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Fed Closes $5.4 Billion POMO, Biggest Issue Monetized Is 2 Year Auctioned Off Two Months Ago

Tyler Durden's picture




 

Today's POMO, which is getting absolutely no coverage on CNBC, now that the new POMO regime has no bearing on equities and thus can not be sold as bullish development, has closed. Brian Sack bought back $5.4 billion in debt, at a whopping 6.2 submitted to accepted ratio, implying the PDs are once again positioned weakly. Of course, one look at the ES is sufficient to see this. What is most relevant is that the bond monetized the most to the tune of $1.6 billion, was the 2 year PH7 due 8/31/2012 which was auctioned off by the US Treasury... 2 months ago.

 

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Tue, 11/16/2010 - 12:12 | 731012 Max Hunter
Max Hunter's picture

10 yr at 2.94... Wasn't the QE to bring rates down?..

Tue, 11/16/2010 - 12:16 | 731031 bob_dabolina
bob_dabolina's picture

Only in the matrix.

Tue, 11/16/2010 - 13:50 | 731170 hedgeless_horseman
hedgeless_horseman's picture

We are caught in a tractor beam...It's pulling us in.

 

Obama: "I have a very bad feeling about this."

Summers: "Turn the ship around."

Bernanke: "Yeah, I think you are right.  Full reverse.  Sack, lock in the auxiliary power.  Sack, lock in the auxiliary power!"

Brian Sack: "Rrrrraaaaggghhh!"

Obama: "Why are we still moving towards it!"

Bernanke: "We are caught in a tractor beam...It's pulling us in."

Obama: "There is gotta be something you can do!"

Bernanke:  "There is nothing I can do about it kid.  I am at full power.  I'm going to have to shut down.  But they are not going to get me without a fight."

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

 

Tue, 11/16/2010 - 12:40 | 731121 greased up deaf guy
greased up deaf guy's picture

ALL YOUR BONDS ARE BELONG TO US...  MAKE YOUR TIME...

Tue, 11/16/2010 - 12:42 | 731132 jus_lite_reading
jus_lite_reading's picture

I'm surprised no one is commenting on the fact that they are all over an issue auctioned off just 2 MONTHS AGO!!!!!

I suppose this has to do with the explosion in rates, coming to a market near you...

Thus my exit out of T's a month ago...

Tue, 11/16/2010 - 12:14 | 731022 Boilermaker
Boilermaker's picture

Bottom of the 9th, down 10 runs, full count, nobody on base, and the pitcher batting.

We...are...just...about...

Tue, 11/16/2010 - 12:45 | 731143 BlackChicken
BlackChicken's picture

Screwed...

Here is a simple explanation of the current predicament:

Bernanke's QE Explained - "Screw You America!"

http://market-ticker.org/akcs-www?post=172126 

Tue, 11/16/2010 - 14:04 | 731490 MachoMan
MachoMan's picture

Exactly...  as applied to the present situation, the "runs" from the example represent the wealth gap...  we will not make up the difference in time.  They played a spectacular game.

Tue, 11/16/2010 - 12:15 | 731025 kaiten
kaiten's picture

A mere $5,4bn monetized? It´s $153 trillion, stupid.

 

http://noir.bloomberg.com/apps/news?pid=20601039&sid=arTn6W22FX.A

Tue, 11/16/2010 - 12:18 | 731026 Dr. No
Dr. No's picture

Im thinking the genie is out of the bottle.  I expected TLT to rally with EURO and POMO, she is falling like a stone. Bull market over. done. end of euro may get some treasury buyers, but not today.

 

EDIT: is the AAPL falling from the tree?  Looks like could be heading below $300....

Tue, 11/16/2010 - 12:19 | 731036 Boilermaker
Boilermaker's picture

Even the ever-resilient REITS have been taking a pounding.

You KNOW, when they let that go...it's over.  And they have officially let it go.

It's fucking over...right now.  I'm on record.

