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First Dual POMO Of 2011 On Deck; To Provide Clues On "Operation Twist 2"

Tyler Durden's picture




 

As QE 2 enters its (black) swan song phase, today the Fed will conduct only the first dual POMO of 2011. While two POMOs per day were a regular fixture back in 2010 when the Fed had to give the impression that "profits and earnings ratios" were low enough, they had been missing in the current year... So far. At 11pm and then at 2pm, Sack-Frost team will conduct two $4-5 billion POMOs, the first one targeting 10 years, the second, buying up 3 Year bonds. Which incidentally will be a good test to see if PDs are now in the Bill Gross camp expecting Operation Twist 2 to focus on the 2-3 year space. As a reminder, last week's 2 Year POMO saw exactly zero On The Run bonds monetized, after Bill tweeted his now infamous "QE3" tweet. In other words, while we expect Dealers to go balls to the wall in flipping the just auctioned off 10 Year reopening in the form of Cusip QN3, their interest in flipping the recently auctioned off QS2 will be far more muted. On the other hand, if QS2 is shuffled back to Sack wholesale, it may simply mean that PDs believe that the Fed will target just the 2 Year and leave the 3 Year+ part of the curve floating in the wind. We will know the result of this experiment at 11am EDT. Stay tuned. And in other news, following today's POMO completion, there will be just 7 more POMO days, for a total of $29.5 billion in maximum notional of Netflix share purchases by the PDs.

 

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Mon, 06/20/2011 - 08:29 | 1384457 hugovanderbubble
hugovanderbubble's picture

Long TBT,

Short TLT

 

Just for 1-2 months

Mon, 06/20/2011 - 08:38 | 1384477 augie
augie's picture

I think i would rather spend 29 billion on something meaningful. I mean what are the primary dealers gonna spend it on? It's either Blow and hookers, or its going to sit in retained earnings until kingdom come. 

 

Mon, 06/20/2011 - 08:35 | 1384472 CPL
CPL's picture

I would love, someday, to log into zero hedge and read about how awesome things are going.  profits are up, CEO's are truely awesome people, small business is thriving, energy plans are now 30 year plans instead of 3 years.

 

Then we could all bitch about how things could be made more awesome with miraculious surpluses we've been pulling in.

 

unfortuantely...with the TPTB we're just going to get more smoke, mirrors and bukake from these bastards.  sigh...

Mon, 06/20/2011 - 08:47 | 1384508 Cognitive Dissonance
Cognitive Dissonance's picture

I've been waiting for someone to create an alternative Zero Hedge, maybe even a spoof ZH. No takers as of yet. I guess reality is just too strange to present any other way than the Zero Hedge way.

Mon, 06/20/2011 - 09:20 | 1384576 A_MacLaren
A_MacLaren's picture

InfiniteHedge.org appears to be available, though the parking space for infinitehedge.com has something in the spot...

Mon, 06/20/2011 - 09:32 | 1384594 Cognitive Dissonance
Cognitive Dissonance's picture

Those are Tyler's training wheels, something he left behind 2 years ago when he learned to fly with the Eagles.

Mon, 06/20/2011 - 08:58 | 1384534 euclidean
euclidean's picture

You guys and girls just don't get it. This is just the rinse cycle. What has been coming out since the top are gains from round 1; what is now only just going in will end up as gains from round 2; you are watching the Ponzi washing machine live without fucking realising it.

You don't think it's more than a little odd that prices are dropping for the last 20% or so of POMO? Convenient hey? Tack on 5:1 gains and all this shit will be paid for in 12 months time courtesy of Mr & Mrs Dipshit Citizen's super contributions. Next bubble, next bailout, next spin cycle.

The wash cycle comes soon when all this bullshit dissipates and everyone realises life goes on because it has to - minus 50% of their Superannuation ... Smile for the cameras.

Mon, 06/20/2011 - 09:57 | 1384668 RichyRoo
RichyRoo's picture

translation to USA : super fund = 401K, 'super' = 401K

Mon, 06/20/2011 - 08:43 | 1384482 VyseLegendaire
VyseLegendaire's picture

Where there's smoke, there's bukkake. 

Mon, 06/20/2011 - 08:39 | 1384484 johngaltfla
johngaltfla's picture

Nothing more than piss in the ocean to add water while the tide is out. This will do nothing but delay the day of reckoning.

Which should begin at 2:15 p.m. ET on Wednesday.....

Mon, 06/20/2011 - 08:55 | 1384501 Cognitive Dissonance
Cognitive Dissonance's picture

It's alive! It's alive! It's alive!

In the name of God Chairsatan it's alive.

http://www.youtube.com/watch?v=xos2MnVxe-c

Mon, 06/20/2011 - 09:02 | 1384533 plocequ1
plocequ1's picture

Outstanding. I own the two disk special edition, Part of the Universal monster collection. A must have.

Mon, 06/20/2011 - 08:54 | 1384514 spanish inquisition
spanish inquisition's picture

11am buy 10 years. 11:45pm sell back 10 years. 2pm buy 2-3 years and hold per FED instruction. I am guessing that the extra (more than what is normally made) profits about to be made on the 10 year flip will cover the predetermined 2-3 year holding period agreement. This is a test, this is only a test of the OT2 system....

Mon, 06/20/2011 - 08:53 | 1384515 plocequ1
plocequ1's picture

Well, There it is. Codename Netflix

Mon, 06/20/2011 - 08:54 | 1384524 Ace Ventura
Ace Ventura's picture

It still amazes me that all this monetization is not only occuring....but admittedly occuring. "Yes we're buying our own bonds, don't you want some tooooo?"

Yet the Ponzi Kenworth rolls on, the casino keeps mass-cannoning digital monopoly-guy confetti 'money' into the system.....and the can is successfully kicked a few more yards down the street.

I'm beginning to think they can do this indefinitely. If it's all a matter of simply reconciling (aka editing as desired) digital entries....then what's to stop them from doing exactly that?

Mon, 06/20/2011 - 09:50 | 1384608 Cognitive Dissonance
Cognitive Dissonance's picture

It still amazes me that all this monetization is not only occuring....but admittedly occuring. "Yes we're buying our own bonds, don't you want some tooooo?"

At some point even the crack addict is willing to admit to some sort of dependence if that's what it takes to maintain the dependence or at least to get another hit.

Mon, 06/20/2011 - 10:01 | 1384681 Fish Gone Bad
Fish Gone Bad's picture

It does seem as if this can go on forever, but we all know it can't.  There is an election coming up, and then there is "our friends" who have been dumping our bonds.  Once they have their money back, I am sure payback will be a bitch...

Mon, 06/20/2011 - 11:22 | 1384889 snowball777
snowball777's picture

Yo money, let me hold some and I'll show you where we can both score some really dope bonds, son.

Mon, 06/20/2011 - 09:57 | 1384664 kito
kito's picture

stocks back up today, markets not showing a care in the world...qe3 a long way off, if ever

Mon, 06/20/2011 - 10:19 | 1384733 buzzsaw99
buzzsaw99's picture

please hang around, i wish to mock you at a later date.

Mon, 06/20/2011 - 11:20 | 1384893 snowball777
snowball777's picture

I know you couldn't see the double POMO where they've inserted it, but surely you can feel the effects.

Mon, 06/20/2011 - 10:57 | 1384828 BCTwelve
BCTwelve's picture

10 point S&P rally while apple hits 310 1/2...i wish my checking account could levitate like this

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