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$8.3 Billion POMO Closes: Brian Sack Forbids Instantaneous Monetization Of Just Auctioned Off 10 Year

Tyler Durden's picture




 

Today's $8.3 billion QE has closed and the Fed has monetized 13 bonds of various CUSIPs between 2/15/2018 and 8/15/2020. The Submitted to Accepted ratio was a very low 3.3x, once again confirming that PDs had excess cash, did not need to rely on the Fed's generosity and as a result are now ramping stocks with aplomb. What is most curious is that after we have disclosed that in the last 2 POMOs the most monetized bond was the just auctioned off issue, today Brian Sack put CUSIP PC8, the 10 Year auctioned off on November 9 on the exclusion list (see bolded below), meaning PD were forbidden from flipping the most recent issue. We wonder if the New York Fed no longer enjoys being under the microscope in that it openly and flagrantly allows almost instantaneous monetization of "just issued" cusips? Of course, that QE2 continues to funnel billions of taxpayer money to Primary Dealers is not threatened one bit. After all millionaire bankers have to become billionaires through ongoing perfectly legal theft from the middle class in some way or another.

 

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Thu, 12/02/2010 - 12:27 | 771923 Ragnarok
Ragnarok's picture

It's all noise, we know the end game. Keep your PMs close.

Thu, 12/02/2010 - 12:28 | 771928 Larry Darrell
Larry Darrell's picture

Tyler

Any chance you can keep doing the front-run column?

While I am a lowly working class guy with no access to flipping these things, I find it fascinating to see your success rate due to the transparency of what's going on.

Thu, 12/02/2010 - 12:30 | 771930 RobotTrader
RobotTrader's picture

Over 2 billion on NYSE so far with the A/D over 7 to 3.

Powerful day.

Even the crappiest sectors are exploding higher today:

- Banks

- Homebuilders

- Solars

If this keeps up, the NYSE Summation will turn back up.

The only lagging group now is the shipping sector, which is tied to the BDI.

Thu, 12/02/2010 - 12:43 | 771997 pat53
pat53's picture

Yup, another brutal day for bears, who refuse to accept that the economy is slowly recovering. Once SPX gets above 123 its lights out for bears and a huge short covering begins

Thu, 12/02/2010 - 12:48 | 772031 TruthInSunshine
TruthInSunshine's picture

"...the economy is slowly recovering..."

 

And by that you mean that unemployment is increasing, home values continue to fall, real wages are either stagnant or falling, more Americans as a % of the population are on government assistance than at any time, and the true value of assets held by banks, financial institutions, pension funds and the like are declining, right?

Thu, 12/02/2010 - 12:52 | 772040 curbyourrisk
curbyourrisk's picture

If market truth is allowed to rear its ugly head again and the Government no longer supports stock prices through the PPT and POMO's.......I would love to see the faces of the longs as the market drops 20% in one fucking day!

 

THE MARKET CAN'T HANDLE THE TRUTH.....

Thu, 12/02/2010 - 13:25 | 772168 thepigman
thepigman's picture

Did you happen to notice that

the squid's upward revision to a 2011

2.7% GDP still makes it worse than this

year's GDP? Whoopeee...let's roll!!!!

Thu, 12/02/2010 - 12:52 | 772038 Spalding_Smailes
Spalding_Smailes's picture

 

JinkoSolar Holding Co., Ltd. ( 2 Billion Market Cap)

 

Is a good buy at this level. I think I will ....

Nov. 3rd (38.92)

Today    (23.28)

Thu, 12/02/2010 - 12:52 | 772043 curbyourrisk
curbyourrisk's picture

Leo.....is that you?

 

Did you change your handle???

Thu, 12/02/2010 - 13:03 | 772081 Spalding_Smailes
Spalding_Smailes's picture

Buy low. Blood in the water ... Rig,Rimm,X .... The beat goes on.

Thu, 12/02/2010 - 13:19 | 772144 Violetta (not verified)
Violetta's picture

Thanks.  I'm interested in alternate energy.

Thu, 12/02/2010 - 12:46 | 772005 TruthInSunshine
TruthInSunshine's picture

Let's see how well the POMO dump correlates with U.S. equity market performance.

