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And...It's Gone: QE2 Ends As Dealers Flip Just Auctioned Off 7 Year Back To Fed After Holding It For Under 22 Hours
Goodbye net monetization of US debt. Going forward the Fed will only roll maturing debt, as per QE Lite announced in early August, and due to the fact that it will be roughly one fifth the notional periodic impact of QE2, is not what so many erroneously classify as QE2.5 (a topic beaten to death previously). The biggest question of who will buy bonds now that Primary Dealers will be unable to roll debt to the Fed remains, judging by today's carnage in bonds, completely unanswered. And confirming that PDs always and only cared about flipping the On The Run bond, is the just concluded last POMO, which out of $4.909 billion bonds monetized, saw a vast majority, or $4.405 billion in the form of Cusip QT7: the 7 year just auctioned off yesterday! In other words, Dealers held the On The Run for less than 22 hours before flipping it back to the Fed!!! Well, those days are now over.
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Is Brian Sack one of the 428K on this week's initial jobless rolls?
lol, nice one
Phew!... the calm before the next storm
How long calm last? I'm not stock expert. But see forcing 30 biggest banks to raise capital, reserve requirement. Could be coincidence.
You seem to be shorting pronouns and conjunctions. How's that market?
Sounds Eastern European...
Naw. He's using text disguising software.
i wonder what FAT ASSHOLE rosenberg aka roise would say
on that .. he always come up w/ ideas who is going to buy debt
alx
Rosie got fat on rabbit stew. Watch your cute little ass or you might be lunch.
BTW it is "Rosie" not "roise".
Was it earless rabbit stew?
http://www.youtube.com/watch?v=Iw2R7y65nFg
+1 LOL
What happened ito bond yields in the UK when QE ended? Sod all. Rosie in right. Pimco is wrong. Go join the masses of traders who did their nuts shorting JGBs in the 1990s. Apparently no-one would buy these because the deficit was so high.
Exactly. Look at what bond yields have done in Japan over the last 15-16 years.
......AND I bet you wouldn't abuse Abbey Cohen because her size would you. Anyway Rosie isn't that fat at all. Cuddly maybe, but never fat.
Households (in Reston, Va) will buy until QE3, then they will sell (at a profit).
Certainly not my household - I pay a service to keep the TERMITES out.
Paper eating vermin be damned!
Date Issue
Date Offer
Amt. 13 wk Bill 07/05/11 07/07/11 27B 26 wk Bill 07/05/11 07/07/11 24B
Certainly, $51B in bids have already been lined up before the weekend - we taxpayers pay a premium to keep the VIGILANTES out.
Sovereign paper shorting vermin be damned!
And just now on the BlowHorn [CNBC]:
"QE2 didn't do what it was supposed to do... I think we should just declare victory and move on...but in the end, I don't think it succeeded." David Kelly, JP Morgan
Classic.
Worked just fine. As proof, check out David Kelly's last bonus check.
QE2 did exactly what it was suppossed to do. Which is what the Federal Reserve's real mandate is, simply to prop up the evil banking system at all costs. Once you realize that this is true, all these actions make perfect sense, no matter what lies they say.
Yea, but now what?
My best guess is somehow (maybe war or a financial calamity) they are going to rally the dollar and crash the economy. The banks and large corporations who are flush with dollars right now, will be able to seize any remaining assets the middle class and poor have left. Then they destroy the dollar and bring in something like the SDR or Bancor on a global scale.
No, everything is working just fine. Brian OFlanagan just said so on the silver thread.
I'm surprised he's not here setting the record straight for those of you who don't understand how the markets work.
You just can't make this shit up. If it wasn't so damn sad, it would be great social commentary.
Do we even care how deep the rabbit hole goes anymore? Are we just along for the ride?
methinks the maggot protesteth too much.
.
Could you be a bit more succinct?
Just now on the BlowHorn [CNBC]:
"When they [equities] get cheap you got to buy 'em...you can almost buy them blind." Gordon Charlop
Sounds like fabulous advice, straight off the floor of the NYSE.
"Goodbye net monetization of US debt."
Are you freakin dreaming?
Its over, theyre done monetizing the debt into ETF's and therefore 401K's, which the Treasury will seize next.
Say goodnite Irene.
You don't really believe that, do you?
