Blatant Treasury Churn At The Fed: Entire POMO Consists Of Just Auctioned Off 3 Year As FRBNY Launches "Flip That Bond" Program

Tyler Durden's picture

Ok this is it. Someone (preferably of the less than multi-millionaire Wall Street marionette variety) in Congress has to look into the blatant bond churn-cum-flip (that was happening behind the scenes a few months ago and is now so blatantly in your face it is a slap to all US taxpayers) which has the Fed paying Primary Dealers billions in commissions for a trade that has absolutely no value added. And while we have been complaining about this for months, today just takes the cake. Below we present the entire list of permitted issues to be monetized by Frosty-Sack. Note that there were 29 CUSIP eligible for buybacks. What happened - the Primary Dealers flipped virtually the entire operation in the form of the just auctioned off 3 Year PQ7! This is half the entire Primary Dealer allocation in the bond auction that was completed on January 11 (whose technical original issue date was yesterday). One more 3 Year POMO, the next of which is on January 31, in which PDs flip a like amount, and the Fed will have monetized the entire auction, but in the process having paid at least a few hundred million of taxpayer capital to the PDs for absolutely no value added! This is a daylight robbery and has to stop.


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IBelieveInMagic's picture

Me thinks it is a message to Mr. Hu, now that he is in town -- we can monetize our debt at our whim and devalue your reserves...

TruthInSunshine's picture

Paging Ron Paul. Paging Ron Paul.

Dr. Paul, you promised your supporters you were going to do something about this. We're anxiously awaiting, and we're expecting you to follow through.


Commander Cody's picture

If Ron Paul does not address this blatant theft immediately, then he is as big a POS as the rest of the bunch in DC.

SheepDog-One's picture

Indeed...we've heard the speeches and the promises....we're waiting....

flattrader's picture

Ron Paul will do some grandstanding in the form of stand-up interviews and possibly some hearings.  That's about it.

He has no sizeable constituency outside of his district.  That's why he didn't follow through on his presidential bid.

He has no sizeable constituency of friends inside Congress either.

He's a lot like Dennis Kucinich.

They are opposite side of the same coin.

Canucklehead's picture

Thanks for the link.  I couldn't find any information on the size of the transaction.  It must be small as you would think they would attach a number to bolster the impact of this "news".

JW n FL's picture

"the Fed will have monetized the entire auction, but in the process having paid at least a few hundred million of taxpayer capital to the PDs for absolutely no value added! This is a daylight robbery and has to stop."


Never, it makes to much money...

hedgeless_horseman's picture

"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.

We the People of the United States of America are complicit, through our inaction, in the destruction of this nation our forefathers worked so hard to create.  Blindness, shame and slavery is our way, unless we find a way to rekindle the spirit of Jefferson and others like him.

jus_lite_reading's picture

+14 Trillion Dollars


As I said, only God can save us now from self-destruction

JW n FL's picture

1st go sit at the kids table until you get a clue...

2nd $14T as the new or old debt ceiling? you mean $17T?

3rd... Wiki Leaks... the Evil Julian... has in his possesion $20T worth of docs, ish...

There is no 4.. do the math..

$20T minus $17T ='s $3T... so one years worth of pretend and extend for us.

jus_lite_reading's picture

Why the attack? I gave him +14 trillion points on jest of US debt. It will be raised to $20T soon. There is no more pretend extend

JW n FL's picture

sorry, I am an angry person.

JW n FL's picture

I want a G6, some hookers and a 0% FED Window or I will jump!

Thanks bro, i needed a laugh! be well...

JohnG's picture

Don't forget the blow.

JW n FL's picture

thats why I need the plane... I dont want the cut stuff thats here.

JW n FL's picture

instead of the gulf can i swap for a falcon? i really need the head room?

blindfaith's picture

jus_lite_reading says " As I said, only God can save us now from self-destruction".

That reminds me of the story about the guy sitting on the roof of his house during a flood waiting to be rescued by God.  He shoos off the guy in the rowboat, he shoos off the helicopter, and he pushed away the tree limb floating by, proclaiming God will save him.  After his death, he asks God why didn't he save him, and God naturally ass, I sent a boat, a helicopter, and a tree limb, what more did you want?

Go save you own ass, God is to busy trying to figure out what to do to save the fish.  Get out of your nice warm house and get into the streets.


U know.. all these folks who think some God or other is going to save them, needs to keep watching Fox, CNBC, and listening to Sara and the neo right for guidance.  Everyone is going to cry like babies with the I wish I hada, I guess I shoulda crap.

JW n FL's picture

The Problem, "THE" problem... is, "Us" v. "Them".

You and I were fine with looking down upon the ants as they scurried about? No?

Now those same fucking ants will destroy us all... and its not "Them" or someone else's fault, it is our fault... for not educating them.

WE WANTED US v. THEM! we were so happy... in our Grander'.

We deserve what we are getting, they dont deserve what they are getting becuase they are ignorant.

hbjork1's picture

Aw, JW, you worry too much.  What I want to know is; "Who is goiing to win the Superbowl?"  Forget this trival stuff. 

JW n FL's picture

cheerleaders! raaa raaaa his boom baaaaaaaaaaaaaaaaaaaaaaa.

lesterbegood's picture

We the People of the Republic for the united States of America have rekindled the spirit of Thomas Jefferson, Benjamin Franklin, Geo. Washington, et al.