Tue, 11/16/2010 - 12:20 | 731038 Dr. No
Dr. No's picture

I dont think its a flash crash either.  A flash crash implies accident.  This is ligit.

Tue, 11/16/2010 - 12:22 | 731047 Boilermaker
Boilermaker's picture

Yep.  Everyone is taking their ball and going home.  The game is over.

 

Tue, 11/16/2010 - 12:36 | 731106 Turd Ferguson
Turd Ferguson's picture

maybe this si for real this time?

Tue, 11/16/2010 - 12:21 | 731044 Xedus129
Xedus129's picture

cue fat lady?

Tue, 11/16/2010 - 12:25 | 731059 Boilermaker
Boilermaker's picture

Susan Boyle?  I *almost* bought her x-mas CD...almost...

Tue, 11/16/2010 - 12:17 | 731030 TumblingDice
TumblingDice's picture

This is long term bearish for anything of value.

Tue, 11/16/2010 - 12:19 | 731037 DollarDive
DollarDive's picture

Is any of this due to new gold margins taking effect ? 

Tue, 11/16/2010 - 12:20 | 731039 RobotTrader
RobotTrader's picture

Looks like the outright collapse in commodity prices is putting a bid under the retail names today:

 

Tue, 11/16/2010 - 12:22 | 731045 doolittlegeorge
doolittlegeorge's picture

actually "it's the deflation that's suppose to bring rates down while the Fed pours hundreds of billions into the Treasury in profits."  I'm sorry..."you thought Wall Street only existed on Wall Street"?  Consider this a valuable lesson:  only Wall Street thinks "greed only matters here."  Now..how about a discussion about what "the College of Cardinals" means in "American."  Interestingly..."the word Afghanistan keeps coming up."

Tue, 11/16/2010 - 12:22 | 731046 RobotTrader
RobotTrader's picture

Outright clamoring for U.S. dollars continues unabated.

Looks like an exact repeat of 2008.

Tue, 11/16/2010 - 12:29 | 731076 tmosley
tmosley's picture

Except, of course, for the fact that gold and silver are 40% higher than they were back then, and faith in the dollar as a reserve currency remains only through habit.  

Eh, but who cares about that, let's all go buy stocks and get frontrun by HAL-12000!

Tue, 11/16/2010 - 12:30 | 731078 spartan117
spartan117's picture

Look at all those gaps that need to be filled.

Tue, 11/16/2010 - 12:43 | 731135 trav7777
trav7777's picture

yeah, it does.  Every previous time, the Fed has stepped in with a liquidity spigot and reversed the hell out of this.

Decisions, decisions...

Tue, 11/16/2010 - 12:23 | 731050 shushup
shushup's picture

Are the PD's allowed to short equities if they want with their POMO money?

Tue, 11/16/2010 - 12:27 | 731063 TumblingDice
TumblingDice's picture

I believe Jamie Dimon has "long only" rules at JPM.

Tue, 11/16/2010 - 12:27 | 731064 Boilermaker
Boilermaker's picture

You're allowed to do anything you want when you're the boss.

Tue, 11/16/2010 - 12:26 | 731060 pazmaker
pazmaker's picture

..and yet the markets are down closing n on 2% today!  Bernake the game is over!

Tue, 11/16/2010 - 12:35 | 731105 Randall Cabot
Randall Cabot's picture

it's only 11:30AM! POMO money being put into position, getting ready to charge-like Zhukov at Stalingrad!!!

Tue, 11/16/2010 - 12:28 | 731066 Prof Gulliver
Prof Gulliver's picture

It's amazing that past POMOs were so successful. The bond market is so huge, even a trillion dollars of Bennie Bucks is meaningless except for the psychological benefits and spurring genius front runners, who, as always, end up holding the bag before long. Ben should spend his dollars where it can do the most good: goosing S&P futures.

But the Fed may get its lower rates anyway. I think the Ben Bernak (love that cartoon) knows things elsewhere are going to blow sky high soon, sending panicked investors back into the loving arms of Mama T-Bonds.

