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In Last 2010 POMO, Fed Buys Back $2.4 Billion Of Just Auctioned Off 2 Year Bond, $5.4 Billion In Total

Tyler Durden's picture




 

And like that, Brian Sack's market manipulation for 2010 is over. Then again, with practically no trading days left, and no volume to speak of, it was to be expected. Of today's $5.4 billion POMO, which brings the Fed's Treasury holdings ever higher in the trillion club, $2.4 billion went to buy back the PV6 which were auctioned off barely a month ago. This means that 15% of the Primary Dealer allottment of that particular auction ($16.4 billion) has already been sold back to the Fed at a decent profit. And so the shell game continues. What is ore surprising is why the PW4s auctioned off on Monday were neither in the inclusion, nor exclusion lists for today's POMO. After all, there is nothing the PDs would love more than a last minute taxpayer gift to the tune of a few hundred million in a quick two day flip to pad that third private island sinking fund with that little extra in risk free compensation.

 

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Wed, 12/29/2010 - 13:11 | 835853 101 years and c...
101 years and counting's picture

and, as i've posted, the PD's will take this money and use it to take down 60% of today's auction.

the auctions are getting bigger, the buying interest (foreign and domestic) is getting lower and the PD's need to take down greater percentages.

 

 

 

Wed, 12/29/2010 - 13:12 | 835856 dark pools of soros
dark pools of soros's picture

hmmm  silver safely living over $30 and no hourly silver bug articles on ZH??  everyone dancing in the streets already??  

Wed, 12/29/2010 - 13:16 | 835867 UninterestedObserver
UninterestedObserver's picture

Why? $150 isn't here yet - sit back and relax...

Wed, 12/29/2010 - 14:48 | 836117 dark pools of soros
dark pools of soros's picture

I still think gold will outperform silver in '11 - trade some silver for gold now before the spread widens the other way

I just keep getting that 'cash in some chips' feeling from our silver runup 

hold silver - buy gold

Wed, 12/29/2010 - 13:12 | 835857 TooBearish
TooBearish's picture

How is it you assume the sale price back to FED is at a profit?  Rates have gone up substaintially in the last month....

Wed, 12/29/2010 - 13:16 | 835872 SheepDog-One
SheepDog-One's picture

Thats what Im wondering too, wheres the 'profit' in any of this? I dont see it. Like watching the nephews trade their baseball cards to each other for millions of dollars...nice fantasy thats all.

Wed, 12/29/2010 - 13:22 | 835891 Caviar Emptor
Caviar Emptor's picture

How else would it be 'Quantitative Easing'? Fed is keeping rates artificially lower than they would have been without QE. 

Wed, 12/29/2010 - 13:24 | 835899 SheepDog-One
SheepDog-One's picture

Well, I always just remember that 'Quantitative Easing' is a new name for 'printing money to monetize the debt' which is the last desperate act of collapsed nations.

Wed, 12/29/2010 - 13:33 | 835917 smoke and mirrors
smoke and mirrors's picture

Exactly, TooBearish.

How is it a profit (for the PDs) if rates have moved up since the auction?

 

Wed, 12/29/2010 - 13:34 | 835919 smoke and mirrors
smoke and mirrors's picture

Exactly, TooBearish.

How is it a profit (for the PDs) if rates have moved up since the auction?

 

Wed, 12/29/2010 - 13:35 | 835921 smoke and mirrors
smoke and mirrors's picture

edit: double post

Wed, 12/29/2010 - 13:36 | 835924 DarkMath
DarkMath's picture

You mean to tell me if rates go up then the PDs will lose money on the bonds they bought earlier?

 

Borat is shocked and appalled.  “You mean to tell me, that the person that put plastic fist in my anus is homosexual?”

Wed, 12/29/2010 - 14:42 | 836096 dark pools of soros
dark pools of soros's picture

not exactly..  losses are relative.. as in your unborn relatives will deal with said 'accounting challenges'

Wed, 12/29/2010 - 13:14 | 835863 plocequ1
plocequ1's picture

Wake me up when this cant be done anymore. Until then, So let it be written, So let it be done and tis will be done. Rally on.

