• Knave Dave
    05/23/2016 - 18:16
    This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve...

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

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Mon, 09/20/2010 - 11:14 | 591977 Hephasteus
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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
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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
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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
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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
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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...
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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
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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
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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
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Rags to bitchez.  It's a movement!

Mon, 09/20/2010 - 11:16 | 591986 xempik
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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
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IT already DID!

Mon, 09/20/2010 - 11:22 | 592004 Internet Tough Guy
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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
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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...
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Probably tomorrow.  But there is that old adage.  The bigger they are, the harder they fall.

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



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$!



Mon, 09/20/2010 - 11:22 | 592005 Traianus Augustus
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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.


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


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


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
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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."



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
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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
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"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.

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