The spirit of liberty that resides within us all.

Rekindle that spirit.

By the People, for the People...with liberty and justice for all.


JW n FL's picture

1. How much land did George Washington own... in then America... as a %.. 1% or 5% or 10% and so on...

2. what makes you think that you are really better off without the Matrix to support you in your ignorance?

3. what makes you think you could survive minus the FED's printing? you would stand and defend your rights, then? after the fall but not before? just asking???

Thanks for Playing!

JW n FL's picture

Wet Ink for ALL BITCHEZ!!! Get OFF! Your! LAZY FAT ASSES and DEMAND a COPY of your NOTE!!!! NOW!!!!!

Guy Fawkes Mulder's picture

One more 3 Year POMO, the next of which is on January 31, in which PDs flip a like amount, and the Fed will have monetized the entire auction, but in the process having paid at least a few hundred million of taxpayer capital to the PDs for absolutely no value added! This is a daylight robbery and has to stop.

It wasn't taxpayer capital that was paid to the PDs.

It was thin-air FRNs given to the PDs by the Federal Reserve in exchange for Treasury debt.

Since the dollar and perhaps 50% of the U.S. population will be dead by Dec 2013 and Jan 2014, there is really no basis for calling it "taxpayer capital". It's just digital monopoly money exchanged for bubble gum wrappers, for no reason other than to keep the music going a little longer and to enrich the monopoly money men even further before it stops.

Is it sick? Twisted? "Criminal"? Blatant? Should it get everyone mad?


But is it taxpayer capital? No. Because it is debt due after the whole system will fall apart.

Half the country doesn't pay taxes anymore. It's a zombie nation, full of zombie people and zombie banks. And a zombie Treasury, funding a zombie government, and a zombie Federal Corporation with money that comes from "debt" that will not be paid back.

I chuckle when I see the phrase "taxpayer" money used in reference to medium-term and long-term Treasury debt.

On the other hand, even though I assert that the system is going to crash by the time the medium term becomes present, I don't know it like I have a crystal ball. Maybe they will figure out some sick way of preserving dollar-denominated debts after the coming crash so that the U.S. Federal Corporation will continue to exist and will continue to claim the right to collect the debt it promised it would collect from its citizens. In that case, taxpayer capital is currently being promised hand over fist in record levels to the bond holders. What a nightmare, if that is the case.

Hephasteus's picture

Ordinary Citizen Meeting. Ya I noticed those poor suckers at the fed were watching a new show. Flip that bond. Something along the lines of putting a new coat of gold on their tungsten bars and giving themselves a bank loan. [ Laughter ]

JW n FL's picture

right in front of God and everyone.. with people standing around... watching, too no avail.

Cleanclog's picture

Have to give more free earnings to JPM and GS as their avg. employee compensation in only $200+K and $300+K.  Poor widdle bankers.  Can't have that.  Find way to pour more money into their deserving coffers.

It is sooooooooooooooooo disgusting.  The distain grows and grows until it pops.  The protests will come.

Bruno the Bear's picture

Kind of sucks being me and not a PD in terms of commissions.  What I am really hoping for is Bernacke sitting in front of Ron Paul's committee explaining all this BS.


Hope springs eternal and all of that.....

thepigman's picture

Bernank ripping off taxpayers to feed

the banksters. Ain't this country great?

thepigman's picture

Wouldn't entirely surprise me if

the fed's 29 year old traders are treated

to occasional dinner and fine wine by the PDs.

Dr. Richard Head's picture

Robbery schmobbery.  You think anyone, besides the tens of thousands of readers here, in a position of authority will stop this gravy train for the cronies of the Fed?  Shit, I have posted as much of this information on my Facebook page as I can to wake up the few I know, but feedback has been that the posts suck.  I guess telling others that someone is picking their wallet is garbage and I shouldn't do it.  Fuck em.  Hope any fucks who believe in the power of the free market get bled to wealth death.  

Commander Cody's picture

Many people do not want the illusion to end.  They may suspect something's up, but don't really want to know the truth.

knukles's picture

Post sucks...

We want Snooki
We want Snooki
We want Snooki

jus_lite_reading's picture

TD says this has to stop but indeed, everyday it is worsening.

lesterbegood's picture

Morpheous: "You were born a slave, Neo."

The Federal Reserve owns every man, woman, and child born in this country.

Don't believe me?

Research "birth certificate bonds" if you dare, and open your eyes.

The Federal Reserve owns all private land in America.

If you "own" real estate, carefully read your deed of trust. You will find that you are listed as a "tenant with privileges of assignment", or words to that effect.

The key word being "tenant":

An individual who occupies or possesses land or premises by way of a grant of an estate of some type, such as in fee, for life, for years, or at will. A person who has the right to temporary use and possession of particular real property, which has been conveyed to that person by a landlord.

MachoMan's picture

My deed doesn't say that.  Can you point me to the part on my one page deed where it says anything other than the grantor conveys and warrants good and merchantable title?  Am I missing something?

Orly's picture

Were you born in Hawaii, too?


MachoMan's picture

No, but I would definitely like to make a shit ton of money and retire to the north shore of kauai...

cxl9's picture

Bernank ripping off taxpayers to feed the banksters. Ain't this country great?

Yeah, but most of those taxpayers haven't been born yet. So, no harm done.