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$6.8 Billion POMO Closes: Brian Sack Monetizes $1.1 Billion Of Bonds Issued Last Week

Tyler Durden's picture




 

Today's POMO has closed, with Brian Sack monetizing $6.8 billion of bond. This is a 3.5x Submitted to Accepted ratio as PDs realize various blogs are on their POMO funding needs and thus moderate their Submission amount. Yet what is simply surreal is that the second most monetized bond was PJ3, due 11/30/2015. This is the same issue that was just auctioned off by the Treasury last week! There is no longer even a pretense of avoiding direct monetization. It is time for Bernanke to go out and just buy bonds at auction. A one week turnaround is nothing less than criminal fraud which if anything is unnecessary and pads the PDs pockets. The result was so stunning it was not even included in last week's frontrunning guide as nobody had a clue that the Fed could be so brazen in its flaunting of direct monetization. For just holding the bond a whopping 168 hours, PDs made a few million dollars. This is criminal. But who cares. Eric Holder has still to prove that he is anything besides an organ donor. 

 

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Tue, 11/30/2010 - 12:25 | 764563 hedgeless_horseman
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Thursday, February 25, 2010

"We're not going to monetize the debt," Mr. Bernanke declared flatly, stressing that Congress needs to start making plans to bring down the deficit to avoid such a dangerous dilemma for the Fed.

http://www.washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/

Tue, 11/30/2010 - 12:26 | 764572 SheepDog-One
SheepDog-One's picture

I dont get why theres no one in place to arrest the Bernank, much less even question him about his madcap actions.

Tue, 11/30/2010 - 13:21 | 764724 Duuude
Duuude's picture

You cannot arrest an Emperor.

Tue, 11/30/2010 - 12:34 | 764607 EscapeKey
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For the next eight months, the nation’s central bank will be monetizing the federal debt.

http://dallasfed.org/news/speeches/fisher/2010/fs101108.cfm

Tue, 11/30/2010 - 12:25 | 764565 SheepDog-One
SheepDog-One's picture

Another $7 billion POMO? I had no idea, and markets didnt seem to notice either. WTF is actually going on with all this BS? Where is 'the money' going? At this point, I believe these people should be stopped by force.

Tue, 11/30/2010 - 12:35 | 764612 EscapeKey
EscapeKey's picture

One POMO doesn't affect the market; we need two shots of viagra for that to happen, soon to be 3.

Tue, 11/30/2010 - 12:38 | 764618 SheepDog-One
SheepDog-One's picture

Didnt even happen yesterday with $9 billion POMO, now tack on another $7 billion today and DOW is down -90? Not very good bang for the buck here.

Tue, 11/30/2010 - 12:46 | 764635 hedgeless_horseman
hedgeless_horseman's picture

I just noticed the header for Column D.  Instant Classic, Tyler.

Tue, 11/30/2010 - 12:49 | 764648 dnarby
dnarby's picture

POMO doesn't look like it's been used to pump equites since 11/12/10

http://thetaildoesnotwagthedog.blogspot.com/2010/11/where-did-pomo-go.html

I think the money is being used to support bonds (corporate, muni, whatever), because w/o a bond market, there is no market.

IMO, I could be wrong.

Tue, 11/30/2010 - 12:56 | 764668 EscapeKey
EscapeKey's picture

... or the "forward looking markets" now have POMO's reflected in their prices already.

Tue, 11/30/2010 - 13:47 | 764804 tmosley
tmosley's picture

The heroin's not working anymore.

What do we have that's stronger than heroin?

Tue, 11/30/2010 - 14:15 | 764906 asteroids
asteroids's picture

Money is raining from the helicopter but the ground is now saturated. When the mudslide starts to move... look out below.

Tue, 11/30/2010 - 12:25 | 764567 onlooker
onlooker's picture

Kinda of busy right now. Guess I will catch t on CBS or ABC tonight

Tue, 11/30/2010 - 12:25 | 764568 Spalding_Smailes
Spalding_Smailes's picture

Got X ?