If your dumb you will sit back and watch them. If your smart you will take a 50% loan out on your 401K now as insurance. Reinvest it yourself so you don't loose via opportunity cost while you are paying back into your 401K. I just started trading a year ago and blew my John Hancock 401K performance out the window. I am up 32% versus 4.7%. The internal fee's kill a 401K anyhow. 401K's are a scam. They lock down your money so that Wall Street can gain weight. MY BET....they are coming after retirement accounts. Bet your chocolate starfish on it!
22 hours might be as long as you would want to hold on before depreciation starts biting your investment.......
You know what they say about once you drive a new car off the lot...
Well if it's a GM car, then i believe the saying goes, "you'll be back in 15 min..."
hot potato
Step one: Grab Grenade
Step two: Pull pin
Step three: Toss back and forth as quickly as possible
OMG that is funny!!!
Goodbye monetization until the dow drops below 11,000 and the 10 year yields 4%. Then old Benny boy will buy another trillion.
naw, boner will balance the budget. lololololol
If Bone-nher was a balanced budget boy...
He would cut back on his 55 gallon drum consumption of Orange-Man-Tan...
Thats not the plan. Oh I know thats what they want everyone to BELIEVE the plan is, take a little dive on the equity markets, FED comes running to the rescue...except this time no one shows up to once again bail out bubble equities.
Americans with their normalcy bias coma are the easiest targets for 3rd worlding in history.
Party up this weekend, america, celebrate your 'Independance' (LMAO) in a drunken BBQ fest, as you dont even notice its all done, over.
Is it bad that I'm actually hoping you are right Sheep? I'm getting ancy about the SHTF timeline. Lets get this party started!
..but it doesn't end with a bang..but with a whimper.
This 4th of July I, along with 15 volunteers, will be in the local parade with a car decked out with Ron Paul 2012 decorations and will be handing out slim jims promoting his Pres run. Pissing in the wind perhaps, but let it not be said that no one tried.
Fuck the Fed for all it's worth
Every single one on Earth
too late, fed's job is done. no doubt it will be discarded so some politician can claim that he fixed the problem. meanwhile all valuable assets in the US will have been gobbled up by international banking interests. no political fix for this, its way beyond it.
You Sir, are awake!
Please proceed to the lifeboats. You now have an assigned seat
+2 (one each)!
Nice, I just put a Ron Paul 2012 bumper sticker on my car.
Often when I drive down the Eisenhower (290) to work in the city, I spot Homeland Security vehicles 'monitoring' activity on the expressway. My license plate is probably in one of their databases already
http://www.prisonplanet.com/police-trained-nationwide-that-informed-amer...
http://truthisliberty.blogspot.com/2011/05/man-ejected-from-park-for-spo...
The slim jims are a great idea, btw.
You May Be a Domestic Terrorist If:
oh dear ....... i answered yes to every question ! ........ just call me ' Little Lady Terrorist ' now. Add it to all the other names people call me .
12. use the term "silver Bitches"
13. if you believe in the terms "Oligarchy" or "Cleptocracy".
I'm loading up on guns and ammo.
SD1....... you have constantly repeated this storyline. I think it's more true than any other theory and people are too scared to recognize reality. And here's why........They can't do outright monetization anymore because the increase in the money supply is ramping up the inflation to the point where everyone is noticing. However, if they take money from existing accounts (401k, pension, etc) and use it to buy the bonds while replacing with IOU's (see treatment of Social Security funds), then the PONZI continues without the direct inflation side effect as the money supply doesn't technically grow--at leasty by their bizarro world accounting tricks.
I've told everyone I know that full nationalization of all paper retirement funds will occur within the next 16 months in the name of Patriotism/National Security. Of course, with a good false flag this weekend, everything could happen much sooner.
When I think of the market I'm reminded of those loony tunes episodes with Willie E. Coyote churning his legs in the midair, a cliff behind him and just out of reach.
Good bye blue sky, hello rock.
It's a brave new world down there.
Not for nothing but rates jumped right after Chicago PMI, so for today at least, there's not enough evidence.
THIS critical relationship is still holding: Stocks up = Treasury prices down
In a few weeks, when stocks go down, Treasury buyers will magically appear!
Of course, this effect will go into reverse, big time, when QE3/OT2 gets pre-announced by Jon Hilsenrath in the WSJ.....
And that's the rub, exactly. The Bernank must prevent Treasury yields from rising at all costs.
