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Fed Releases New POMO Schedule, To Monetize $112 Billion In Bonds And Prop Up Stocks On 18 Out Of 19 Trading Days
The New York Fed's equity crash prevention team of Sack-Frost has just released its most recent POMO schedule. Over the next month, ending on February 9, the Fed will purchase about $112 billion in debt in 18 discrete operations. And for the first time unlike the prior two QE2 monthly schedules, there is not one dual POMO day. From the release: "Across all operations in the schedule listed below, the Desk plans to purchase approximately $112
billion. This represents $80 billion in
purchases of the announced $600 billion purchase program and $32 billion
in purchases associated with principal payments from agency debt and
agency MBS expected to be received between mid-January and mid-February." The days when there is no POMO will be Monday, January 17 and Wednesday, January 26. All other days have a POMO operation scheduled.
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Very solid Beige Book today. Worth mentioning are the strength in manufacturing, retail and employment. Nothing negative here and more reason to keep the rally intact.
Could you educate us as to what will happen once the FRB stops handing over $100bn/month, closing in on 10% of GDP annualized.
Surely, if the economy is as strong as you seem to believe, this wouldn't make any impact what-so-ever?
13% of the GDP is US gov't deficit spending. 1/8 of our economy is based on spending money we need to borrow/print.
nuff said.
The passage below is excerpted from this:
http://tfmetalsreport.blogspot.com/2011/01/you-dont-tug-on-supermans-cap...
"To review, the just-completed $110B POMO of mid-Dec to today brought us these returns:
12/10/10 1/12/11 Total
The E-mini S&P (ES) 1236 1283 +3.8%
Feb Crude 88.31 91.87 +3.46%
March Copper 411.20 441.60 +7.39%
March Soyas 12.82 14.15 +10.29%
March Sugar 29.13 31.98 +9.78%
March Silver 28.60 29.67 +3.74
Feb Gold 1385 1388 flat
March Wheat 7.75 7.71 flat
First of all, let me assure you that the only reason gold and wheat are flat is because I own them.
Seriously, there could be no other reason than the "Turd Jinx". Other than those two, look again at the numbers!! For one month!! Do not be short anything!!! Period. You'll be crushed under a mountain of soon-to be worthless fiat FRNs."
I'll take "worthless fiat currencies" for $800 Alex. The Answer is "Line bird cages and use as toilet paper."
Yes, Turd Furguson....
"What is a US Dollar?"
You are Right. You have won $800 and you control the board.
As the economy has already restarted, I'm sure it will be painless.
What a crock of shit.
I love you Hamy! Parody, parody, parody ....
Edit:
Definitions of parody on the Web:
wordnetweb.princeton.edu/perl/webwn
en.wikipedia.org/wiki/Parody
Harry cannot educate us as to the outcome of ending POMO, because he is an intellectually dishonest P.O.S.. If Harry were able to admit that he is simply trying to make money in a broken system, that would be fine. There are several things that make him a PURE D FUCKTROLL FROM HELL!!!:
1.) He sometimes implies that he believes that the system is broken, and that he is simply trying to make the best of it. BUUuuut----
2.) He consistently turns around and cheerleads the markets with all the enthusiasm of B Cups Burnett, but with little more insight than her last vaginal discharge.
3.) He only ever makes two calls: AAPL, and the next 5 minutes of SPX. Thanks Captain Fucking Obvious.
4.) He WAS alway right. EVERY time. NEVER lost a dime EVER, thank god for those tight stops, etc.... BULLSHIT.
Harry, the more you talk, the more I believe you have never actually invested a dime on your life. Now hurry up and wipe the coke off your porn 'stache; there's a little old lady standing over there that wants to buy a used car.
The Fed monetizing Federal debt is negative otherwise they wouldn't be doing Harry. It means the economy=shit.
Normally you don't keep a hospital patient on life support if they are in good shape. But if you perceive the US on life support as a positive than that is your perogative.
You have to keep the hospice workers employed too. Likewise, POMO adds 4 productive jobs to the economy.
I don't even know.....
well said
Hey Harry, I'm guessing this wasn't you...? Should it have been?
http://www.wtop.com/?nid=25&sid=2221586
.
OK WANKER..BY THE WAY..HOW MUCH BONDS DO YOU OWN..INCLUDING MUNIS OF COURSE...
