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Fed Injects Record $5 Billion Into Stock Market With Today's POMO

Tyler Durden's picture




 

Today's POMO is over, and the result is a whopper: Brian Sack has just injected a record for QE Lite $5.2 billion in stock, in order to complete all the elements of today's orchestrated Obama Town Hall meeting, during which the president is now fully expected to announce that he not only managed to end the recession singlehandedly (what an opportune time for the NBER to announce its results), but that stocks are now ripping every single time he appears on TV (same goes for gold, oil, and pretty much everything else: and furthermore, Treasurys are unchanged, refuting all of Mr. Pisani's BS about capital reallocation in process). $5 billion today, add another $6 billion on Wednesday and Friday, lever up 30 times and you have some $300 billion in free buying given to the Primary Dealers so they can ramp the S&P to 1,150 by the end of the month. Job well done Mr. President. Too bad nobody but Wall Street and a few HFT prop desks care about the stock market any more.

 

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Mon, 09/20/2010 - 11:14 | 591977 Hephasteus
Hephasteus's picture

Though shalt not load thine market up with tons of shitty low ball puts sayeth the fed.

Mon, 09/20/2010 - 11:49 | 592092 unwashedmass
unwashedmass's picture

 

how in the world are they going to get out of this mess without a mega-crash?

Mon, 09/20/2010 - 12:22 | 592210 Cognitive Dissonance
Cognitive Dissonance's picture

Depends upon what you mean by "crash".

Are you saying everything or just the market? If the market, are you saying the stock market or the bond market. If the stock market, are you saying US/Europe/UK or are you saying emerging countries. If bonds, are you saying Treasury, mortgage or corporate?

Just asking. IMHO, they all won't plunge at the same time.

Mon, 09/20/2010 - 12:27 | 592224 EscapeKey
EscapeKey's picture

My guess would be "Just the currency markets".

Wahey, only 1/3. It's not so bad.

Tue, 09/21/2010 - 03:56 | 594207 Spirit Of Truth
Spirit Of Truth's picture

I believe the May 'Flash Crash' may have been a consequence of what the federal authorities are creating.  The potential for massive air pockets, where there are no bids because there's no underlying common sense of worthwhile valuation, is what happens when stock prices have been goosed by hidden Fed interventions.  Why doesn't Helicopter Ben just announce that it is now the policy of the Federal Reserve to keep the DJIA above 10,000 come hell or high water?  After all, it's a game of maintaining collective confidence no matter what the fundamental realities might be since investor confidence is deemed important to general economic well-being.  Maybe it's best just to have the government make the public's decisions for them since We The People are not well suited to care for ourselves.  As Art Cashin said, "There's no libertarians in a market crash".  Ben Bernanke's motto is, "there's no place for liberty where markets could crash".  The moral hazard of government bailouts of stupidity have engendered ever greater stupidity since the governments themselves are the dumbest of all for not valuing freedom.

Mon, 09/20/2010 - 11:15 | 591979 DaveyJones
DaveyJones's picture

five billion here, five billion there, pretty soon you're talking real money

Mon, 09/20/2010 - 13:17 | 592370 Assetman
Assetman's picture

ARRRR!!!, Mr. Squid!

You know, as long as the Fed keeps buying, the stock market is up, and NBER say there is no recession.... it must mean that the Obamas are doing a bang up job and should be re-elected without question.

Or not.

Mon, 09/20/2010 - 11:16 | 591984 Internet Tough Guy
Internet Tough Guy's picture

Commodities are up, up, up. Cotton is $1 per pound!

Dressed in rags this winter, bitchez.

Mon, 09/20/2010 - 11:19 | 591991 Calvin Jones an...
Calvin Jones and the 13th Apostle's picture

But ... but .. but . there isn't supposed to be any inflation!!  The Fed says so!

Mon, 09/20/2010 - 12:13 | 592177 Hulk
Hulk's picture

Cotton thrown out of the calc, replaced by burlap....

