After $456 Billion In Treasury Monetizations Since The Start QE Lite, A Half-Time POMO Summary

Tyler Durden's picture

Now that the Fed is by far the biggest institutional holder of US debt, it is time to conduct a periodic review of what, how and when Brian Sack has been monetizing in the past two years. As a reminder, as part of QE1, the Fed purchased $300 billion worth of Treasurys, the balance going to MBS and agency securities. QE Lite and 2 have, so far, focused only on USTs: as Morgan Stanley summarizes, as of today, the NY Fed has purchased a total of $456bn Treasuries / TIPS since August 10, or the announcement of QE Lite. Since additional LSAPs were announced in November (or QE 2 proper), the Fed has purchased $380bn. As the Fed is now roughly half completed with QE2, here is where we stand.

Graphically this looks as follows:

First, and most important for those who enjoy frontrunning the Fed which now telegraphs what it will do within 24 hours with impunity, here is the list of bonds most likely the be monetized by the Fed in future POMOs:

Next, we present the hit ratios, or the Submitted to Accepteds by Sector:

A more detailed visual chart of buybacks by sector and by operations:

Cumulative CUSIP purchases for the duration of QE Lite/2:

Last is the presentation of how many bonds are monetized on an On The Run basis, versus n-Old (aged vintages). Obviously PDs enjoy dumping any just issued 2, 3,5 and 7 years, while holding on recent issuance in the 10 and 30 Year space.

Source: Morgan Stanley

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Oh regional Indian's picture

Here is where we stand? More like here is where lie, face down on a cold hard floor with a bloody nose and a bleediing forehead and a terrible hangover.


surfwon's picture

from my silver dealer today




From: Robert Chastain []
Sent: Monday, February 28, 2011 10:03 AM
To: Joshua P. Morant
Subject: Re: Silver Eagles (IMPORTANT)


will mine be late


From: Joshua P. Morant <>
To: "" <>
Sent: Mon, February 28, 2011 10:49:22 AM
Subject: FW: Silver Eagles (IMPORTANT)


The email was sent to me this morning by our trading department. Thought you would like to know......

    The US Mint is running on a limited supply of Silver Eagles. We will continue selling them but the price has gone up and shipping will run 4-6 weeks.



jus_lite_reading's picture

Welcome to $400 silver and Armageddon boys...

Cash_is_Trash's picture

I'm going short human compassion and long FUCKING IGNORANT POPULATION, YOU LET THIS SHIT HAPPEN, by watching American Idol and that shit t.v. hours on end.

Quaderratic Probing's picture

You can't get angry at sheep for being sheep, and you can't be angry at foxes for being foxes.

You can be a little pissed at Public Servants the sheep elect to guard the sheep

SilverRhino's picture

That sucks.  My order from delivers today.  (Ordered last 2/21 @ 1900, I know, bad timing)

Shipping is one business day.

FOC 1183's picture

No S/A ratio h/t to ZH?  Figures

jus_lite_reading's picture

Allow me to sum up what is going on-- the public has been F**KED to death. Face it.

hambone's picture

Suspect we are ready for a crash of all PM's, equities, potentially w/out the safe haven rise in dollar / T's.

Until somebody identifies the next bailout mechanism or QE3 mechanism...we are staring straight into July w/out T bond purchasing, crashing state / muni spending, etc.  Of course this all changes once the mechanism is called out and PM's go ballistic, stocks same, dollar destroyed...but til then, it's time for a strong pullback to make way for QE3, 4, 5.  I see no way Fed can announce QE3 at this point w/ commodities surging, ags surging.

We all anticipate QE3 but somehow we need to identify the doesn't exist as of yet?  $5T ($3T rollover, $2T new issuance) in T's to be purchased in the next these get purchased has to be elaborated by the Fed or else we are in for a crash.


disabledvet's picture

"oil."  at least according to the news today.  "Bernanke says the high price of oil will create a need for continued..."  need i finish?  "never saw a QE he didn't like?"  how about "he's goin' down wingin it!"  should i care?  do i trade for a living?  ironically...yes!  just not "digital dollars" unfortunately.  in further news..."stuff doesn't matter...until it does!"  and "i do care about your job!  i really, really do!"

citizens divided's picture

...seize the bankster cabal.

SDRII's picture

What is the projected roll off rate if the fed stops QE and decides to just keep b/s constant assuming QE completion

JW n FL's picture

I think I have said this before... and at the risk of sounding redundant...


Guns, Food, Ammo and of course PM's...

Physical Power Source of your own?

Water source you control?

Medicine(s) 6 month supply... tell them you are going on a cruise.


If you dont take care of you, soon no one else will be either.. its just math, this does Not add up to anyones benefit.

Boilermaker's picture

Golly, I wonder if alot, most, or the lion's share of that money found it's way in to REITs and financial equities?