Tue, 11/30/2010 - 12:26 | 764576 max2205
max2205's picture

This is like kiteing checks. Is that legal now. Opps legal is t even a word now. Forgot duh

Tue, 11/30/2010 - 12:32 | 764600 magis00
magis00's picture

(Wikipedia)  Circular kiting describes forms of kiting in which one or more additional banks serve as the location of float, and involve the use of multiple accounts at different banks. In its simplest form, the kiter, who has two or more accounts of his own at different banks, writes a check on day one to himself from Bank A to Bank B (this check is referred to as the kite), so funds become available that day at Bank B sufficient for all checks due to clear. On the following business day, the kiter writes a check on his Bank B account to himself and deposits it into his account at Bank A to provide artificial funds allowing the check he wrote a day earlier to clear. This cycle repeats until the offender is caught, or until the offender deposits genuine funds, thereby eliminating the need to kite, and often going unnoticed.

Tue, 11/30/2010 - 12:41 | 764614 hedgeless_horseman
hedgeless_horseman's picture

You left out the part about TD+3 and busted trades. 

Good time$...good time$.

Tue, 11/30/2010 - 13:06 | 764689 SwingForce
SwingForce's picture

Or until the offender is booted out of EFHutton and takes the top job at Pu-Bache, where he gets his wrist slapped by the SEC. (1980's style, maybe things have changed for the Wall St. guys, huh.huh.)

Tue, 11/30/2010 - 13:38 | 764784 Technichel
Technichel's picture

Kiting - usually done right before bankruptcy. Does not look like they give a hoot what they are doing anymore.

Tue, 11/30/2010 - 14:46 | 765020 Joe Davola
Joe Davola's picture

Busting out the joint - in Henry Hill vernacular.

Tue, 11/30/2010 - 12:31 | 764579 Mercury
Mercury's picture

Eric Holder will most certainly not be throwing himself in front of any part of a statist takeover of the economy.

Tue, 11/30/2010 - 12:28 | 764583 themosmitsos
themosmitsos's picture

Tyler yup, the speed w/which the turnaround is being compressed is impressive, and the implications criminal, no doubt. And yet, people keep talking about "dollar strength" while $F parity, gold ~1400, etc...I feel like I'm on acid sometimes, LOL ;)

Tue, 11/30/2010 - 12:28 | 764584 magis00
magis00's picture

How are the BOJ & ECB "interventions" and POMO different?  (Or is TD's above observation the "difference"?)  And are we now seeing the same diminishing returns that those others did with their 30min bolsterings?

Tue, 11/30/2010 - 12:28 | 764585 Jason T
Jason T's picture

This is Rudolph Havenstein Policy all over again.  Let's not start another you know what.

Tue, 11/30/2010 - 12:29 | 764586 FISD
FISD's picture

Holder is way too busy with more important matters... like the World cup. I wonder if he'll pick up some gold while in Switzerland?

 

Tue, 11/30/2010 - 12:29 | 764587 aint no fortuna...
aint no fortunate son's picture

Holder's a coward, thru and thru. No balls. PERIOD.

Tue, 11/30/2010 - 12:34 | 764605 Rogerwilco
Rogerwilco's picture

@ain't

How dare you say that! Eric Holder is the Hero of Waco, the only man brave enough to send in the tanks against women and children he earlier gassed with CS. Men like him are few and far between.

Tue, 11/30/2010 - 12:30 | 764588 jus_lite_reading
jus_lite_reading's picture

Is there any question as to why 2010 = 1776?

Tue, 11/30/2010 - 12:29 | 764589 Ripped Chunk
Ripped Chunk's picture

Does Sackless have a spread in Paraguay as well?

Or will he live in the guest quarters at Ben's place, nourishing himself exclusively on Ben's semen?

Tue, 11/30/2010 - 12:30 | 764591 Bastiat
Bastiat's picture

But precious metals are in a bubble, right?

Tue, 11/30/2010 - 12:30 | 764592 Hansel
Hansel's picture

And Congress wants to call China a currency manipulator.

Tue, 11/30/2010 - 12:31 | 764593 Dismal Scientist
Dismal Scientist's picture

'Just...one...more...good...year...'