112x12 = 1,344bn annualized. Just a fraction off 100% monetization rate.
But hey, stocks are up because stocks are up. Who cares about facts and fundamentals?
Note: millions of millions...of which 10% is...~1.4T (if you're gonna call 'facts' on someone, get yours straight first)
Country GDP (millions of USD) — World 58,133,309 1 United States
14,119,000
UD GDP: $14.59tn. Trillion = 1,000 billion.
Fed monetization rate: $112bn x 12 = 1.344tn
1.344 / 14.59 = 9.2%.
But I was in fact talking about the deficit, which is around $1.56tn.
Why has the $ got a line through it?
....Shows you where to tear it for use in the toilet
+1 drinks on me.
Nothing to see here...To Infinity and Beyond!
It's just a matter of time until we're all hungry billionaires.
The New York Fed's equity crash prevention team - now that's funny.
Can't BTFD because there won't be any.
It has become a matter of gradient.
+1
gradient = negative = buy
I don't think the market will see much of any dips during earnings season. Earnings IMO will be very strong Q4. However all bets off afterwards, we could see a 3-5% pullback for sure. We got POMO though June so ya gotta take advantage of the dips.
Didn't we say that last quarter? IMO, as long as accounting fraud is legal, earnings will be strong.
That's exactly why buying the dips is the way to go. It's been working for almost 2 years and to be honest I haven't lost a wink of sleep being long this market. Bernanke is walking the walk! I just wish I wouldn't have sold 30% of my long position last Tuesday.
Punch bowl re-filled, party on!
You know, while everyone is doing the "Riverdance" over at the Dow there is a stampede out of Municiple debt"
http://finance.yahoo.com/lookup/all?s=muni&t=A&m=ALL&r=&b=0
A sea of blood "red"
POMO to infinity !
P.S. anybody look at that spain market ?
up 5.42% ??
http://www.sgxniftydowfutureslive.com/index_files/DOWFUTURES.htm
POMOtion - it is perpetual !
There is a reason why you are not hearing anything about this....panic and fear
The market already priced this in right?
Have these people no shame?
Sorry....got carried away there. The answer is obvious.
They're doing God's work.
Does God have no shame?
God is not the problem here.
May God have mercy on your souls, because we will have none.
You're welcome,
-The Bernank and the JP Morgue
"Forgive me Father because I have sinned"
Get of jail free card!
I used it a lot as a kid "I hit my brother..." and hid my real crimes
In God (gold) We Trust!
says so, right on my debt bill†
<POMO><ON><MAX>
Can The Bernank keep it humming all the way to election day November 2012?
Now, there's a thought.....HOT DIGGITY
The whole industrialized world is about ready to implode under the weight of unsustainable debt, and these guys have just figured out housing is back in depression territory. If you would start looking at things and apply a small amount of critical thinking you would realize this is all one big spin machine trying to keep everyone believing we're in a recovery when the ship is burning. The economies around the world already collapsed. What we're witnessing now is nothing but the final bellow before we go under. Unsustainable government debts around the world is not a recovery or growth, we're all going to get an up close and personal look at monetary failure.
POMO = Never ending, until it isn't.
POMO gas on the fiyah.
Where is the Federal Reserve getting all the money?
They have an infinite amount.
That is the problem with Zerohedgers. Zerohedgers like to price the stock market in terms of how much money is in circulation now, now how much money there is going to be. No brainer to buy stock.
What's a dollar worth in the age of infinite monetization? I can't buy food with DJIA points.
Does it matter? Hyperinflationists on zerohedge thinks the market is going to go down. I am embarrased for these people.
Yes, it matters. And you didn't answer the question.
You will be able to buy "stuff" from X amount of DIJA dollars in the future than you will be able to buy now. During times of increased polarization, inflation hedges to own title to consumable production (like DIJA companies) increase purchasing power. Gold will not.
Yes, the Dow has been a great inflation hedge for the last decade. Much better than gold. I think we are done here.
No, gold was the deflation hedge of the last few years up to 2008. Now gold is acting as a partial hedge to hyperinflation. Gold likes extremes. Unfortuneatly for Gold bugs, Equity is the ultimate hedge to hyperinflation. Not gold.
