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Fed Releases Latest QE Lite POMO Schedule: Brian Sack To Monetize A Paltry $14 Billion In Next 30 Days

Tyler Durden's picture




 

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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Wed, 07/13/2011 - 14:16 | 1452850 qussl3
qussl3's picture

But QE3 is coming isnt it?

So i should just buy buy buy in anticipation no?

Didnt the Bernank promise it?

Infinite profits for the  sheeple?

Wed, 07/13/2011 - 14:16 | 1452856 TheTmfreak
TheTmfreak's picture

Just lube for QE3.

Wed, 07/13/2011 - 14:28 | 1452906 nope-1004
nope-1004's picture

The silver takedown on that holiday weekend in late May was indicative of QE3 coming.  No bones about it.  I even posted here claiming such.  These idiots at the Fed issuing PR statements about exit strategy is all smoke and mirrors.

They know, I know, most politicians know, we can't turn back.  It's going to be QE forever, printing forever, POMO forever, until the dollar dies.

No question about it.  No other alternative.

If "exiting" was the policy, why raid silver?  Why release SPR oil to the market?

Don't listen to the headlines.  Watch the action as it tells the truth.

Wed, 07/13/2011 - 14:34 | 1452931 qussl3
qussl3's picture

The other way out is to have the Chinese demand monster go away, how?

Who cares?

I agree that QE is the way forward, but in the interest of prolonging this as long as possible the FED likely will not do it until people beg.

ie "deflation" rearing its head.

 

Wed, 07/13/2011 - 14:57 | 1453015 Careless Whisper
Careless Whisper's picture

yup, another mini crash should do the trick.

in the meantime banks find more ways to take the assets.

banks friend you on facebook, then serve you the foreclosure papers via facebook. judges said it's all aaa-okay. electronic fontier foundation says aaa-okay. never mind that each state has it's own laws on how to serve legal papers. just point and click and your house belongs to the bank.

http://bostonherald.com/business/general/view.bg?articleid=1351465

Banks ‘friend’ people on Facebook, then foreclose on them


 

Wed, 07/13/2011 - 14:53 | 1453005 SheepDog-One
SheepDog-One's picture

Yet the QE euphoria is played out after 2 failed QE's, its not exactly 2008 anymore. QE now is just for attempted stability of any kind, front run it.

Wed, 07/13/2011 - 15:01 | 1453043 max2205
max2205's picture

Ben's just letting us know the bazzoka is still loaded and where it's aimed....jawbone

Wed, 07/13/2011 - 14:42 | 1452951 Cognitive Dissonance
Cognitive Dissonance's picture

Get back in there and turn those machines on.

http://en.wikipedia.org/wiki/Trading_Places

Wed, 07/13/2011 - 14:16 | 1452855 buzzsaw99
buzzsaw99's picture

not printing money tho...

Wed, 07/13/2011 - 14:17 | 1452860 mayhem_korner
mayhem_korner's picture

Thank goodness...I was worried Brian Sack might show up in tomorrow's initial jobless claims.

Wed, 07/13/2011 - 14:17 | 1452861 Traianus Augustus
Traianus Augustus's picture

Pretty sure that the Sackmasters days are much more active than this schedule shows.  The real trick would be to get the non-published monetization schedule that ole sackies following on a day to day basis.  I am pretty sure WB could post one on Zero hedge within a few hours. 

Wed, 07/13/2011 - 14:21 | 1452873 chartcruzer
chartcruzer's picture

What's interesting after looking into the new budget cuts being proposed as part of the debt ceiling show, is that the $2T of proposed cuts are to be spread over 10 years and virtually none of the cuts are to occur in the next few years.   So, in other words, planet Washington has once again declared that it is going to fix none of the huge systemic debt problems facing the country.   Interesting that in concert the FED is already foreshadowing more QE.  You can expect 'increases' in commodity prices to abate below 2% in the next quarter opening the door for the next QE package.

It's into the rocks at speed folks.  The gauntlet has been cast.

It's going to be hell of a ride.

Lets see if we can make a ton of cash.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s235939273]&disp=P

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s238082247]&disp=P

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s238253528]&disp=P

 

Wed, 07/13/2011 - 14:26 | 1452879 plocequ1
plocequ1's picture

Translation: Blue horseshoe, Sir Lawrence wildman and Dr. Bernanke love NFLX

Wed, 07/13/2011 - 14:25 | 1452894 economists_do_i...
economists_do_it_with_models's picture

What are the chances of stocks dipping into the red today before the close?

