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Fed Buys $5.9 Billion Of Recently Auctioned 5 YearTreasuries

Submitted by Tyler Durden on 08/17/2009 11:21 -0400

As part of today's $7 Billion Treasury OMO by the Fed, $5.9 billion of recently auctioned off 5 Years were purchased.

Note the highlighted CUSIPs:

912828KY5 is the 5 Year auctioned off on June 24, $40 billion offered, $11 billion of which was accepted by primary dealers. And poof - now they hold just a little over 50% of this issue (and we have not checked how much may have been repurchased in prior OMOs).

912828KV1 is the 5 Year auctioned off on May 27, $25 billion offered, $18.5 billion of which went to primary dealers.

It seems the Fed today is particularly concerned with thee 5 year point.

So, yes, we will have QE phasing out... But not yet.... not yet!

In the meantime -auction closed at 11am... And here is the market reaction:

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Mon, 08/17/2009 - 11:23 | 38734 AnonymousMonetarist

Piacere. It is a deep and moving honor to discuss the waste mangement business with all of youze.

Mon, 08/17/2009 - 11:31 | 38744 phaesed

Well, they want to move people back into risk and those 5 years had a juicy yield for an inversely correlated asset at 2.8%.... What remains to be determined is whether this will be the top or not. While I think the US can throw more cash at the problem, we've got too many cycles converging at the moment and China's bubble has been popped like Haynes' bottom will be will be later this year.... with a baseball bat. It really depends how everything goes down during Ramadan next week, most of the Street will be off on Vacation and I could see the markets running up and forming a solid double top that will get popped, but I'm not that prescient.

Mon, 08/17/2009 - 12:55 | 38868 logistics (not verified)

Someone has to lose money, and our goverment has decided to let the small mom and pop stores take the brunt of the losses.

Mon, 08/17/2009 - 15:53 | 39091 phaesed

Well them and the pitifully trained financial advisors who learned the canned "CFA" strategies of letting inflation be mistaken for performance. Manage your own money people, avoid the idiots.

Mon, 08/17/2009 - 11:35 | 38748 mgarrett84

This was my catalyst to take down -delta and sell some downside volatility. (totally expected)

Mon, 08/17/2009 - 11:43 | 38753 deadhead

thanks for keeping the heat on these phucks TD.

if you want a good chuckle today, look at denninger....his "talf" extension intro is absolutely priceless....i howled with laughter!

Mon, 08/17/2009 - 11:51 | 38770 mgarrett84

I dont think you can be mad at them. They are doing the only thing they can. The alternative is much more painful. I thank them for their actions. (there is an outside chance it may even work). Just need to up the dose of lithium into the water supply (lol).

Mon, 08/17/2009 - 12:08 | 38792 Assetman

I almost totally agree with you, mgarret.

My only wish is that they could be more transparent about what they are doing... they probably can't do that either, as what they are trying to pull off is in the grey areas of the law.

If you happen to find you a supply of lithium, could you send some to Colorado for us? Thanks!

Mon, 08/17/2009 - 12:19 | 38805 mgarrett84

If they are more transparent it will defeat any expectations tweeking and psychological games that can help the effort. Plus myself and every other PM and trader douchebag will fade the hell out of what they are doing.

Its a rough game balancing a bearish macro view and the hopes that we are successful in rescuing the economy. Almost like I am rooting against myself.

I'll let you know if I unearth any lithium deposits ( in the meantime you can always smoke a cuban, they are full of the stuff).

Mon, 08/17/2009 - 13:22 | 38925 Anonymous