Tue, 11/16/2010 - 12:29 | 731069 HarryWanger
HarryWanger's picture

Retail looks strong again - and it should on the heels of yesterday's Retail Sales number and what we're seeing in retail earnings report.

IP was pretty decent on the manufacturing component. This looks like a trap here. My guess is we see a strong turn around here today to continue the market run. Ireland is officially off the tabel now until Spring 2011. That should help open the trap door on the bears here as well.

Tue, 11/16/2010 - 12:30 | 731079 Boilermaker
Boilermaker's picture

Sounds like a great buying opportunity for you.

Tue, 11/16/2010 - 12:32 | 731086 HarryWanger
HarryWanger's picture

AAPL at 300 is pretty irresistible. Not going to get that chance, well, now that it bounced, probably again until a split.

Tue, 11/16/2010 - 12:35 | 731099 Dr. No
Dr. No's picture

Youll get your chance.  Bets are she goes down to 50DMA minimum.

Tue, 11/16/2010 - 12:35 | 731103 Prof Gulliver
Prof Gulliver's picture

Hmmm, just a few days ago you were SELLING AAPL at 300. Harry, I can't keep up with your investment advice. You're not Cramer, are you?

Tue, 11/16/2010 - 12:41 | 731124 HarryWanger
HarryWanger's picture

Long and short stocks all the time. Don't post them here. But if I'm on here I'll throw out a suggestion. 300 was an excellent entry point as time will certainly show.

Tue, 11/16/2010 - 12:47 | 731152 shushup
shushup's picture

In Mid Oct. 300 was a great entry.

Tue, 11/16/2010 - 12:45 | 731139 PolishHammer
PolishHammer's picture

they might be on to him.....

Tue, 11/16/2010 - 12:45 | 731140 shushup
shushup's picture

This should be the beginning of a big move down. AAPL will absolutely break 300.

Tue, 11/16/2010 - 13:21 | 731297 HarryWanger
HarryWanger's picture

Very doubtful. If it didn't break this morning, it won't. Bounced nicely and moving higher now.

Tue, 11/16/2010 - 13:32 | 731346 Bill Lumbergh
Bill Lumbergh's picture

In early October it was as far away from the 200 EMA as it was in May before the flash crash...since that moving average acts as a "magnet" I think a test of the 50 EMA is more than likely especially since the 20 EMA failed.

Tue, 11/16/2010 - 12:32 | 731090 Bill Lumbergh
Bill Lumbergh's picture

Without knowing what PDs are doing with new cash combined with a falling Euro equals problems for the equity market.  Funny how talk of hyperinflation has been incessant now after the market has rallied so much from 2009 yet in the depths of the financial collapse outright deflation looked imminent.

Tue, 11/16/2010 - 12:37 | 731111 Turd Ferguson
Turd Ferguson's picture


If interested, lots of updated thoughts at:

www.tfmetalsreport.blogspot.com

Sorry for the spam but I'm out of time for today so I can't re-type here.

Tue, 11/16/2010 - 12:44 | 731137 virgilcaine
virgilcaine's picture

tlt puking up the pomo.. force fed gruel..

Tue, 11/16/2010 - 12:51 | 731142 plocequ1
plocequ1's picture

Every day this market is like the movie The China Syndrome when we watch Jack Godell ( Jack Lemmon) on his knees praying to god, Sweating profusely Hoping that water temperature doesn't go in the red zone and doing every thing he could , Turning every knob and switch imaginable to prevent a meltdown. " Please God"...

Tue, 11/16/2010 - 12:57 | 731195 Battleaxe
Battleaxe's picture

QE lite proceeds went to boost the markets, to whet everyone's appetites about what QE2 could do. Now that QE2 has been implemented, the proceeds are going into the personal accounts of the "insiders". Big pphffftttbwbwbwbwbw! (untied inflated balloon being let go)

There haven't been any free markets for years. They set it up to make sure that ONLY the insiders make any money. This QE2 thing was the biggest sucker job yet!