Mon, 09/20/2010 - 14:11 | 592516 hardcleareye
hardcleareye's picture

good post, for more detail on this go to the oil drum http://www.theoildrum.com/node/6957 

Mon, 09/20/2010 - 14:52 | 592606 Hulk
Hulk's picture

I did Davey, but thanks for reminding me. Just sitting here shaking my head, the fucking academics are going to be the death of us. Before Chu was energy secretary, I used to have conversations with him on energy and realized back than that he was an ideologue. As I have stated before Chu's main concerns are greenhouse gases and global warming. Nuclear is a bad word for him. Our inability to deal with any of our problems is just unfucking believable, yet so consistent....

Mon, 09/20/2010 - 14:57 | 592611 DaveyJones
DaveyJones's picture

so, if I understand it, if you're not going to be believed, at least be consistent. That's the only area where our government's making real progress.

Mon, 09/20/2010 - 15:43 | 592808 Hulk
Hulk's picture

Exactly. "A" in consistency. "A" in destruction of the country. "F" in every other gradable category... 

Mon, 09/20/2010 - 16:48 | 593018 Joao Gulan
Joao Gulan's picture

The peak oil frenzy ignores the excess of natural gas that's available.  Robert Hirsch's remarks refer to the energy situation before current technology created a glut of natural gas world wide.  BTW my brother is a senior engineer for Devon, and my sister just retired from Chesapeake.  Looks like political tunnel vision to me.

Mon, 09/20/2010 - 13:23 | 592387 TheGunn
TheGunn's picture

Rags to bitchez.  It's a movement!

Mon, 09/20/2010 - 11:16 | 591986 xempik
xempik's picture

Can someone give me a rough estimate on how much longer this pumping can go on... until USA defaults? When could that be...?

Mon, 09/20/2010 - 11:20 | 591994 TradingJoe
TradingJoe's picture

IT already DID!

Mon, 09/20/2010 - 11:22 | 592004 Internet Tough Guy
Internet Tough Guy's picture

Breaking point this winter. Look at the cost of commodities; cost of many grains have almost doubled in 6 months.

Mon, 09/20/2010 - 11:17 | 591989 pat53
pat53's picture

1150 by months end? Shit we'll be there by the weeks end, probably sooner.

Mon, 09/20/2010 - 11:20 | 591998 Calvin Jones an...
Calvin Jones and the 13th Apostle's picture

Probably tomorrow.  But there is that old adage.  The bigger they are, the harder they fall.

Mon, 09/20/2010 - 11:21 | 591999 TradingJoe
TradingJoe's picture

we're some 14 points away, it's today or Wednesday, bubba!

Mon, 09/20/2010 - 11:26 | 592020 London Dude Trader
London Dude Trader's picture

Ben Shalom will make sure ES breaks through 1150 tomorrow. 

Mon, 09/20/2010 - 11:20 | 591992 Sudden Debt
Sudden Debt's picture

POMO! WE NEED MORE POMO!!

POMO IS THE NEW PPT!

Mon, 09/20/2010 - 11:20 | 591996 Spartan
Spartan's picture

I have to double down on my 3 x leveraged bullish Oil ETF so I can assist the Fed in its mission to eliminate American's middle class...

Mon, 09/20/2010 - 11:28 | 592029 Sudden Debt
Sudden Debt's picture

GO AND ASSIST!!

 

just put your money in a barrel filled with petrol and light it on fire.

By getting rid of all that surplus money, you will be able to stop hyperinflation for 0.0000000000000000000001 seconds for every 1000.000$!

 

GO AND ASSIST!!

Mon, 09/20/2010 - 11:22 | 592005 Traianus Augustus
Traianus Augustus's picture

Anyone else get the feeling that we are watching a massive tidal wave surging to the shore while standing on a beachfront balcony?!?!?!

Mon, 09/20/2010 - 11:26 | 592019 TradingJoe
TradingJoe's picture

We all get that feeling Traianus, but only few are preparing, too bad!

Mon, 09/20/2010 - 11:23 | 592006 Turd Ferguson
Turd Ferguson's picture

I'm just gonna keep posting this. I'm beyond rational thought.

http://www.youtube.com/watch?v=5akEgsZSfhg

Mon, 09/20/2010 - 11:23 | 592011 TradingJoe
TradingJoe's picture

Boys, we all know how this is going to end, let's focus on making some money, why should POMO be only for the fraudsters?!?! This is how I fueled and still fuel my shorts, by getting long ahead of POMO and then sell the crap! When the big day comes we need a lot of dough to get the fuck out'a here!