...is the refrain going round the whole of Wall Street's collective consciousness. If only those damn Europeans could have kept the shit from hitting the fan for another month, the b*stards.

Tue, 11/30/2010 - 12:32 | 764595 SheepDog-One
SheepDog-One's picture

Its nothing but straight up criminal fraud in your face, but CNBC has adapted nicely and just considers monetizing the debt standard operating procedure. I pray for the day all these people are swiftly brought to their knees.

Tue, 11/30/2010 - 12:32 | 764599 TradingJoe
TradingJoe's picture

Theft everywhere you look! POMO is  JOKE! PDs STEAL with both hands, people, when this shit will hit the fan, and it will trust me on this one, it may take a little longer then "normal" but it eventually will, so when this is going to happen I WANT TO BE AS FAR AS I CAN GET, and so should you my fellow posters, or die fighting in ditches, there will be no winning, on either side! Stop buying ammo, keep buying PMs and get the fuck out!

Tue, 11/30/2010 - 12:33 | 764602 sabra1
sabra1's picture

i want the wikileaks on banks released immediatly!

Tue, 11/30/2010 - 12:34 | 764606 Ripped Chunk
Ripped Chunk's picture
20 Statistics That Prove That Global Wealth Is Being Funneled Into The Hands Of The Elite – Leaving Most Of The Rest Of The World Wretchedly Poor

http://blacklistednews.com/20-Statistics-That-Prove-That-Global-Wealth-Is-Being-Funneled-Into-The-Hands-Of-The-Elite-%E2%80%93-Leaving-Most-Of-The-Rest-Of-The-World-Wretchedly-Poor-/11696/0/10/10/Y/M.html

 

Tue, 11/30/2010 - 12:35 | 764608 Arthor Bearing
Arthor Bearing's picture

Hey settle down it's monetizing debt when the Fed buys bonds directly, but it's perfectly fine if the banks make money too. None of this is criminal or evil. Merry Christmas assholes, go out and get those Q4 numbers up (Christmas is a bankster holiday, always has been)

Tue, 11/30/2010 - 12:48 | 764645 Id fight Gandhi
Id fight Gandhi's picture

happy hanukkah.

Bonuses for bankers, Christmas layoffs for the rest!

Tue, 11/30/2010 - 16:19 | 765374 Ripped Chunk
Ripped Chunk's picture

Suck your own dick in Macy's window.  That isn't criminal is it?

Tue, 11/30/2010 - 12:35 | 764609 Bartanist
Bartanist's picture

Most likely Holder was told to be a good little boy or else he would be an organ donor sooner than he likes.

Tue, 11/30/2010 - 12:35 | 764610 scatterbrains
scatterbrains's picture

Anyone thinking about where they're going to clamp their hedges on /SI should it launch into a parabolic explosion ?

Tue, 11/30/2010 - 12:37 | 764615 virgilcaine
virgilcaine's picture

The patient is critical.. a few shots of adrenanline can't save him.

Tue, 11/30/2010 - 12:38 | 764617 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Laws are for the peasantry, always have been, always will be.

Tue, 11/30/2010 - 12:39 | 764619 bob_dabolina
bob_dabolina's picture

*

Tue, 11/30/2010 - 12:39 | 764623 A Man without Q...
A Man without Qualities's picture

Does it really make any difference when the debt was issued?  It's all pari passu and all, for the most part, priced off the same yield curve.  The Fed buys Treasuries with newly created money, which is debt monetization.  

It's a bit like when your friend breaks up with his hot girlfriend - is there an official length of time to wait before you try and get her into your bed?

Tue, 11/30/2010 - 12:48 | 764646 Hansel
Hansel's picture

I wouldn't describe treasuries as a "hot girlfriend".  Gold is though.

Tue, 11/30/2010 - 12:54 | 764662 Bananamerican
Bananamerican's picture

how hot?

Tue, 11/30/2010 - 13:04 | 764687 Abigail Adams
Abigail Adams's picture

Like the "hot dose" of heroin they gave Sharon Stone in Casino to kill her.