More specifically - equity in utility companies.
Don't be confused about survivorship bias. Plenty of companies has gone bankrupt during times of hyperinflation.
Dont let survivorship bias keep you from putting your money into equity.
HMMM, should i put my money into a company that is backed by a VERY strong economy and is priced in units that will double in 5 years or should I put it in cash- an asset that will have twice the supply in 5 years.???
you have your sentence backwards, it shoud have read: "very strong economy...hmmmm"
I never knew you could create a "very strong economy" simply by monetizing a deficit. Why not double the deficit; the economy would become twice as strong.
incorrect..gold has always..ALWAYS outperformed equities in hyperinflation..as hyperinflation really kicks in the currency goes to zero..and equities plunge faster than harry wangers approval rating on zerohedge..
How are you defining hyperinflation? Domestically or Globally? Is this a blanket statement that holds true in ALL hyperinflation or certain types?
Because if it is, this is incorrect. The results of hyperinflation is not fungible.
The truth is gold only oupterforms equity in one specific type of hyperinflation. Hint: Think divergence in reserve currency money suply and credit marked to market and the rest of the worlds money supply and credit marked to market.
Hang on, are you saying you're an inflationist?
I am saying equities are a screaming buy based on the fact the economy is VERY VERY strong, and it will be priced in an entity (global currency) that will increase in supply. NO brainer.
Right, and are you talking about real or nominal prices?
And if the economy is "very very strong", why do the FRB monetize an ever-increasing amount of the deficit?
And what would happen in the event they were to stop?
...this guy's been hitting the hopium bong hard. There is no real recovery, only a nominal one.
As has been mentioned before, the punchbowl has been spiked again and the party is on with an ever devaluing currency.
Weimar Germany also had a booming stock market as its currency was torn to shreds.
You are the one drinking out of the spiked punchbowl. The market has been going direhea all over Bears anaylsis for 2 years now. Respect the maket and stop fighting it.
Only nominal gains? LOL. Are telling me that everything that you bought in 2008 is not 92% more? Thanks for the laugh.
why not monetize it. When you have a ponzi scheme going that can be treated as a perputity, would you not keep it alive even if you did not have to?
So you think it can continue ad infinitum? When do you see the dam breaking?
The dam will never break. It will strategically leak every now and then by the ponzi designers themselves.
Right, so when the Fed is sitting on $400tn worth of treasuries, Oil will still be at $90, food still be affordable, and the housing market will finally have bottomed out?
That's some pretty damn strong hopium you smoke.
The stock market will increse your purchasing power. End of coversation.
Provided "you" = in the top 10%, then yes, it just might.
Everyone else will just have to starve.
Sure you can. Just sell a few shares of SPY that are up 45 percent since January 2009.
"No brainer to buy stock"
If it is such a no brainer why are stocks flat for the last 12 years while the cost of living has gone through the roof?
That was then. This is now.
The Magic Money Tree. Americans made a deal with the devil. Benevolent intentions of course.
"Where is the Federal Reserve getting all the money?"
01010000 01010010 01001001
01001110 01010100
<ENTER>
Electronic entry so simple... A Sack lackey could do it...
+ binary
I can already feel the WEALTH effect coming in like an avalanche. Now does that count as weather-related? It sure has been mentioned as an excuse for everything lately.
Looks like the semis are getting front run ahead of INTC's results tomorrow.
MU up big, NVDA up even bigger....
Fade it.
Sweet mother of Christ! Zimbabwe Ben is really going to try to get remembered in history. Him and Rudy Havenstein, hope that Gideon Gono does his Comedy Central roast.
Let's do some simple math:
$112 billion * 12 mos. = $1.344 trillion run rate
Ugh?
It's even worse when you realize that this will not be a linear function.
harry. i'm very envious of your analytical skills. how do you do it?
beige book comes out at 2 est. at 2:09 you've already analyzed the report and got a note up telling us how good the report is.
Harry and I know how to analyze data really quickly. Nothing in the book today that contradicts the notion the economy looks better now than it has in over a decade.
Yep, when you ignore a 10% deficit, financed by inkjets on overdrive, the economy is in fact looking rather peachy.
what makes you think it can't reach 15 or 20%?
