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With The End Of Today's $6.8 Billion POMO, Total Fed Treasury Holdings Now Pass Hits $972 Billion

Tyler Durden's picture




 

After a rare one day respite, Brian Sack has reentered the market and bought $6.780 billion in bonds maturing between 12/31/2014 and 05/31/2016.Not surprisingly, not one single bond of the most recent issuance (the PJ3 of November 23) was tendered for: the loss on the transaction to the Primary Dealers would have been so big not even multi point, and completely unauditable bid/ask spreads by the Fed, would succeed in making the PDs whole on the purchase. Same goes for the auction just preceding it- the PE4 of October 27 of which a token $1 million was monetized. Which is why the bulk of the repurchasing activity was focused on the bonds NL0 and NP1, both of which were auctioned off this summer at substantially lower prices. Just these two cusips alone accounted for $2.5 billion of total monetization. What is more notable, if completely irrelevant until such time as the Fed has to sell well over $2 trillion in securities in addition to the $2 trillion in bonds that have to be issued by the US Treasury, is that the Fed's holdings now amount to $972 billion in total: to summarize: China added $15 billion in Treasurys in all of October. The Fed purchased almost the same amount this week alone. As we calculated previously, the Fed will surpass $1 trillion in holdings in under a week starting today.

 

 

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Wed, 12/15/2010 - 12:26 | 808209 Cookie
Cookie's picture

Like watching cancer cells grow

Wed, 12/15/2010 - 13:14 | 808383 MarketTruth
MarketTruth's picture

And as the Federal Reserve sucks the life from the hardworking American's teat, it is time for a full mastectomy.

Wed, 12/15/2010 - 12:26 | 808213 Fortunes Favor
Fortunes Favor's picture

The longer this continues the more compelling the precious metals investment story


The Three Phases of Every Secular Bull Market in Gold – By Gary Rosenthal

http://rosenthalcapital.com/blog/

Wed, 12/15/2010 - 12:26 | 808214 Caviar Emptor
Caviar Emptor's picture

At least they can show off about something. 

Happy Xmas: $3 Gasoline (1st time ever at Xmas!), coffee prices rising, OJ soon. 

 

Wed, 12/15/2010 - 12:29 | 808227 Bearster
Bearster's picture

This (along with the flip side of the coin, spending) is the real story.  Not "lack" of regulation, not position sizes, not the frequency of trades, not even Julian Assange.

Debt at every level of the system is unpayable and unsustainable.  The Fed is enabling the gov't to increase its debt for a while.

Wed, 12/15/2010 - 12:30 | 808232 Id fight Gandhi
Id fight Gandhi's picture

NASDAQ up, Dow up, s and p down. Huh. Quote problems?

Wed, 12/15/2010 - 12:34 | 808247 LongSoupLine
LongSoupLine's picture

Blythe problems.

Wed, 12/15/2010 - 12:31 | 808236 hambone
hambone's picture

Anybody know the total of all US T's in circulation?  Treasury direct is a pain in the ass.

Wed, 12/15/2010 - 12:33 | 808243 jus_lite_reading
jus_lite_reading's picture

WOW is all I can say.

Wed, 12/15/2010 - 12:40 | 808266 SheepDog-One
SheepDog-One's picture

WTF all is WELL! CNBC cheerleaders just said 'stocks have regained their 'poise' weird I didnt even see them red for a split second but whatever, and that 'stock watchers are optimistic', then Erin said 'bonds confuse me'....well what the fuk then its all good!!

Wed, 12/15/2010 - 12:43 | 808273 Sophist Economicus
Sophist Economicus's picture

B2 is the TRILLION DOLLAR MAN

Wed, 12/15/2010 - 12:44 | 808274 Ferg .
Ferg .'s picture

I'm certain that psychologically significant $1 trillion dollar level will be mentioned , repeatedly , by Ron Paul in his upcoming official confrontations with Bernanke . Forget about Denzel Washington and rampaging out of control trains , the real entertainment is not too far away .