Tue, 11/30/2010 - 12:40 | 764627 RobotTrader
RobotTrader's picture

As usual....

As credit market contagion intensifies...

Crude oil prices start crashing.  Ergo...

Retail stocks accelerate up even faster!

Ann Taylor now at 2-year highs.

Tue, 11/30/2010 - 12:57 | 764667 Internet Tough Guy
Internet Tough Guy's picture

Crude 'crashing' at 85? Last time you said it was crashing at 80. How crowded are the LA buses?

Seriously, go get your shine box.

 

Tue, 11/30/2010 - 12:43 | 764631 LongSoupLine
LongSoupLine's picture

I can't wait for Ron Paul to get that fuctard Bernanke back on the stand.  I hope Paul brings a pipe wrench and just beats his skull.

Tue, 11/30/2010 - 12:50 | 764650 Psquared
Psquared's picture

I have wondered about this too. Is the Fed actually paying a premium to PDs in these arrangements? My knowledge of POMO ops is limited, but I am guessing that if the Fed actually purchases directly at auction they will have supplanted the direct bidding process. The PDs will just stop showing up and when/if the Fed stops these purchases there will be no POMO operation or auction process to go back to.

My other question is how does the Fed hold these bonds? Are they held by PDs for the benefit of the FRB or does the Fed self-clear?

Tue, 11/30/2010 - 12:58 | 764676 Gimp
Gimp's picture

We have become a joke, the government running the stock market?

Days of the dollar as the world reserve currency are numbered with the idiots we have running things.

Thanks Tim, Ben, Obamy, Nancy Fawnks and crew..great job.

Tue, 11/30/2010 - 13:10 | 764695 Alex Lionson
Alex Lionson's picture

In the meantime EPFR reports:

"With temperatures rising on the Korean peninsula and falling in debt-wracked Ireland, the second-to-last week of November offered investors plenty to think about. They responded by committing more money to Emerging Markets Equity Funds, thereby pushing them into record setting territory, while snapping the lengthy inflow streak compiled by Emerging Markets Bond Funds and hammering US Municipal Bond Funds for the second straight week."

"All Equity Funds tracked by EPFR Global on a weekly basis, with $3.7 trillion in total assets, absorbed a net $4 billion during the week ending November 24. Of that total, $2.4 billion flowed into emerging markets funds, taking YTD flows to $84.3 billion, just ahead of last year’s record-setting $83.3 billion. Bond Funds posted collective outflows of $735 million, largely due to the first back-to-back weeks of net redemptions for US Bond Funds since 4Q08, while Money Market Funds took in over $13 billion for the week."

Tue, 11/30/2010 - 13:24 | 764734 virgilcaine
virgilcaine's picture

Some pump went into the Euro. Desperate at 129 level.

Tue, 11/30/2010 - 13:33 | 764764 lunaticfringe
lunaticfringe's picture

A fucking organ donor? Pure gold. Major snark ala our home made kleptocracy at the link.

http://thecivillibertarian.blogspot.com/

 

Tue, 11/30/2010 - 13:46 | 764800 Fearless Rick
Fearless Rick's picture

A few clarifications, if I may:

1. Eric Holder is the Shadow.

2. Fed is funding PD shortfalls in off-book MBS.

3. Robot Trader: Your mother called, said hand jobs would cost an extra $10 if you use cock ring.

That is all. Continue pissing into wind.

 

Tue, 11/30/2010 - 14:07 | 764878 Boilermaker
Boilermaker's picture

And the REITS full reverse...again...for the Nth time in a row.  From falling off a cliff to a magical and intense buying pressure to the rescue.

When does this stop?

Tue, 11/30/2010 - 14:10 | 764890 NotApplicable
NotApplicable's picture

I call shenanigans. There is no way Holder is useful enough to donate organs.

If anything, he's got an organ harvester card.

Tue, 11/30/2010 - 14:54 | 765045 karzai_luver
karzai_luver's picture

CON-fi-DENSE bitchez in Ann Taylor we belive!!!!!!!!!

BUY BUY BUY NOW it's ALL on SALE!

Do NOT follow this link or you will be banned from the site!