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Fed Releases New POMO Schedule: To Monetize Only $97 Billion In Bonds Through May 11

Tyler Durden's picture




 

And now the one all the Fed frontrunners have been waiting for... (with a 40 minute NYU intern induced delay)

Across all operations in the schedule listed below, the Desk plans
to purchase approximately $97 billion.  This represents
$80 billion in purchases of the announced $600 billion purchase program
and $17 billion in purchases associated with principal payments from
agency debt and agency MBS expected to be received between mid-April
and mid-May.

As we had expected, the QE Lite component ($17 billion) is plunging due to a substantial halt in MBS prepays with the Fed. Time to lower our estimate even further on how much the Fed will monetize simply from rolling maturities and MBS prepays.

Operation Date1 Settlement Date Operation Type2 Maturity
Range
Expected Purchase Size
April 13, 2011 April 14, 2011 Outright Treasury Coupon Purchase 10/15/2012-09/30/2013 $4 - $6 billion
April 14, 2011 April 15, 2011 Outright Treasury Coupon Purchase 05/15/2018-02/15/2021 $6 - $8 billion
April 15, 2011 April 18, 2011 Outright Treasury Coupon Purchase 04/30/2015-09/30/2016 $5 - $7 billion
April 18, 2011 April 19, 2011 Outright Treasury Coupon Purchase 08/15/2028-02/15/2041 $1.5 - $2.5 billion
April 19, 2011 April 20, 2011 Outright Treasury Coupon Purchase 10/31/2013-03/31/2015 $5 - $7 billion
April 20, 2011 April 21, 2011 Outright TIPS Purchase 04/15/2013-02/15/2041 $1 - $2 billion
April 25, 2011 April 26, 2011 Outright Treasury Coupon Purchase 10/31/2016-03/31/2018 $6 - $8 billion
April 26, 2011 April 27, 2011 Outright Treasury Coupon Purchase 05/15/2021-11/15/2027 $1.5 - $2.5 billion
April 28, 2011 April 29, 2011 Outright Treasury Coupon Purchase 04/30/2015-09/30/2016 $5 - $7 billion
April 29, 2011 May 2, 2011 Outright Treasury Coupon Purchase 10/31/2013-03/31/2015 $5 - $7 billion
May 2, 2011 May 3, 2011 Outright Treasury Coupon Purchase 05/15/2018-02/15/2021 $6 - $8 billion
May 3, 2011 May 4, 2011 Outright Treasury Coupon Purchase 11/15/2016-05/02/2018 $6 - $8 billion
May 4, 2011 May 5, 2011 Outright TIPS Purchase 04/15/2013-02/15/2041 $1 - $2 billion
May 5, 2011 May 6, 2011 Outright Treasury Coupon Purchase 08/15/2028-02/15/2041 $1.5 - $2.5 billion
May 6, 2011 May 9, 2011 Outright Treasury Coupon Purchase 11/15/2013-04/30/2015 $5 - $7 billion
May 9, 2011 May 10, 2011 Outright Treasury Coupon Purchase 05/15/2018-02/15/2021 $6 - $8 billion
May 10, 2011 May 11, 2011 Outright Treasury Coupon Purchase 05/15/2015-10/31/2016 $5 - $7 billion
May 11, 2011 May 12, 2011 Outright Treasury Coupon Purchase 11/15/2016-05/02/2018 $6 - $8 billion
 

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Tue, 04/12/2011 - 14:47 | 1162506 Larry Darrell
Larry Darrell's picture

"As we had expected, the QE Lite component ($17 billion) is plunging due to a substantial halt in MBS prepays with the Fed."

Tyler, what's it like to live in a permanent state of deja vu as you study data, see things, report them, and then watch them happen?

 

Tue, 04/12/2011 - 15:37 | 1162715 LowProfile
LowProfile's picture

Huh.  Wonder what Rickards has to say now http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/3/11_Ji...!.html

Tue, 04/12/2011 - 17:13 | 1163062 ghostfaceinvestah
ghostfaceinvestah's picture

Rickards is so off base.  It doesn't matter if the Fed maintains the size of their current balance sheet.  To sustain this charade of a recovery, they need to GROW their balance sheet.  Reinvesting principal paydowns and expiring debt ain't gonna cut it.

They stop growing their balance sheet and the market starts cratering, followed quickly by the real economy.

