Fed Releases Latest QE Lite POMO Schedule: Brian Sack To Monetize A Paltry $14 Billion In Next 30 Days
The latest QE Lite (not QE2.5, not QE3) POMO schedule has been released. The New York Fed will purchase a measly $14 billion (so much for stealth monetization: this is about one-eighth the regular amount of monthly QE2 POMO) over 7 operations between July 15 and August 8. The biggest POMOs will occur on July 27 and August 3 when up to $3.50 billion in 10 and 7 year bonds will be monetized. The reason for the dramatic slowdown in QE Lite activity? The collapse in MBS prepayments, as we have cautioned for months. So much for stealth QE2 as others have claimed. $14 billion in flow (and remember according to the fed only Stock matters, another matter on which it is dead wrong) per month is a total joke - it is barely enough to keep Netflix at 1 million fwd P/E, and is just another reason why QE3 is coming.
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