Mon, 09/20/2010 - 12:33 | 592246 EscapeKey
EscapeKey's picture

This shit could literally collapse any minute. There's no way I'm wiring cash into a brokerage account, only to have them go instantaneously bankrupt.

Mon, 09/20/2010 - 12:49 | 592304 Cruel Aid
Cruel Aid's picture

I had to review this a couple of days ago while considering consolidating accts. Looks safe for now.

http://www.finviz.com/quote.ashx?t=ibkr

Mon, 09/20/2010 - 11:24 | 592012 dickbar
dickbar's picture

"Too bad nobody but Wall Street and a few HFT prop desks care about the stock market any more."... aha... but they might care a little more as the S&P takes out 4-month highs today, Apple (20% of the nasdaq) makes a new all-time highs as people queue round the block to buy phones to send to qatar, south africa, india, china... where they pay double the UK price for them... Treasury futures have broken the uptrend even despite FED support... people might realise that any money they might have, might be safer in stocks than in the bank, or in bonds... personally, i realise this

Mon, 09/20/2010 - 11:24 | 592016 Robslob
Robslob's picture

This is a perfect set up...for what I have no freaking idea?

Mon, 09/20/2010 - 11:39 | 592067 JR
JR's picture

the big picture...

The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole… Their secret is that they have annexed from governments, monarchies, and republics the power to create the world’s money….- Prof. Carroll Quigley renowned, late Georgetown macro-historian (mentioned by former President Clinton in his first nomination acceptance speech), author of Tragedy and Hope. “He [Carroll Quigley] was one of the last great macro-historians who traced the development of civilization…with an awesome capability.” – Dr. Peter F. Krogh, Dean of the School of Foreign Service (Georgetown)

The purpose of this financial crisis is to take down the U.S. dollar as the stable datum of planetary finance and, in the midst of the resulting confusion, put in its place a Global Monetary Authority [GMA - run directly by international bankers freed of any government control] -a planetary financial control organization”- Bruce Wiseman, author of Crisis by Design.

Mon, 09/20/2010 - 12:22 | 592207 Pedro
Pedro's picture

That's pretty funny Robslob.

Mon, 09/20/2010 - 11:26 | 592021 Don Levit
Don Levit's picture

I am not familiar withn thios type of transaction.

I know this sounds pretty naivbe, but is the Treasury buying stocks to artificially lift the market?

If so, an asset, stock, is secured, but a liability , Treasury debt, is also created.

This is a wash for accounting purposes, but it looks like only the asset part, the raising of the stock market, is affected.

Don Levit

Mon, 09/20/2010 - 11:35 | 592048 43 Steelie
43 Steelie's picture

Don,

I have a similar question as I am not quite following how this conclusion is being drawn.

So the Fed is openly asking for bids on a specified number/type of treasuries that are being purchased. PDs line up to submit their bids. The bids get filled as newly printed dollars are effectively exchanged for legacy treasuries. ZH is speculating that the newly printed dollars are being used by the PDs and its clients (HFs) to purchase ES Minis or other long equity securities.

First question/request is to correct me if I'm wrong with any part of that process.

Second question is, why are the PDs and its clients waiting for POMOs to pump the market. Don't they have enough excess reserves which they could use to effectively do this on any given day? Why wait for these (relatively) minuscule purchases to occur?

Mon, 09/20/2010 - 21:32 | 593720 Ned Zeppelin
Ned Zeppelin's picture

Let's not forget - the Treasuries (really a mechanism for short, medium and long term storage of dollars so as to manage the supply) are "purchased" or "swapped" if you want to call it for freshly pixelated cash, now in the accounts of the PDs, who are also TBTFs and part of the Treserve Syndicate.  Next, the cash proceeds are levered up by essentially non-recourse, ultra low interest loans from the Federal Reserve system (try on 30X for size) and the resulting gross cash and loan proceeds are used to acquire "risk" assets, namely equities both directly and in their derivative forms.  By the way, these purchases are entirely backstopped by the Federal Reserve in the form of a "no loss" guarantee, which needs to be understood as a "reward for compliance, loyalty and skill of execution" in carrying out this asset reflation project. 