I picture him curled up in a corner, biting his nails down to the nub in a cold sweat.
the bernank wet dream is a world six feet deep in hundred dollar bills. His only fear is that some day there may be no treasury market for him to manipulate/monetize. witness him begging crapital hill for a debt ceiling raise.
Exactly, Bernanke now has to throw overboard everything not nailed down to save his POMO Treasuries. Better have your life vests firmly fastened on, Mr and Mrs ETF 401K holder america.
Right, just as TD predicted back at the beginning of 2010. For the Fed to keep Treasury rates low (as Timmy sells a $trillion+ in paper), then one way to do so is to "crash the equity markets". And that's exactly what started happening in May 2010.
I'm betting that something similar will happen again, after QE2 ends.
Bernanke will have to choose between losing control of equity prices or note/bond prices. To me, the whole house of cards crashes a lot sooner IF he lets rates skyrocket. The lesser evil is to let equities fall, AND now that they're 25% higher than they were in the summer of 2010, there's more "room" to let them fall.
and the auction was weak, wasn't it? imagine if dealers didn't know the fed was going to buy it back?
Since the government lies about everything, why should I expect "the end of QE" to be any different - i.e. it continues despite the stated end?
hyper interest or QE3 - no brainer
I'd LOVE for them to come out and announce another $1.5 trillion QE, nothing I'd like to see more than PM's go up 10% overnite. But it wont happen, not this time.
hyper interest or QE3 - no brainer
Meanwhile, the 3M continues to yield .01%.
Only slightly better than the negative -.02% on the 2M.
Do the PDs have any obligation to buy without being rescued by an immediate POMO?
As for who else will buy, surely The Bernank has an account or two in the Carribean? Meanwhile, can China be convinced with a sweetheart deal to trade some $ for Treasurys which they can then trade in another sweetheart deal to save Europe?
People really think China is 'saving Europe' buy taking their debt? Wow.
Sorry, I forgot to put the quotes around 'save Europe.' But yes, they are saving them, for slaughter day, just like any other good shepherd does.
BTW, I'm not the junker here.
The UK, the Caymans, the bernank only comes out in the light of day for blatant QEs in order to instill "confidence".
The confidence instilling seems to be working quite well, I see nothing but 'Zzzzzzzzz's' from normalcy bias americans with their whole futures wrapped up in ETF bubble equities.
Things are about to get very interesting.
LOL! Anyone catch the MSNBC reporter who thought his mic was off calling Obama a dick? :D
Add +1 to todays unemployment report.
Somebody post a link for this.
Rotsa ruck with your next erection, Barry.
http://www.politico.com/news/stories/0611/58098.html
Thanks, Rusty!
On the subject of who will buy Treasurys now, an interesting “old news” piece via GATA today about 2009 UST auction rule changes that did away with so-called “guaranteed bidding” that allowed China and its SAFE to buy >35% of various auctioned items in contravention of auction rules and primary dealer interests in knowing who owned what. Which leads to the question of what arrangements other governmental actors will pursue now that QE2 is cocooning to emerge as who knows what.
http://www.gata.org/node/10065
Its hardly 3 years ago anymore +$30 trillion more debt.
There will be no QE3, certainly not in the form everyone expects with free Hefty bags full of crack rocks so the equities party can continue. At best, QE3 will be a behind the curtain bond support action to the detriment of peoples precious 100 P/E stocks. Time to pay the piper, and it wont be pretty for normalcy bias equity junkie sheep.
The whining for more QE will start in 3...2...1. Companies are already complaining that working capital is constrained (per ISM NY this morning).
As noted by a former Treasury Secretary from the days when this all began, the corporate sector runs to DC with their hands out at every opportunity and they get what they came for.
Thats all legal ,...right.???
Fucking joke.....
Actually it most likely is 'legal'. We live within a National Security State folks. It's only illegal when we do "it".
Daniel Ellsberg recently made the point that all the criminal acts Nixon committed against him could now be done legally. Long, interesting interview at :
http://inthearena.blogs.cnn.com/2011/06/07/daniel-ellsberg-all-the-crime...
Excerpt:
That includes burglarizing my former psychoanalyst's office (for material to blackmail me into silence), warrantless wiretapping, using the CIA against an American citizen in the US, and authorizing a White House hit squad to "incapacitate me totally" (on the steps of the Capitol on May 3, 1971). All the above were to prevent me from exposing guilty secrets of his own administration that went beyond the Pentagon Papers. But under George W. Bush and Barack Obama,with the PATRIOT Act, the FISA Amendment Act, and (for the hit squad) President Obama's executive orders. they have all become legal.