ZH risk divergence signal at work.

I do love it so...

Wed, 07/13/2011 - 14:26 | 1452897 Danks18
Danks18's picture

Sell the f-in rip

Wed, 07/13/2011 - 14:26 | 1452899 Everybodys All ...
Everybodys All American's picture

Why not just have Bernanke announce QE infinity and that way Bernanke can say I'll have the fed purchase all of the treasuries because it's not really debt anyway. There investments. No really.

Madoff is in jail and Bernanke needs to be told this is where he is headed.

Wed, 07/13/2011 - 14:50 | 1452991 SheepDog-One
SheepDog-One's picture

Too bad it will apparently take the complete collapse of the country before anyone is questioned about their insane actions.

Wed, 07/13/2011 - 14:58 | 1453028 Dr. Richard Head
Dr. Richard Head's picture

Complete collapse?  This is looking more and more like an option I am looking forward to. 

Wed, 07/13/2011 - 14:38 | 1452905 TruthInSunshine
TruthInSunshine's picture

http://www.zerohedge.com/article/when-you-own-gold-youre-fighting-every-...

by TruthInSunshine
on Wed, 06/15/2011 - 12:18
#1371339

 

Rickards still hasn't told his readers how he arrived at his figures on how much repurchasing of tnotes the Fed can handle assuming a windup of official QE operation is going to happen, or, in other words, how much 'bang' the "maturing assets" on the Fed's existing balance sheet will be able to purchase going forward.

As for gold, he is correct conceptually, but if the situation became so dire that more than 2% of people were openly transacting commerce for everyday goods and services in precious metals, including gold, the government would make doing so a felony; whether such measures would deter such activity, I leave for the individual to use his or her best assessment.

Back to the "rollover of maturing assets on the Fed's balance sheet" issue that Rickards speaks of, and which he claims will allow the Fed to continue significant 'stealth' QE operations, here is what I wrote months ago in response to this claim (which Zero Hedge backed my argument up  - The Fed Does Not Need QE3 And Can Fund Debt Monetization Merely From Rolling Debt And MBS Prepayments? Wrong ):

Rickards predicted this.

Here is my question for Jim Rickards and anyone else who claims that by rolling over income on existing assets that they own (MBS and Tnotes), the Fed can do large scale purchases of additional Tnotes for very long -

http://www.zerohedge.com/article/fed-complete-830-million-7-day-reverse-...

I listened to his 3/27 podcast. I am still mulling over what's he saying given how rapidly things are unfolding. There's a lot to chew on.

Rickards is a very smart guy, but he is the one who seems to be defending the Fed, and even goes so far as to claim they'd rather not be doing QE, etc. He almost seems to be caught up in the efficacy of their alchemy.

He also claims that QE is losing steam, as have low interest rates, etc., but that the Fed will do not do QE3, but rather, 'QE by stealth,' by simply reinvesting their (now) massive balance sheet (which includes principal and interest payments on MBS) into 'being a buyer at margin of treasuries,' in order to reduce nominal interest rates on treasuries.

If he concedes that QE is losing steam, how would such an approach do anything remotely effective in tamping down interest rates, when full blown QE2, which is 100 billion per month in POMO, has not only failed to lower interest rates, but has seen interest rates go higher?

I'd like to see Rickard's math if he modeled his claims.

I realize he put the disclaimer (rightfully so) that the Fed is not transparent, so he's been forced to speculate to some degree, but I'd love to see how much he thinks the Fed is going to be able to roll over into continuing treasury purchases if QE2 ends, because a lot of that has to do with maturity dates, interest to principal paid, default/delinquency rates, etc.

Wed, 07/13/2011 - 15:09 | 1453076 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Jim does good work, but he is an economist, so he doesn't know anything.

:)

Wed, 07/13/2011 - 15:15 | 1453111 TruthInSunshine
TruthInSunshine's picture

He's an attorney, also; the best of both world's?

I jest...I jest.

I find JR intelligent, but can forgive him for the tragedy of being fallible (aka human).

Wed, 07/13/2011 - 14:32 | 1452908 SeverinSlade
SeverinSlade's picture

I increased my position in SPXU today.  Market overbought on what...The Fed saying that they MIGHT implement QE3 if conditions worsten?

Same for silver and gold.  I'm still stacking, but I sold my miners into this rally.  People didn't listen to Bernanke speak.  He didn't authorize QE3 TODAY...he said that shit has to get a lot worse before the Fed even CONSIDERS it.