On the suface that is a lot of deficit spending, but it appears that future increase in production from that deficit spending will actually lower it to around 7.75%.
Historically, once (new_debt/tax_intake) reaches 40%, it's game over. $1.6/$3.8 = 42%.
How come you "know" this time is different?
Game Over for countries that do not own title to the world reserve currency. Applese to oranges.
Also, the marginal increase of tax intake will actually go up with recent issuance of new debt. Increased producitivity is quite impressive of late.
Right, and of course the holder of the worlds reserve currency never changes.
I seem to recall Russia and China starting to trade in RMB. It's just the beginning.
dont hold your breath. Changes hapen every several hundred years. The US about 393 years to go.
China and Russia have traded small commoditiy accounts in non US demonimate currency for decades. It is only getting notice now because information is more transparent.
inkt2002 = HarryWanger
Is this what it has come down to for Zerohegers?
You guys only allow 1 person to have pinpoint accuracy around here?
don't feel slighted. we need your expert accuracy, too. if harry's out who's there to tell us that the "report of the day" absolutely, positively confirms the market can rally to new highs. i, for one, always seem to forget with the release of each report that the rally is confirmed with said release. so i need someone to help me out.
"on the surface, that is a lot of deficity spending"...and below, there's even more. It's not that you and Harry analyze data quickly, it's more like you and Harry analyze data differently
not when the marginal change in production outweighs the cost of financing that debt.
Yes. To create jobs you have to steal money. They are stealing money right now. They are using inflation to steal money. Once the debt to GDP get's so ludicrous they'll try to steal money with taxes and austerity.
We are in this stage of the recovery right now.
http://www.youtube.com/watch?v=u7NOx2GEZSw&feature=related
i was advised by my betters that "all spending is stimulus," and deficits don't matter.
Ah, you've been speaking to Cheney haven't you?
How do we make it stop? Who do we vote out?
Vote? Why do you think they currently attack the internet? They don't want you to know the people behind the curtain aren't democratically elected; they want you to voice your outrage vs your current Democratic/Republican puppet, not vs the controllers of the Federal Reserve.
The 2-party system has been a fraud since 1883, according to "Tragedy and Hope".
- Noam Chomsky
Oil to 98 next month.
Oil will not have a negative effect on equity until it hits 130. If the SPX is between 1400-1500 during the time oil hits 130, there will be no negative effect. The marginal aggregate wealth effect will more than offset it.
I don't care about oil effect on equity. I care about oil effect on me; so does everyone else. Only you, Harry, and Bernanke live in a virtual stock market world.
it does not take much money to hedge the oil effect on your spending via futures or leveraged oil positions.
Right, all those unemployed/underemployed people need to hedge with oil futures. Because they have the money/time/understanding to do this.
Troll on, dude.
Japan has had employement around 5% during the last 20 years. How has that panned out?
This is a very natural and healthy level of employment we have in the US.
Does toll= someone that has been spot on the equity market for 10 straight years?
Japan's debt is bought by domestic savers, not printed by the central bank.
As for your alleged success, if I like you was was a succesful internet billionaire (tm), I'd be on my yacht in the Med with Russian hookers. But yet, you're here.
Just trying to help the less fortunate.
inkt2002 = HarryWanger
"If the SPX is between 1400-1500 during the time oil hits 130, there will be no negative effect"
about sums up the breadth of your analysis
Beige Book shows strength in Escort services, with particular robustness in the shemale and femdom sub-segment.
Is this not insanity????? Are there no sane politicians left in Washington????? I can hear it now when it all blows up......well, uh, I trusted the FED to know what they were doing...uh...
Yup. Like Bernank just said about being blindsided by 2008 in his CNBS interview
With a good 80%+ of these POMO operations focusing on <10 year durations, I would have to believe that there is no exit plan at all, nor could there be one. QE is here to stay.
Fuck the doomed.
Fuck POMO.
I am upset because the economy IS NOT collapsing fast enough.
I want to see pain, turmoil and suffering!
Gold not looking too good here.
I agree... It's a bubble.
Watch the muni´s become the next big shoe....and item of next week...this week its Europe and its bonds...next week...muni´s......
The economy must be doing GREAT !!!
Are you sure its not the new "Insanity Schedule"?
Its all good. Snow plows were out in full force here in NY.