 

After all, this can now be tracked in real time, essentially, intraday.

Thu, 12/02/2010 - 13:03 | 772080 erik
erik's picture

It doesn't correlate well with end of day results, but I would be curious to see if it correlates on a smaller timeframe.

Interesting development with blocking a recently auctioned treasury from being re-purchased.  A token gesture to keep those of us screaming "monetization" off their backs?

Imagine what happens when the banks are mostly depleted of treasuries on their balance sheets due to QE, but loaded with commodities/stocks/junk bonds, etc, and then the economy slows down again.  The Fed is creating even more imbalances, and the moment that things turn for the worse, we will see a complete massacre in the risk market.

Thu, 12/02/2010 - 13:35 | 772208 thepigman
thepigman's picture

The fed is incompetent. Watch the

yield curve.

Thu, 12/02/2010 - 14:01 | 772358 erik
erik's picture

What are you watching for in the yield curve?

Thu, 12/02/2010 - 15:02 | 772683 thepigman
thepigman's picture

When the 10 year blows through

the 3.1% yield level, you will realize

Ben is lying about lowering long term

rates with QE2 just as he was lying

about not monetizing the debt.

Who do you think he works for?

Thu, 12/02/2010 - 16:42 | 773084 erik
erik's picture

what do you see making the 10 year rise even further from here?  economic growth?  default risk?

i don't think they will allow the 10 year to rise much further because of the pressure it puts on the housing market.

Thu, 12/02/2010 - 13:00 | 772008 plocequ1
plocequ1's picture

Yes, But there is pathetic volume. Does that make you feel any better? Who gives a fuck anymore. Its simple, Dont short.

Thu, 12/02/2010 - 12:58 | 772063 Id fight Gandhi
Id fight Gandhi's picture

Amzn, pcln, cmg, nflx, lvs all down. All the shit that gets pumped beyond any reason. Something is going on.

Market won't old today's gains.

Thu, 12/02/2010 - 13:10 | 772109 erik
erik's picture

if the EUR-USD holds its gains, the market will too (unfortunately).  i'm long SPXU (ouch) and short NFLX via puts (yeah) as of close yesterday.

I haven't seen a cleaner bubble chart than NFLX.  Take a look at previous peaks 04/26 05/13 08/17 09/30 10/27.  All buying exhaustion.  Just like yesterday's exhaustion, today was a given to be down, I wrote a day trade message about that yesterday.  I will be out of the entire position by today.

Thu, 12/02/2010 - 13:00 | 772068 SMG
SMG's picture

I've been short for the past few months, and it's been a LONG few months.   However, I still think time is running out on the rally and I'm gonna hold on.  We'll see....

Thu, 12/02/2010 - 13:11 | 772114 erik
erik's picture

I was fooled by Consumer Metrics data, which is completely at odds with what we're seeing right now out of the consumer.  Disappointing.

Thu, 12/02/2010 - 13:46 | 772273 sabra1
sabra1's picture

when the huge dump arrives, it'll be overnight as it was in 2008. 10X worse!

Thu, 12/02/2010 - 13:13 | 772124 thepigman
thepigman's picture

Brian Sack hands out free taxpayer
money to the PDs but he and Bubbles
Bernanke are incompetent at holding
rates down anywhere along the yield
curve now. They are complete asshats.

Thu, 12/02/2010 - 13:19 | 772143 fatsak
fatsak's picture

Very difficult to be short the market with Funds chasing, FED, and most likely deal on tax cuts and unemployment.  I am waiting until March and just picking up any dips on FCX and Silver. 

Thu, 12/02/2010 - 13:52 | 772307 sbenard
sbenard's picture

"Brian Sack forbids instantaneous monetization"?

Yes, he now requires the PDs to inhale first!

Thu, 12/02/2010 - 14:00 | 772343 D-Falt
D-Falt's picture

There's just no economic activity that comes closer to revealing truth about dysfunctional markets than arbitrage.  When you have to use the coercion powers of the state to prevent that arbitrage, yea verily, you have publically had sex with the poodle!

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