Tue, 04/12/2011 - 17:52 | 1163146 r101958
r101958's picture

Ghost....you are exactly right. Well stated!

Tue, 04/12/2011 - 20:46 | 1163619 sex4king
sex4king's picture

i dont see how they can possible stop QE2 even for a little while...

Wed, 04/13/2011 - 09:38 | 1164835 NonAggressionPr...
NonAggressionPrinciple's picture

Yeah i dont get how they could really believe that ending QE wouldnt result in anything but cratering of all markets and slowdown in the economy.

 

Rickards made sense because he said ending QE was just a diversion and not true which makes sense because you dont want to extend QE and have the US bond and dollar to unravel.

 

But 17 billion isnt enough to substantiate Rickards theory?

 

Anyone with any ideas?

Mon, 08/15/2011 - 06:38 | 1560876 cindycheng
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Tue, 04/12/2011 - 14:49 | 1162508 NOTW777
NOTW777's picture

ben, i swear we dont monetize

Tue, 04/12/2011 - 17:21 | 1163080 Cash_is_Trash
Cash_is_Trash's picture

I'm glad the Fed is accountable for their actions...

Even if the metals come down, its still sound money.

The mining shares sure bite when the PM's come down though...

Tue, 04/12/2011 - 17:24 | 1163081 Cash_is_Trash
Cash_is_Trash's picture

DP

Tue, 04/12/2011 - 14:49 | 1162509 SheepDog-One
SheepDog-One's picture

Looks like the training wheels will be off the FED retards bicycle pretty soon. Im betting lots of band aids and gauze and splints will be needed.

Tue, 04/12/2011 - 14:54 | 1162543 Cdad
Cdad's picture

No way Dog.  They'll just need to renegotiate E. Burnett's contract over at the BlowHorn [CNBC] to be on more hours during the day...so that her adorableness gives more buoyancy to the markets.  Simple.

More stories about burritos and leotards!

Tue, 04/12/2011 - 17:37 | 1163112 Triggernometry
Triggernometry's picture

Erin Burnett in a leotard.

Mmm, leotard...

Tue, 04/12/2011 - 14:47 | 1162511 plocequ1
plocequ1's picture

This is unacceptable. The owners are displeased. Try again.

Tue, 04/12/2011 - 14:53 | 1162526 treemagnet
treemagnet's picture

Put Niedermeyer on it.  He's a sneaky little shit.

Tue, 04/12/2011 - 14:53 | 1162528 duncecap rack
duncecap rack's picture

How much of the $600B left after this?

Tue, 04/12/2011 - 15:03 | 1162546 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Is this a trick question?

I shouldn't snark, but QE to infinity.

Tue, 04/12/2011 - 14:54 | 1162536 Jason T
Jason T's picture

Tis a deal with the Devil, the Father of Lies.  

Tue, 04/12/2011 - 14:53 | 1162537 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Really light at the back end of the curve, but I guess what they do not monetize, the PDs will just flip back to the Fed.

Tue, 04/12/2011 - 14:55 | 1162539 Hansel
Hansel's picture

This everything is too stupid for words.

Tue, 04/12/2011 - 14:56 | 1162551 earlthepearl
earlthepearl's picture

The non-uniformity of the activity just hints at manipulation doesn't it?
Why are some days 6-8 and others 1.5-2.5, I would like to have this clarified,

Tue, 04/12/2011 - 15:04 | 1162582 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The want the indirects to own as much long term debt as possible.

Tue, 04/12/2011 - 15:07 | 1162590 treemagnet
treemagnet's picture

Greenwave ?

Tue, 04/12/2011 - 15:10 | 1162618 earlthepearl
earlthepearl's picture

Yes, TU

Tue, 04/12/2011 - 15:15 | 1162631 treemagnet
treemagnet's picture

how highs the water momma?

Tue, 04/12/2011 - 15:25 | 1162673 earlthepearl
earlthepearl's picture

I am a NOLA ex-pat

Tue, 04/12/2011 - 15:40 | 1162719 treemagnet
treemagnet's picture

sorry, whats NOLA?

Tue, 04/12/2011 - 16:08 | 1162844 Cthonic
Cthonic's picture

What's left of New Orleans.

Tue, 04/12/2011 - 15:28 | 1162683 I Am The Unknow...
I Am The Unknown Comic's picture

14.3 trillion feet high and rising

the jobs don't grow

there's nothing to sow

better go and blame it all on the snow

14.3 trillion feet and rising......