No double POMO? How austere. I bought my fourth yacht last month on the expectation that there would be triple POMOs in February! Damn you The Bernank!
Explains the non-move in Gold. thanks!
I have no problem with the FED. They are what they are; a bunch of parasitic criminal wealth damaging filth. I'd expect them to act no differently to the way they are.
My problem is with U.S. citizens and how they just passively sit idle while it is plainly obvious that the FED are not only destroying the current U.S. citizens wealth by the day, but also the wealth of their children and their childrens' children. You'd think people would be pretty damn angry at that to say the least but no.
Amazing what a good dose of aspartame and fluoride can do, seems to have worked wonders.
Let this be clear, there is no happy way out of this, things are not going to return back to normal. This is an endgame, it's just a matter of time.
excellent post
i was just talking to my friend about all this today. she told me, her twin brother, who is high up in FDIC called her this morning. he is petrified of what is happening to this country, he knows. he has worked for FDIC his wHOLE life and is old. he was almost crying she said, because he sees it all and is afraid to blow some whistles. cause he could be.......................
"cause he could be......................."
what?...saddled with the burden of telling his countrymen and women that they r being fucked in perpetuity by this bank controlled government!!!
poor baby...guess he dont realize we all gonna die some day...whats important is how u lived...tell ur freind to tell her brother to do the right fucking thing...unless he thinks there actually will be some social security benefits left when he retires......
america - way too many pussy's...
I dedicate this song to the incredibly experienced, bright, and tech savvy buyers of bonds at the New York Federal Reserve's POMO Nerve Center (as featured in the New York Time's gushing expose):
http://www.youtube.com/watch?v=AVuJ16Tabbk
i'm gonna get a head start on harry for tomorrow's initial claims, continuing claims, ppi and trade balance.
here goes:
reports released at 8:30 est.
8:30:01 est my take: "initial claims, continuing claims, ppi and trade balance all look good. rally will absolutely continue. nothing - and i mean nothing - not even one data point - in these reports to give any sane person one scintilla of doubt that the rally will continue."
Physical Paper Bitches!
I retract my name and take the following: Paper is King
The price of Oil is the fly in Ben Bernanke's ointment.
Enriching the Sheiks and other Dictators within OPEC along with a few western Oil companies at the expense of the rest of the worlds population will result in the whole system falling apart.
Those countries that are net oil importers can only see their debt rise despite austerity measures if essentials such as oil and food relentlessly rise in price.
New book release in short time titled:"Stock market manipulation a la Federal Reserve with large hedge funds as accomplices - how American economic policy is determined by Paulson, Cohen, Tepper, Soros & Co." Result : ZERO EMPLOYMENTGRWOTH.
Does anybody still remember those day when "monotizing" was a bad thing?
So how many months early did the market sell off last time Bennie shut off the spigot. Sell off started in late April and Bennie officially ended in May? So with the announced ending of QE 2 in June, we sell off in May? We could 1400 on the SPX by then....
CFTC meeting on position limits manana....most futures mkts on the high dumb longs buying here smart shorts selling here what could happen?
Actually beyond the headline, the
beige book sucked. Residential
and commercial real estate and loan
demand were all soft. Those are always,
always, always tightly correlated to the economy and you can't get out without 'em. It's been the additional
larding on of private debt (loan demand) that's gotten us out of our
messes before, and it ain't happening
this time 'cause private debt is still IN THE STRATOSPHERE. Mark it on your forehead, Wanker. You can't say I
didn't tell you.
Why waste POMO on Feb 1st? The market always goes up on the first day of the month. I wish they'd move those POMO $$'s to January 26th. Anyone have Sacks e-mail addy? In the tone of Homer Simpson.......mmmmmmmmmmmm,,,,,I LOVE POMO!
The Fed's Manipulation machine will be there undoing. Why have Treasury yields, and Investment Grade Bond yields, risen when they should have fallen? In Mental Onanism rarely seen, since the cigarette companies were defending their nicotine delivery devices, the Fed came out with their reason: Yields have risen because QE is working. I say they are wrong and are speaking utter gobbledygook. They are tinkering with some of the largest and most complex markets in the world and they have no idea what is happening.
http://www.apartofny.com/more-on-the-amazing-market-manipultion-machine/