Wed, 12/15/2010 - 12:50 | 808303 Id fight Gandhi
Id fight Gandhi's picture

Do like the fed does. Keep your credit good. Have enough cash to pay the minimum to borrow, roll over the debt to cheaper rates.

If you need to default, who cares. Just make sure you have physical gold stashed on hand.

Wed, 12/15/2010 - 12:51 | 808309 papaswamp
papaswamp's picture

Happiness in Greece today....

http://www.youtube.com/watch?v=c1XZL5CSWyA

Wed, 12/15/2010 - 12:59 | 808343 Id fight Gandhi
Id fight Gandhi's picture

Cnbc telling us how to dress in a suit. Ubs saying best way to dress.Fuck this media shit.

People think Jos a bank and mens warehouse has quality clothes. Is sweatshop shit marked up.

Zero hedge rules. Thank God we have a real news site.

Wed, 12/15/2010 - 13:01 | 808349 TexDenim
TexDenim's picture

Pretty soon there will be no need for markets. Chinese Central Bank will trade with Uncle Ben, and that will be it.

Wed, 12/15/2010 - 13:34 | 808463 Id fight Gandhi
Id fight Gandhi's picture

Theyll have rich tax. The poor and middle class just pay a tax that goes right to the rich.

Wed, 12/15/2010 - 13:12 | 808381 carbonmutant
carbonmutant's picture

"Since the last meeting 10-year rates are up close to 100 basis points! I am not sure what amazes me more — the fact that the Fed didn’t even MENTION the rate rise in [yesterday's] statement, or that many believe the various purchase plans have been “successful.”How can a program that was designed to drive rates lower be deemed a success if rates are now sharply higher?" -Rick Santelli

Wed, 12/15/2010 - 13:15 | 808388 trav7777
trav7777's picture

The Fed is gonna sell all these bonds at a loss...their acquisition of them was at the highest price possible

Wed, 12/15/2010 - 14:38 | 808721 IQ 145
IQ 145's picture

 Hey, nobody's perfect.

Wed, 12/15/2010 - 13:18 | 808399 Confused Indian
Confused Indian's picture

Dilemma of US markets, Fed will not let it drop, And even PDs cannot lift it anymore. Stalemate.

Wed, 12/15/2010 - 14:40 | 808731 IQ 145
IQ 145's picture

 Well, it's possible I suppose, but it looks more like a checkmate to me.

Wed, 12/15/2010 - 15:04 | 808814 cosmictrainwreck
cosmictrainwreck's picture

and even as we speak, they're trying the ol' 1:30-2:00PM GOOSE IT TO THE FINISH gambit.....as always. see where it goes today

Wed, 12/15/2010 - 13:25 | 808429 Confused Indian
Confused Indian's picture

Sometimes I wonder whether Ben actually ever studied economics.

Otherwise, why would you expect an economics grad (least to say) to let a reserve currency (or any currency) be worth the paper and ink only it is printed with?

Printing money has a cost. I hope he will realize some time?

Wed, 12/15/2010 - 13:28 | 808442 johny2
johny2's picture

Congratulations FED. That makes you the biggest holder of crap paper in the world, ahead of China and Japan

Wed, 12/15/2010 - 13:39 | 808488 DavidRicardo
DavidRicardo's picture

It'll reach $32 trillion, so why is this news?

Wed, 12/15/2010 - 13:52 | 808515 TruthInSunshine
TruthInSunshine's picture

To anyone that believes they will ever out-accumulate the Federal Reserve Bank, a private entity sometimes, and quasi-governmental enterprise at other times, a message from The Ben Bernank:

http://www.youtube.com/watch?v=l5VbaiQFdAU&feature=related

Wed, 12/15/2010 - 13:56 | 808563 ThirdCoastSurfer
ThirdCoastSurfer's picture

"the loss on the transaction to the Primary Dealers would have been so big not even multi point"

While the Fed has unlimited funds, the market does not have infinite holdings. 

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