 

I know you're thinking, mighty patriotic of those TBTFs to take on this noble, selfless work, but that's just the kind of people they are. 

 

This sort of thing can go on for a looooooooong time, I fear. 

Mon, 09/20/2010 - 11:36 | 592055 subqtaneous
subqtaneous's picture

I am not familiar withn thios type of transaction.

 

It's called hush money . . . you know, there are an awful lot of pitchforks and torches lying dormant which could make for an even greater liability than a few extra T-bills, in the grand scheme.

Mon, 09/20/2010 - 11:27 | 592022 Horatio Beanblower
Horatio Beanblower's picture

AEP's latest...

"Here is a back-of-an-envelope guess by David Greenlaw at Morgan Stanley on what the Fed can expect from a second blitz of bond purchases, or `Shock & Awe’ as he calls it.


If Ben Bernanke does a further $2 trillion (on top of the $1.7 trillion already in the bag) the yield on 10-year US Treasuries will drop 50 basis points to around 2.2pc."

 

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100007647/qe2-in-round-trillions/

Mon, 09/20/2010 - 11:29 | 592034 Miramanee
Miramanee's picture

The U.S. will NOT default, operationally speaking. In a fiat currency system, the FED has the operational capacity to add digits to reserve accounts ad infinitum. HOWEVER...there will be far more dramatic consequences over the long term in light of our government's decision to support and promote a terminally ill money-as-debt economic system. In fact, default would be a metaphorical walk in the park compared to what is coming. Remember, ALL credit "booms" end in busts, and the current credit and debt expansion is by far the largest in history. Additionally, our economic system is addicted to "growth", and thus is addicted to credit expansion. But credit expansion, for myriad reasons, always collapses. Always. The full court press to convince the public otherwise is on...but community preparation and self-reliance will be the creeds by which we all eventually live.

Mon, 09/20/2010 - 11:39 | 592065 pan-the-ist
pan-the-ist's picture

But this time it's different :)

Mon, 09/20/2010 - 11:30 | 592038 insidious
insidious's picture

At some point I would like to short the Australian dollar. Is there an inverse ETF for the Australian dollar?

Mon, 09/20/2010 - 11:43 | 592076 chirobliss
chirobliss's picture

Yeah, there is.  The ticker is USD.

Mon, 09/20/2010 - 11:33 | 592042 Manipulism
Manipulism's picture

Just in the case you missed it, Marketwatch announced today:

 

U.S. recession ended June 2009, NBER finds 18-month downturn was longest since end of World War Two

 

 

Mon, 09/20/2010 - 11:41 | 592072 doolittlegeorge
doolittlegeorge's picture

"so that government of, by and for the Dow Jones Industrial Average shall not perish from this earth."  From end of dramatic prepared text of current regime leader's speach before interested parties on CNBC.  "now i open the floor to questions."  Silence followed by....."THANKS!" and "ALL RIGHTY THEN!"

Mon, 09/20/2010 - 11:44 | 592077 Joe Davola
Joe Davola's picture

As someone stated here last week, only in the stuff you need.  Shit you don't have any use for ain't inflating.

Mon, 09/20/2010 - 11:45 | 592079 Dismal Scientist
Dismal Scientist's picture

For now, I see no reason not to own commodity equities, PMs and cash. No bonds and am not going near the VXX just yet either. This market is enough to make a grown man blanche.

Mon, 09/20/2010 - 20:36 | 593597 Diogenes
Diogenes's picture

I totally agree. All except the part where you changed your name to Blanche.

Mon, 09/20/2010 - 11:47 | 592085 xempik
xempik's picture

I hope hedge funds are making good cash by buying on POMO days...

Mon, 09/20/2010 - 11:53 | 592103 goldfish1
goldfish1's picture

The recession was officially over in June 2009. Why is more needed to be "injected?"

