 15 (split between holdings of 1-3 Year, 3-6 Year, 6-11 Year, and 11+ Year positions). One would surmise that courtesy of over $16 billion in Coupon (not Bill - this is important) monetizations, PD holdings would at least declined, if not by the fully monetized amount, then at least partially. No such luck: in fact UST holdings increased by $400 million headed into September 29, or the last end of quarter number. What did decline, however, and to a much greater extent, was the PDs holdings of Bill securities, which dropped by a 2010 record of $50+ billion over the same period. And it did not stop there: adding in changes in the other four PD disclosed security holding categories, Agency Coupons, Discount Notes, MBS and Corporate Bonds, and the total decline since September 15 was a whopping $62 billion in PD holdings! So while POMO was used by the PDs for everything but what it was intended to monetize, the same primary dealers who were the benefactors of the Fed's guaranteed UST bid instead used the end of quarter, FRBNY-facilitated window dressing to not only not offload coupons, but to dump everything else, and use the proceeds to buy stocks, thereby explaining both the massive ramp into the end of September, and also the ongoing attempt to flush NYSE shorts, which as of September 15, were still near 2010 records.