Fed Posts Schedule Of Upcoming $32 Billion In POMOs , As It Withdraws Token $260 Million In Liquidity Via Tri-Party Reverse Repo Test
Today, the Fed withdrew a whopping $260 million in liquidity from the market via a Treasury-backed 5 day reverse repo at a 0.20% stop out rate, which is pretty much what banks earn on their excess reserves confirming that this operation was nothing but a travesty. Much more importantly, minutes ago the Fed announced the POMO schedule for the next month: there are 9 liquidity drowning events coming up in the next month. Expect another $32 billion in AMZN, NFLX and AAPL purchasing power to appear magically out of Brian Sack's left pocket. As is now common knowledge shorting on any day, but especially on these days, is suicide. Which is why all natural shorters will continue piling into gold which has become the only way to formally oppose the Fed. Instead of looking at POMO days as stock melt up days, consider them days in which gold will soar even more (due to the recently discussed higher gold melt up beta compared to risk). Trade accordingly.
Note the following dates:
- October 15: 10/31/2014 – 9/30/2016
- October 18: 10/31/2016 – 8/15/2020
- October 20: 1/15/2011 – 2/15/2040
- October 22: 4/15/2013 – 9/30/2014
- October 26: 2/15/2021 – 8/15/2040
- October 28: 15/2012 – 3/31/2013
- November 1: 4/15/2013 – 9/30/2014
- November 4: 10/31/2014 – 9/30/2016
- November 8: 10/31/2016 – 8/15/2020
Across all operations in the schedule listed below, the Desk plans to purchase approximately $32 billion. This is the amount of
principal payments from agency debt and agency MBS expected to be
received between mid-October and mid-November.
And, for those interested, here is today's -0.3% stock performance priced in gold.