Fed Floods Market With $3.9 Billion In Fresh Monetization-Based Liquidity, QE Lite Record

Tyler Durden's picture

The Fed is now getting desperate: today, Brian Sack gobbled up nearly $4 billion in bonds maturing between 2014 and 2016, the highest single day tally in this latest iteration of QE, and resulting in the lowest Submitted/Accepted ratio of QE Lite of 4.3x, indicating that the FRBNY markets team was in a rush to push as much liquidity as it could to the PDs so they latter could go out and push the beta wave a couple of inches higher. As for the bonds, the bulk of the purchases was in the 2014-early 2015 range. We have yet to do the Cusip analysis, but we wouldn't be surprised if this contains a bunch of 5 Year bonds that were auction as recently as a month or so earlier, further validation that Geithner's promises a year ago that the Fed would never monetize bonds was nothing but lies. And even so, the market can barely stay green. Today will likely be an interesting day, testing the ever-declining half life of bank intervention, in both FX and bond markets (but, don't worry, central banks and especially the Fed, never, NEVER, get involved in stock manipulation).

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overbet's picture

Here is the real story of the day:

The NYSE has determined to cancel all trades in NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3 (NWI PRC), executed at or above $10.65 between 09:48:05 am and 09:50:52 am ET today.

This decision is not appealable.

They are busting trades of an algo error that occurred a mere 3.5% away from the market, not even close to the erroneous trade policy guidlines but during the flash crash investors had to eat the losses caused by the same system up to 20% Come the fuck on

EscapeKey's picture

I don't know why they don't just cancel all trades, where the house doesn't win?

HelluvaEngineer's picture

This is America goddamit.  We make the rules up as we go. 

Sniper's picture

I get cancelling the 200,000 and 9,999 prints but 3.5% is kind of dumb. From the T&S, looks like it was only 300 shares at 10.91, two prints on Arca and one on NYSE.

Millivanilli's picture

“I would rather earn 1% off a 100 people's efforts than 100% of my own efforts.”

John D Rockefeller

ZIRP and overall currency manipulations are all about one thing ultimately, robbing from the masses labor and efforts through the debasement of their money.

We have no recourse when our means of exchange are tawdry pieces of paper and base metals. They can pay us NOTHING in INTEREST for our hard earned money in order to do EXACTLY WHAT CROOKS LIKE ROCKEFELLER DID.

They've got us by the short and curlies on this folks. We need to collectively demand that CONgress DISSOLVES THE FEDERAL RESERVE. They have destroyed our money incrementally over time. It is nothing but THEFT.

Sudden Debt's picture

It's not the endgame...

it's the end OF THE GAME.

vote_libertarian_party's picture

Intervention failure...is...bullish???


buy buy buy

Buzz Fuzzel's picture

Beans, bullets and a warm dry place to sleep.  Are you ready?

Pope Clement's picture

"Loose shoes, tight pussy and a warm place to shit" U.S. Secretary of Agriculture Earl Butz in 1982

Buzz Fuzzel's picture

Luxury in time of great deprevation will not be allowed until the redistribution of misery is complete.

Battleaxe's picture

Everything is bullish. Good news, bad news, beat expectations, don't beat expectations,..... BUY, BUY, BUY!

All because people think the Wizard of Oz (Ben) is more powerful than he really is.

HedgeFun's picture

Thats it.  I'm going long paper and ink companies.

MarketTruth's picture

Go long Internet bandwidth, 2TB hard drives and memory chips. ;)

slyfox's picture

by far the funniest comment I have seen on here, still laughing. nice!

the not so mighty maximiza's picture

Amazing info. What is the back up plan when interventions start failing regardless of size?

MrVincent's picture

Helicopter drops from captain Ben. Literally!

espirit's picture

Helicopter drops captain Ben!

EscapeKey's picture

Thereby solving the problem once and for all.