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/09/20/financial/f074226D74.DTL

Mon, 09/20/2010 - 12:05 | 592152 Chito Campo
Chito Campo's picture

Sorry, Tyler.  It's a sensational looking headline but today's purchase is hardly a record.

According to the FED data feed purchase activity was larger on...

  • 10/28/2009
  • 9/1/2009
  • 8/24/2009
  • 8/21/2009
  • 8/17/2009
  • 8/10/2009
  • 8/6/2009
  • 8/5/2009

...and the list goes on.

 

 

Mon, 09/20/2010 - 12:35 | 592261 Lord Blankcheck
Lord Blankcheck's picture

"record for QE lite"

 

 

Mon, 09/20/2010 - 21:35 | 593733 Ned Zeppelin
Ned Zeppelin's picture

That was QE 1, so yesterday. This is the same QE, only all over again: QE Redux.  Next up, on top of what will almost certainly be continuous QE Redux, will be QE: the Defined Program, and $2 Trillion sounds about right. Coming to a Fed Meeting near you in November.  

Mon, 09/20/2010 - 12:18 | 592191 DTCC 1999
DTCC 1999's picture

 

I'm wondering if there is a correlation between the remainder of toxic private liabilities (of select financial institutions) being transferred to sovereign balance sheets and the commencement of a market crash.  

 

Mon, 09/20/2010 - 12:24 | 592195 cranky-old-geezer
cranky-old-geezer's picture

Yes, recession is over ...for Wallstreet ...not Main Street ...not that they care.

Only thing being stimulated is Wall Street casino.  Ben standing at the door handing out big boxes of cash to banksters walking in ...and broke banksters coming back from tables asking for more. "Here, have another, want two?"

Ben dropping dollars out a helicopter is over Wall Street, not Main Street.

 

Mon, 09/20/2010 - 12:40 | 592279 aztrader
aztrader's picture

It's monday folks.  Ramp the market every monday so that we can protect the downside for all the crappy economic news that will be released during the rest of the week. 

If Congress made it illegal for the Fed to interfere with the equity or currency markets, the volume would probably double!  bringing back investors on both sides.

Mon, 09/20/2010 - 12:42 | 592284 tom
tom's picture

Tyler: These daily POMO numbers are the Fed's gross purchases of Treasuries. It's the net purchases that really matter, after subtracting out weekly maturation. You can calculate the Fed's weekly net purchases of Treasuries from H.4.1 reports, by subtracting the previous week's holdings from the current week's number.

For example, the H.4.1s show you that the Fed made $4.75 billion of net Treasuries purchases in the week of Sept. 9-15, compared to $8.64 billion of gross purchases, as you see in the daily POMOs.

The H.4.1 also shows you the weekly maturation of the Fed's mortgage debt, which has been running about twice as fast as the Fed's net purchases of Treasuries. In Sept 9-15, $12.9 billion of the Fed's mortgage debt matured. In the first five weeks of this program, net Treasury purchases have been $17.6 billion, while $32.1 billion of the Fed's mortgage debt has matured. By the way, this "maturation" includes a lot of default-driven early repayment. 

This would only be QE/monetization if net purchases of Treasuries exceeded maturation of mortgage debt. That's clearly not happening. These Fed Treasury purchases are so far only enough to slow the pace at which the monetary base is shrinking. In the big QE/monetization show this is still the intermission, has been since February.

Mon, 09/20/2010 - 21:41 | 593748 Ned Zeppelin
Ned Zeppelin's picture

"In the first five weeks of this program, net Treasury purchases have been $17.6 billion, while $32.1 billion of the Fed's mortgage debt has matured. By the way, this "maturation" includes a lot of default-driven early repayment.

 

If true, should there not be a corresponding increase in cash reflecting the unspent portion of the mortgage debt paydowns? In other words, $32.1 billion minus $17.6 billion = $14.5 billion left over in cash? How hard is that to find? Or is the $17.6 billion all the money the Fed got as a result of the maturation of $32.1 billion of rotten MBSs? 


Mon, 09/20/2010 - 12:59 | 592324 pachanguero
pachanguero's picture

Tom, can you expand on that?