And so ends round two of QE
Up next, why of course its round three
Keep an eye on the VIX
For rounds four, five and six
Poor Market, I hardly knew ye.
Yeah ! Our Gov buys its own paper, manipulates the PMs and Crude Oil and Commodities all day long ! Prints Fiat, regulates banks and credit interest rates and sticks its collective snout in every butt crack ! It bails out bankrupt corporations.....the list is endless ! There is one thing it would never do ! Buy and sell stocks to prop up the DOW and NASDAQ ! No ! No ! No ! Monedas 2011 If you pay your taxes....you are the problem !
Exactly, Monedas. Well stated.
OK, it's five days old but here is an article from WSJ suggesting the release of oil from strategic reserve is a subtle form of QE3.
http://blogs.wsj.com/marketbeat/2011/06/24/oil-reserve-release-qe3-by-ot...
And nobody cares.
Q3 WILL HAPPEN! I'm just not sure what they wilL call it or exactly when. I just can't reconcile who is out in the market looking to pick up an extra 300-500 billion of our paper, maybe Mexico?? No, the debt markets are competing with hard assets and for China that's the smart move. New debt at the rate of 800B every year and rollover of the ST existing debt is something that the market just can't absorb. When it becomes apparent to everyone this PONZI will be over. I'm wondering though how long Madoff would have last if he could print money. The loss of the reserve currency status will come SOONER than everyone thinks and will be a surprise to an arrogant, greedy US consumer!
Cheers!
I think all of the people that say QE3 will not happen are forgetting a few things.
1. If the Fed did indeed want to run the stock market into the ground, thus allowing the banks and corporations to buy up assets for pennies on the dollar, it would have already done that. I'd argue that it would have made more sense for them to do that when unemployment was low and the DOW was around 13,000.
2. IF the Fed did this, it would ignite a revolution in the US. It would show Americans that the Fed is enemy #1.
3. Bernanke would be in clear violation of his precious "dual-mandate." If unemployment exploded up to 10-11+ percent, Washington would be slamming him for not doing anything.
Letting equities and commodities falter makes Bernanke and QE3 look like the saviors again. When the markets drop 10-20 percent, Bernanke can then say that inflation was indeed transitory (just like he's been saying the whole time). Washington and Wall Street both will be begging him for more QE and he will happily give it to them.
Bernanke was Time Magazine's man of the year in 2009. Do you think he'd have that same honor if he allowed the stock market to tumble down to its fair value (well below 9-10,000)? No, of course not. Doing so would force him to admit that he actually hasn't done anything (other than creating massive inflation) since 2008. So you just have to ask yourself, is it more desirable for Bernanke to be a hero or a villain? Answer that question and you then will see what's going to happen.
Plus, QE3 is inevitable. The fact that the Chinese are using their reserves to buy the EURO and commodities/PMs shows that in the coming months very few will step up to buy US debt.
Who says QE is ending? The posted POMO schedule tells a different story:
http://www.newyorkfed.org/markets/tot_operation_schedule.html
July 6, 2011 July 7, 2011 Outright Treasury Coupon Purchase 01/15/2014 - 06/30/2015 $2.5 - $3.5 billion
July 11, 2011 July 12, 2011 Outright Treasury Coupon Purchase 07/31/2015 - 12/31/2016 $2.5 - $3.5 billion
That is the continuation of QE lite. Whereby new money from nowhere is added to repaid principal (if any) on fed's $1.5T mortgage bond protfolio, and treasuries are purchased.
Who can tell me whether the published amounts are face value, or prinicipal repaid? I have seen confusing statements from the Fed on that.
Who will buy the Bonds? That's an easy one. How about the New NATO/Libyan Central Bank in the newly established "Oil for USA Bond Program."
I wonder what tomorrows market will bring.
Tried to explain to Hugh Hewitt about how the Democrats are going to use the now forgone interest rate rise to pressure the Repubs regarding the debt cieling. Though he agreed he said that it would be 4 years down the road. I laughed and asked him who is going to buy 80% of our bonds now that the fed is not. Not the Japanese, not the Chinese. He actually said they would. LOL. I told him 1 to 2 months till QE3. He actually said no way. I guess we will see.
we'll reinvest the interest in government bo....and it's gone.