Fed's Prompt Agency Monetization Makes Headline News
Oct. 9 (Bloomberg) -- The Federal Reserve bought $170
million of two-year notes sold yesterday by Fannie Mae, the
quickest purchase after issuance of benchmark bonds from the
company or similar institutions since the central bank began
acquiring so-called agency debt.
The purchase was part of $2.6 billion of buying today, the
New York Fed said on its Web site. The central bank listed the
notes among ones it would accept bids for yesterday, about 90
minutes after Washington-based Fannie Mae announced the results
of its $5 billion sale in a statement.
The Fed last month said it would begin buying “on-the-
run” agency debt, or the most recently issued notes in
different maturities. It has purchased $136.3 billion of Fannie
Mae, Freddie Mac or Federal Home Loan Bank bonds since December,
according to data complied by Bloomberg.
The $200 billion program was extended to March 31, from
yearend, by the central bank last month. David Giradin, a
spokesman for the New York Fed, didn’t immediately return a
telephone message seeking additional comment.
We hope that as Bloomberg and other MSM conduits disseminate this and other relevant stories, that more and more people become familiar with the behind the scenes machinations that the Fed is doing, all in its single-minded pursuit of gobbling ever greater amounts of the securities it prints, all with the hidden agenda of destroying any residual value the US currency may have as any confidence that the dollar may be worth anything is promptly refuted by the most recent wave of dollar bills printed by the Chairman.
PS. It appears our observations riled up another bond expert, Accrued Interest (correction - not Accross the Curve, although John Jensen was pretty peeved when we discussed Fed Monetization on August 6, in his post: Monetizing the Debt - Disinformation in the Blogosphere) who claims that this is, as usual, nothing out of the ordinary, and also claims that he does not read Zero Hedge yet devotes numerous paragraphs to refuting just that. For his commentary see here: http://accruedint.blogspot.com/2009/10/ben-bernanke-only-you-could-be-so-bold.html
And for another commentary on the matter, here is Karl Denninger from earlier today.
h/t Mark Pittman and Jim Bianco