Caviar Emptor's picture

$456 billion doesn't buy what it used to. Economy languishing, banks not lending, and globe in turmoil. Crank it up, Ben! We need a few billion to trickle on down. It's the Trickle Me! economy. 

baconator3000's picture

Fortunately with Improving economic activity we will not need QE3. Looks like the long awaited recovery is finally underway. Evidence is all around us. Demand for Gas/Cotton/Food surging. In order to meet the demand, as Dr. Paul Krugman. PHD says, jobs must be created.

baconator3000's picture

Whats to argue about? Economic activity is picking up everywhere. Prices are rising because of increase demand. If anything the fed may need throw some water on the recovery with a rate hike this summer! As Dr. Krugman pointed out. Stocks are a leading indicator and the market likes this recovery. Dont be left behind!

hambone's picture

Thanks for the laugh...always enjoy the humor.

baconator3000's picture

Laugh all you want. But when Netflix and Apple hit a thousands dollars and 700,000 jobs are being created a month. Dont be upset you got priced out. Its not a grand conspiracy. a recovery is underway. As confirmed by many leading economists like Liesman & Krugman. 

hambone's picture

okey - dokey

You just let me know where the extra $1 to $2trillion to buy at least a portion of the $5T in T's in the next 12 months comes from absent QE and absent SS surplus.

Two obvious implications are that money has to come from somewhere and likely at much higher rates...hmmm.  Wonder what that will do to our budget and GDP absent all the state / muni spending on top of no free POMO?

disabledvet's picture

you mean the $200 netflix now?  maybe people really have had enuf....

baconator3000's picture

The sky is not falling. You are worrying about backroom garbage only PHD's could understand. A massive economic boom is underway that will generate this revenue. Green jobs and industry is months away. Evidence is all around us.

asdasmos's picture

I guess if the PHD's have it working in their models, it must be true.

Dapper Dan's picture

I find the simplest way to confirm a recovery is to drive over to a construction equipment rental store and if I cannot find parking space due to all the un-rented equipment parked there, well then,  NO Recovery!

ConfusedIdiot's picture

Thank you B. We needed that. Regards CI

asdasmos's picture

....and Jim Rogers on bloomberg. Feb 28th 2011



baconator3000's picture

 if they refuse to pay SS we can sue them

baby_BLYTHE's picture

Here is the deal, folks. We are 0 for 3.

The shooting in Arizona, drug addict anarachist that waxed on about "Currency"

Then Charlie Sheen shooting off his mouth, betraying his friend Alex Jones that actually was a "friend" in the sense that he cared- working out to rid addiction giving him a time/place despite previous controversies. Sheen totally fucked over Jones' love or hate him.

How about "Inside Job", BEST DOCUMENTARY of the year. Ya know, I remember when that phrase use to describe something else.

Fall of the Republic had a bonus section, if you legally and lawfull obtained a copy, there is a segment entitled 20 Minutes with the President... Maybe documentaries like this or Obama Deception don't win Oscars for a reason???

I need help!

Guy Fawkes Mulder's picture

Paging Doctor Wanger! Paging Doctor HarryWanger!

Haven't heard any of his expert analysis for a while...

I guess he quit on his legendary account...

99er's picture


About as exciting as last night's Oscars, eh?

Roscoe's picture

Can someone explain in a sentence or two how the QE purchases raise the stock market? I can't get my small mind around it. I know it's probably obvious, but it seems to me that the only money that gets donated are the commissions paid to the dealers. The fed money simply gets given indirectly to the treasury to run the gov't, so where did all the money come from to lift the market, or does it merely take a small quantity of purchases during low volume sessions to pump the whole thing?


Sorry for such a basic question, but thanks for your feedback.

packman's picture


 - The stock market is up because earnings are up - way up.

 - Earnings are up because people and companies are spending more money.

 - People are spending more money because they're getting more money - most of it from the government (.e.g. $2.6T run rate in 2006 to $3.7T run rate in 2010).

 - The government is able to spend this extra $1.1 Trillion per year directly because of QE, funding a significant portion.

If it weren't for QE, the government might have still been able to spend the extra $1.1T per year; however it would have had to have pulled all that money out of the economy, via treasury purchases by the public/banks/etc.  So it wouldn't have helped any.  Instead due to QE a large portion of the treasury purchases is funded by Fed-created money, and the real (non-created) money that would have gone to treasuries instead goes to pump up stocks - either indirectly (by buying stuff and increasing corporate profits), or directly (by buying equities).


Reese Bobby's picture

Well that's part of it.  But the Ponzi scheme is more than that the way the way I see it.  The Treasury issues Treasury bonds to the Primary dealers who control the private Federal Reserve bank, along with other Big Banks.  The private Federal Reserve Bank that controls the U.S. money supply than buys the recently issued treasury bonds from the PD's providing them with immediate risk-free profits.  The PD's then directly pump the stock market.  This arrangement is like a multi trillion dollar hedge fund that is raising a trillion or so a year dedicated to pumping up stocks until other dopes get excited and start buying stocks as well.  If it works it all blows up later.  If it doesn't work they will find a way to dump the resultant mess back on the Fed so the taxpayer can be saddled with yet another disaster. Wheee...

Roscoe's picture

Thanks packman, I appreciate the explanation.-Roscoe

PulauHantu29's picture

Nice summary. Thanks.