Tue, 11/16/2010 - 13:24 | 731302 the grateful un...
the grateful unemployed's picture

QEII is about government buying government debt. It all flows downhill, for instance the San Diego Chargers have been trying to get a new stadium for the last decade. They currently play in Qualcom (used to be hot high tech company, remember that bubble?) anyway the owners Dean and Alex Spanos are R.E. investors, and they want to boost the teams bottom line. Naturally the taxpayers are reluctant, and defeated a 1/2 cent sales tax which was sold as a stop gap to cuts in vital city services.

Viola, suddenly the downtown redevelopment agency has NEW money to work with, and that opens the door for Fabiani (former Clinton Attorney) to push the idea for the umpteenth time. Of course its corporate welfare, but please don't think of it that way, some construction workers have a job  for a couple months, and we get to boost our team asset value without actually putting a decent team on the field, which is hard, as Gene Klein, former owner once explained, I would rather own racehorses than football players. And so he did.

So there are obviously some rich mothers who stand to boost their bottom line, will Charger tickets go up (they have been blacked out all but one home game so far this year) with the new digs? Hey the rich get richer, although Charger management did famously play hardball with a couple of their top assets this year. See Vince Jackson. So the income disparity gap is widening. Once a player gets uppity, management cancels his contract and bars him from a trade. Well this is why we go on strike children.

But no one is telling us how to game QEII, and Mr Market seems confused as well. (but R.E. should benefit)  Well Mr Gross, come on and tell us, how do we front run the Fed on this one?

Tue, 11/16/2010 - 12:58 | 731201 goldmiddelfinger
goldmiddelfinger's picture

AAPL ain't worth an 3 Irish guineas, 2 fat hens or 5 nokia 3510s. Who listens to the beatles anyway? Yellow submarine?  Ah there's the call arseworms. Dive, dive all dive.

Tue, 11/16/2010 - 13:07 | 731244 plocequ1
plocequ1's picture

Please dont mess with my Beatles. Rubber Soul is a kick ass album

Tue, 11/16/2010 - 13:23 | 731304 goldmiddelfinger
goldmiddelfinger's picture

rubber being an integral part of your lifestyle?

Tue, 11/16/2010 - 13:47 | 731418 StuartScottsLazyEye
StuartScottsLazyEye's picture

Certainly not part of Antonio Cromartie's lifestyle.

Tue, 11/16/2010 - 13:01 | 731211 tewkatz
tewkatz's picture

Time for a refreshing afternoon POMO stick-save?

Ben, please announce that the world needs to calm down and luxuriate in the verdant-breeze of the printing presses' cooling fans...

Tue, 11/16/2010 - 14:06 | 731505 Ned Zeppelin
Ned Zeppelin's picture

It's a POMO day and the market is red, 10 yr at 2.94, AAPL down 5.  . .   WTF?  

Tue, 11/16/2010 - 14:26 | 731591 Randall Cabot
Randall Cabot's picture

Every day is POMO day-POMO days just ain't what they used to be!

Tue, 11/16/2010 - 15:06 | 731767 Battleaxe
Battleaxe's picture

The primary dealers used to pump the markets with the POMO proceeds under QE lite. Under QE2 they use the money for bonuses:

http://www.zerohedge.com/article/new-york-comptroller-anticipates-larger-average-wall-street-bonus-2010

 

Tue, 11/16/2010 - 15:52 | 731940 max2205
max2205's picture

the amount offered to the fed should be charted... shows the desperation to unload anything and everything to the fed

Tue, 11/16/2010 - 16:31 | 732119 TruthInSunshine
TruthInSunshine's picture

POMO is sooooo 2000-and late...

Tue, 11/16/2010 - 17:27 | 732381 gkm
gkm's picture

Has no one ever heard of "buy the rumor sell the news"?

Tue, 11/16/2010 - 21:43 | 733012 CHaas
CHaas's picture

I apologize for the ignorance, but can someone briefly explain the POMO process, along with the importance of the thread title?  Thanks in advance.

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