How high's the water Papa?

Tue, 04/12/2011 - 15:03 | 1162573 virgilcaine
virgilcaine's picture

We are going to see 5% on the Ten Yr US Tsy and Dow 8k in 2011.. 30 Yr Bond Mkt Bull run over.

 

vc

Tue, 04/12/2011 - 15:07 | 1162594 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

With inflation raging like a dungeon dragon pensions need Dow equities to stay above 11k.  Bernanke will do everything imaginable to keep the fiat ponzi rolling downhill, even if that means having The President's Working Group on Financial Markets owning every share of equity on market and a lot of corporate debt too, not to mention MBS, T bills, bonds, precious metal short positions, etc.

Tue, 04/12/2011 - 15:11 | 1162614 Cognitive Dissonance
Cognitive Dissonance's picture

If he purchases my lousy stamp collection I'll get on board.

Tue, 04/12/2011 - 15:12 | 1162619 DUNTHAT
DUNTHAT's picture

I'm buying Calls on TBT

Any suggestions on the time structure of those calls??

Tue, 04/12/2011 - 15:20 | 1162647 willien1derland
willien1derland's picture

Damn - Perhaps Ben & The Fed are a little fatigued, I mean, when you are so ambitious that you execute the ultimate fraud with zeal attempting to subjegate as many people to poverty as you possible can in the least amount of time, well, that can wear on even the most criminally motivated....I think da Bernank needs to speak with a few Super Market owners  - they can introduce him to "Double Couponing' - Twice the taxpayer losses in half the time - even Adam Smith would admire such efficiency - after he stopped vomitting out of disgust - Ben Bernanke you are inhuman - it is people like you who remind me why liberty requires eternal vigilance!

Tue, 04/12/2011 - 15:33 | 1162703 Coldsun
Coldsun's picture

Funny how they were already wearing helmets, elbow and knee pads before they got near the bike...

Tue, 04/12/2011 - 15:51 | 1162758 kito
kito's picture

dammit!! what the hell does that mean!! please, for the layperson here, in a nutshell, what are the implications of these POMO readings????!!!

Tue, 04/12/2011 - 16:34 | 1162922 JW n FL
JW n FL's picture
Dow
 

   12,263.60
 

   -117.53 (-0.96%) 
 

     Nasdaq
 

   2,744.79
 

   -26.72 (-0.97%)  
 

   S&P
 

   1,314.16
 

   -10.30 (-0.78%)

 

 

Looks like it was priced in.. down 117.53 or almost 1%... POMO we need more POMO or CowBell?? I forget which.
Tue, 04/12/2011 - 16:35 | 1162926 lettuce
lettuce's picture

guys, the point of this announcement today is that there are only 20bn remaining in the QE2 program after this 80bn is purchased. prepare for QE2 to end on or around may 18.

Tue, 04/12/2011 - 18:56 | 1163291 kito
kito's picture

thanks lettuce. 

Tue, 04/12/2011 - 16:50 | 1162979 Strategery
Strategery's picture

It's over and didn't work: get busy, Ron Paul!

Tue, 04/12/2011 - 19:31 | 1163384 TheGoodDoctor
TheGoodDoctor's picture

So, does this mean that the markets rally through 5/12?

Tue, 04/12/2011 - 21:19 | 1163706 thedrickster
thedrickster's picture

That......... would be the relevant question.

Tue, 04/12/2011 - 19:52 | 1163443 Davilis
Davilis's picture

And in further news, the Federal Reserve, a privately held company with no reserves, declared bankruptcy...

Now THATS monetizing the debt!

Tue, 05/31/2011 - 05:31 | 1324685 aoter
aoter's picture

Damn - Perhaps Ben & The Fed are a little fatigued,642-504 test I mean, when you are so ambitious that you execute the ultimate fraud with zeal attempting to subjegate as many people to poverty 642-165 test as you possible can in the least amount of time, well, that can wear on even the most criminally motivated....I think da Bernank needs to speak with a few Super Market owners - they can introduce him to "Double Couponing' 646-364 test - Twice the taxpayer losses in half the time - even Adam Smith would admire such efficiency - after he stopped vomitting out of disgust - Ben Bernanke you are inhuman - it is people like you who remind me why liberty requires eternal vigilance!

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jimmight's picture

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