Mon, 09/20/2010 - 14:24 | 592543 tom
tom's picture

My main point is, the Fed's not creating any new liquidity, it's just moving liquidity around.

The maturation of Fed mortgage holdings is the amount that the Fed is indirectly collecting from households as they repay mortgages, and also from Treasury as it backstops GSE/agency guarantees of MBSs whose component mortgages default. The Fed is taking part of that money and lending it, indirectly, to Treasury.

So for the default-driven repayment of Fed-owned mortgage debt, the Fed is basically lending money to Treasury so Treasury can buy the Fed out of its bad MBSs. I can't see how any of that gets to the stock market.

When the Fed takes money collected from households repaying their mortgages and lends that indirectly to Treasury, that gives a profit to a financial sector intermediary and frees up money in the financial sector that would have bought the same Treasuries had the Fed not bought them. Some of that reaches the stock market. But I doubt that's much of a factor.

No doubt stocks are buoyed by anticipation of QE2.

Mon, 09/20/2010 - 14:40 | 592573 subqtaneous
subqtaneous's picture

You said yourself that the fed is moving in the interest of preventing deflation, and in addition to that guaranteeing their target ZIRP, correct?

 

Where is all of that free money going?  To buy paperclips?

 

Mon, 09/20/2010 - 17:17 | 593134 tom
tom's picture

Actually I didn't say anything about deflation or ZIRP. That's another part of the story.

We've got to go back to QE1, which injected far more liquidity than was necessary to keep the federal funds rate below 25 bips.

After QE1 finished, the monetary base began gradually contracting as the Fed extinguished the money it collected from maturation and early repayment of the mortgage debt it held. Since there was so much excess liquidity around, this gradual contraction did not have much visible effect on rates. The federal funds rate rose from around 12 bips in February, when excess reserves and the monetary base peaked, to around 19 bips in early August.

But then in August Ben persuaded the FOMC that extinguishing the money the Fed collected from repayments of MBSs amounted to "an undesirable passive tightening of policy", and so the Fed started instead using the money to buy Treasuries. So if we're talking about how this policy affects ZIRP and possible deflation, it's like this: by not extinguishing the money it collects from maturation and early repayments of MBSs, and instead lending it to Treasury, the Fed is slowing the pace of contraction of the monetary base, and resisting further upward movement of the federal funds rate. Which anyway is up to 21 bips.

I don't know what you mean by "free" money, but assuming you mean the money the Fed is spending on net Treasuries purchases, in the most obvious kind of analysis it goes towards interest on the federal debt and general federal spending.

Within that federal spending, there's an obvious direct relationship between Treasury backstopping GSE/agency guarantees of bad MBSs and Fed taking the money it collects from early repaid MBSs and lending it to Treasury.

Looked at another way, if you analyze the flow of net purchases of Treasuries, the Fed's entry as a net buyer displaced other net buyers who are now presumably buying something else, including some stocks. But I doubt that's a big factor in the stock market ramp. I do think anticipation of QE2 is a big factor.


Mon, 09/20/2010 - 13:28 | 592403 virgilcaine
virgilcaine's picture

We give it all back this afternoon.  Close RED.

Mon, 09/20/2010 - 13:30 | 592409 pat53
pat53's picture

not a chance .

Mon, 09/20/2010 - 13:44 | 592445 kornholio
kornholio's picture

Been a lurker here for a LONG LONG time. My first post and probably my last. The fact is about 99% of information, thanks Tyler, gathered here is bearish. The people who post here are also bearish to the max. The fact is you are all apparently very wrong as it applies to the stock market now. The market is in melt up right in front of your faces and you cannot and will not talk it down now matter how many time you try. Problem is I am missing the melt up with my money getting about 2.5% in a stable value account. I am as big a loser as you, and it is probably too late now to get back in the stock market. Probably  see dow 15000 fairly soon, but without me. I am just too scared and old to risk losing my money if I am wrong and you are finally proven right.

Mon, 09/20/2010 - 13:56 | 592485 rocker
rocker's picture

Wrong, I am long all precious metals,DGP,SLV,PALL,PGM,PTM,NILSY,XSRAY,TC, and Uranium is next.