One last time to BTFD. 

Wed, 07/13/2011 - 14:49 | 1452985 SheepDog-One
SheepDog-One's picture

*cntrl alt del* any matters about conditions having to get a lot worse before any QE is considered, time to knee-jerk and price in QE equity crack party! 

Wed, 07/13/2011 - 14:50 | 1452990 coppertop
coppertop's picture

the storming of the shrews

Wed, 07/13/2011 - 15:11 | 1453085 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

the drowning of mice and men

Wed, 07/13/2011 - 14:30 | 1452913 Atomizer
Atomizer's picture

Pigmans Open Market Orgasm

Wed, 07/13/2011 - 14:36 | 1452937 magpie
magpie's picture

Print Our Moneyz Often

Wed, 07/13/2011 - 14:32 | 1452920 Platinum_Investor
Platinum_Investor's picture

How bad are things going to look fast forward 2015.

It's scary to think what the rest of this decade will bring.

Wed, 07/13/2011 - 14:33 | 1452925 djsmps
djsmps's picture

How can he be stopped?

Wed, 07/13/2011 - 14:51 | 1452998 coppertop
coppertop's picture

if he is shaven he will lose his power. 

Wed, 07/13/2011 - 14:51 | 1453000 ivana
ivana's picture

After years of POMOing now, does anyone know who are new proud owners of stocks which are POMOed - bought with POMO cash?

Assume small investors and funds sold ... but who are legal POMO entities which stepped in?

Wed, 07/13/2011 - 14:55 | 1453011 SheepDog-One
SheepDog-One's picture

FED owns it all now, with no one to sell it to. Therefore going forward their only option is try to keep the bubble they own inflated. 

Wed, 07/13/2011 - 14:54 | 1453008 Kat
Kat's picture

This just won't do.  The stock market doesn't love it. It was looking forward to a couple of zillion dollars.

Wed, 07/13/2011 - 15:15 | 1453107 SheepDog-One
SheepDog-One's picture

Crackhead equities were expecting at least a couple Zillion free money, if not Quadzillions. $14 billion, sorry we are not impressed.

Wed, 07/13/2011 - 14:55 | 1453022 slewie the pi-rat
slewie the pi-rat's picture

it's summertime.  after making $12MM in the last year, the banksters are off on vacation trying to figure out who are these people who usta be their kids.

slewie recommends going for a bike ride and getting fuked up together down by the creek. 

Wed, 07/13/2011 - 15:18 | 1453114 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

QE Light is not much, but it is enough to hold off them damn BRICs until QE 3 is released to carpet bag the world!  The world!

Wed, 07/13/2011 - 15:20 | 1453125 JW n FL
JW n FL's picture

http://www.msnbc.msn.com/id/21134540/vp/43738112#43738112

at the 5 minute mark.. is when the description of America’s Voting Habits is described accurately.

Wed, 07/13/2011 - 15:30 | 1453153 Boston
Boston's picture

After being long Treasuries for six months, I'm

1. cutting back my postions, raising cash

2. cutting duration, moving into 3 year notes (orignally 10, last month 5)

 

I'm torn between these opposing forces:

a. Big Risk Of moment hasn't happened yet; when it downs, yields will rip even lower.

b. Treasury prices have run up a lot already, and Bernanke could whip out QE3 sooner than expected.

 

Wed, 07/13/2011 - 15:37 | 1453213 caerus
caerus's picture

Equity rally fading...fading...

Wed, 07/13/2011 - 15:40 | 1453222 equity_momo
equity_momo's picture

Brian could do that in 1 afternoon and then have a nice long Summer in the Hamptons. The market will be at 900 when he gets back though if thats what he decides.  

Ill pack for you Brian.

Wed, 07/13/2011 - 17:09 | 1453622 AldousHuxley
AldousHuxley's picture

BUY BUY BUY

 

You call this capitalism? Chinese socialists beating communist hating Americans at their own game!

 

http://www.youtube.com/watch?v=whVf5tuVbus&feature=related

 

23 Things They Don't Tell You About Capitalism

Wed, 07/13/2011 - 17:09 | 1453624 keepmydollar
keepmydollar's picture

Just a question to someone who has more government and fed insight than I do.

If the debt limit doesn't get raised, then does that stop the possibility of QE3.  Then the only bonds that could be issued would be equial to the amount that were closed out correct.  The Fed could still buy these (because honestly we all know they are the only buyer there today anyway), but wouldn't it limit the amount that they could print?

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