SheepDog-One's picture

WOW talk about desperation! And its not having much effect either, law of diminishing returns is a bitch.

skohiu's picture

it'll all come in at 2pm EST into the close.  booyah!

Boilermaker's picture

PHEW...I thought they would go for the full $4B.


MarketTruth's picture

So a one day liquidation/infusion of $4,000,000,000 only gets the market up 30/2 points? Velocity of money to near zero!

Bearster's picture

I don't think buying bonds from PD's can have much, if any, long term impact on the stock market.  The PD's are buying bonds at auction and then selling them to the Fed.  They don't need the Fed's money to buy stocks, they could just go and buy stocks instead of bonds in the first place.

Also, if a PD buys, say, $1B worth of bonds at a Treasury auction, and then 3 months later, the Fed buys those bonds from the PD at, say, $1.008B, that is a profit of $8M in 3 months, $32M annualized, or 3.2%.  That is the incremental money that the PD could, if they wished, put into buying stocks.  And they still have the calculus of what is the upside of the stock market vs. downside, and is this a good place for the bank's capital?  Particularly when they can make risk-free profits in the Treasury market!

I think we have market volatility because:

1) regular investors are fleeing

2) one group of speculators thinks that the Fed can inflate asset prices at will

3) another group of speculators sees the greater depression unfolding

It is war between groups 2 and 3.  Perhaps on POMO days, group 2 is emboldened?

SDRII's picture

PDs only a conduit to increase base money - where exactly is the fed "getting" this money that is being funneled to the Treasury to support the transfers that keep the income number afloat?

orangedrinkandchips's picture

man, the volatility in everything (read: all one stock- every index etc) is crazy today...i feel like "they" are getting desperate to keep this up....i wouldnt want to be long here...at all...

goldmiddelfinger's picture

Drive it like ya stole it....especially since ya did

Nick Utah's picture

Ben traded helicopter for stunt plane.

Fly it like you stole it!


Mitchman's picture

Bruce K was right yesterday-the pace of things is picking up.  Wonder what the next shoe to drop will be?

Spalding_Smailes's picture

I think it will come in the $2.8 trillion municipal-bond market.

nope-1004's picture

Geithner's promises a year ago that the Fed would never monetize bonds was nothing but lies


Send the pric to jail.



goldmiddelfinger's picture

Convicted tax cheats always tell the truth

Bearster's picture

what about unindicted tax cheats?

DaveyJones's picture

remember, unindictment is the modern financial reform. S&L scandal, a thousand+ indictments, latest scandal?   

Problem Is's picture

Turd "Gold"
Thanks. I missed that post...

Hard1's picture

As I posted on the POMO news a couple stories ago.  The Japanese also contributing to the USD monetization since they need to park all the USD they get from selling yen in treasuries.

wowser22's picture

Then pray tell, why are treasuries getting blasted today?

traderjoe's picture

Just like any future stimulus should be called the third stimulus (Bush tax rebates #1), future QE's should be #3. This is QE2. No matter that the "monetary base is staying constant", QE1 promised an exit strategy. There's no exit from this vortex. 

Go silver - break the cartel!

Caviar Emptor's picture

Market walking on eggshells. If claims disappoint tomorrow, it'll be a hat trick of bads. Look out. 

HarryWanger's picture

Claims will disappoint but I'm not sure what you mean by a "hat trick of bads". 

Boilermaker's picture

Hat Trick = 3

You obviously aren't a sports person.

HarryWanger's picture

I know what a hat trick is but what are the other two "bads"? 

Caviar Emptor's picture

Industrial Production, NY Fed, Claims = Hat Trick of Fed-sensitive news that may force the hand. There's downside to the Fed acting, and not acting.

traderjoe's picture

IP seems to be considered in-line, as the previous revision is being once-again ignored (especially not looking at the serial revision process). 

I wonder what will happen with claims, since last week was a holiday week. Lots of opportunity for estimations, seasonalities, etc. And who fires someone right after a holiday? And isn't tomorrow a POMO day too?