Full discloser, I am short the puke banks.

Mon, 09/20/2010 - 14:10 | 592512 Minion
Minion's picture

Hi,  Same situation for me, first post, long time watcher. 

From a purely technical standpoint, the past few months have been looking like a flag continuation pattern (well defined channel, decreasing volume) and we're at a near term extreme in positive market sentiment (is anyone other than the ZH crowd bearish?).  Even the elliot wave count is fitting the pattern of a coming leg down.  I think you risk a serious setback if you try to chase price here.  It seems the consensus on this web site is that the only thing holding up the market is FED intervention and the funds that follow its lead, and the data tends to agree.  I don't think the general public is taking the bait - especially not retirees.

Mon, 09/20/2010 - 14:49 | 592599 kornholio
kornholio's picture

thanks for the replay minion, contrary to consensus on the website I dont believe the fed is proping up the s@p 500. Sounds a little conspiratorial, and very illegal to me. I just think that the computers are driving the market higher trading among themselves with a bias to the upside. Dont know how long it will last. I just wish I was on the right side of this market so I could make some money.

Mon, 09/20/2010 - 17:21 | 593154 Panafrican Funk...
Panafrican Funktron Robot's picture

What is your stable value fund invested in?  $100 says you have no idea.

Mon, 09/20/2010 - 18:36 | 593352 kornholio
kornholio's picture

actually I do, guarenteed investment contracts with insurance companies and selected banks.  they are normally tied to the the 10 year note. you can keep your 100 dollars smartass

Mon, 09/20/2010 - 22:25 | 593832 Minion
Minion's picture

That's a good point - the pace of capital outflows from the markets seems to agree - the only ones left are the institutions trading with each other. The funds usually take the other side of the trade as the banks (gold COT report is a good illustration), and it's the banks providing the funds with leverage.  Who has the upper hand?  I'll say one thing - banks are net short gold while funds have been piling in, chasing price.  I've got a hunch they're chasing the stock indexes too.  All the indicators are overbought, we're at the top of a channel, market sentiment is getting bullish to the extreme, and even the ZH crowd is getting pissed at what appears to be a bear massacre.

 

This is when conditions usually reverse.  :)

 

 

Mon, 09/20/2010 - 14:07 | 592507 wgpitts
wgpitts's picture
Looks like the Fascist arm of the Oligarchs, the Federal Reserve received their instructions to ramp up the stock market prior to Barry Soetoros "Recession is Over as Evidenced by the Market" speech at noon. However America has come to terms that the NYSE is a manipulated fraud for the benefit of the hedge fund owners and are bailing on this whole ponzi scheme en masse
Mon, 09/20/2010 - 15:51 | 592827 Downtoolong
Downtoolong's picture

I’m sooo glad I still have a few things left to sell before the end of this year in my long term stock market exit plan. I figure the S&P 500 will hit a relative peak around end Oct. By that time voters will have made up their minds and the need for further politically motivated stock purchases will fade. Then it will be time to hit the bid, any bid. Let’s face it, this government sponsored bolstering of the stock market is probably the closest thing to a bailout that small investors are ever going to see.

 

 

Mon, 09/20/2010 - 16:46 | 593009 Djirk
Djirk's picture

Dear Mr. Bernanke:

I am writing you as an unofficial spokesman of the POMO Indian Tribe of Northern California.

This letter is to ask you to cease and desist with the term current used for your money market manipulation procedures called Permanent Open Market Operations, also known as POMO.

Not only is this farce an outrage to our honor and our name. You are scaring retail investors from the equity markets by rigging the biggest casino. This impacts our revenues and is destroying the wholesome image of gambling we have worked so hard to develop at our Indian casinos.

And we all know what happens when you try to rig the markets. C'mon you are just a man, admit it.

We ask you to please come up with another name soon.

It appears that someone tried to scalp you in the past. However, if you do not honor our request we may be forced to cut the crusty the clown hair puffs you still sport proudly.

May the sun shine in your garden!

Hugga Ka Hayu

 

 

 

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