Wed, 12/29/2010 - 14:42 | 836103 dark pools of soros
dark pools of soros's picture

how many zeros are on their calculator??

Wed, 12/29/2010 - 13:14 | 835865 UninterestedObserver
UninterestedObserver's picture

Days like this are great so we can just extrapolate where the Dow will go in 2011 from the POMO days like today. If 2.4 Billion POMO = 30 Dow points then we can assume that 1 trillion in POMO will lift the Dow around 1250 points not counting any leverage used and any "unforeseen" circumstances like $120 oil, loss of the USD reserve currency status, failed bond auctions, war, etc...

Wed, 12/29/2010 - 13:14 | 835866 Temporalist
Temporalist's picture

For those that were living under a rock:

2010 worst year for bank failures since 1992

http://www.washingtonpost.com/wp-dyn/content/article/2010/12/28/AR201012...

 

Oh and nobody has gone to jail...yet.

 

Wed, 12/29/2010 - 13:22 | 835887 SheepDog-One
SheepDog-One's picture

Seems most of america is living under a rock, buying the media BS that while things may be a bit tough on them today, dont worry next month will be far better. It wont, and the rock dwellers are in for a real rude awakening and brutal tough times soon.

Wed, 12/29/2010 - 13:18 | 835875 Boilermaker
Boilermaker's picture

So, where will it go...REITs, Financials, Insurers...NetFlix, GM, AIG (after the WSJ article marvelling about how it's risen from the ashes by 97%...)?

Actually, who cares anymore?

Wed, 12/29/2010 - 13:22 | 835893 youngman
youngman's picture

I have moved into Hard gold and silver..and I moved out of the country too....I watch now and laugh..but I really do not care anymore..it will stop....and it will be a very hard landing....

Wed, 12/29/2010 - 13:45 | 835944 Boilermaker
Boilermaker's picture

Where did you move to?  Europe is as bad or worse as is Japan.  China is a blatant liar also.

I guess I would toss the Aussie's a bone.  Brazil is a craptastic hole that will require trillions of infrastructure and a corruption cleansing on a biblical scale.

I hate what's happening in the USA but I'm hardly leaving.

Just curious as to where you are now and how it's less corrupt.

Wed, 12/29/2010 - 13:19 | 835876 put_peter
put_peter's picture

Isnt it wonderful that there is almost 100% REAL TIME correlation between PUMP gas price and SP500. It is so wonderful what people can do with computers nowadays.

Wed, 12/29/2010 - 13:21 | 835881 TheGoat
TheGoat's picture

The FED dog eats more of its own spew

Wed, 12/29/2010 - 13:20 | 835884 youngman
youngman's picture

Lets see how the 7 years sell today....and how they spin it...the way gold and silver are going..I think its going to be a failure...

Wed, 12/29/2010 - 13:40 | 835930 HarryWanger
HarryWanger's picture

7 year will not be a failure. Doesn't matter anyway, money is rotating out of bonds into stocks now. That will be the theme for 2011. 

Wed, 12/29/2010 - 15:42 | 836257 SheepDog-One
SheepDog-One's picture

Show any shred of evidence that money is flowing out of bonds into stocks? You cant. 30 weeks of equity outflows continue. 

Wed, 12/29/2010 - 14:03 | 835993 HarryWanger
HarryWanger's picture

Crazy-ass good 7 year auction. Like I said. Sorry.

Wed, 12/29/2010 - 15:40 | 836252 SheepDog-One
SheepDog-One's picture

LOL you moron, remove the PD's 65% takedown and what do you have? Duh? 'Crazy good auction' only if youre a deranged lunatic!

Wed, 12/29/2010 - 19:43 | 836861 viahj
viahj's picture

but i thought you said that money was rotating out of bonds into equities....just two comments above

 

 

Wed, 12/29/2010 - 13:26 | 835906 TradingJoe
TradingJoe's picture

Oh Well! Usual Games and Bread! Since I already closed my books for 2010 I want to take a min and wish all my fellow posters a happy, healthy and prosperous 2011, there is nothing like a good friend, a nice bottle of wine and a healthy meal!

Lets all hope 2011 will be a lot better for ALL of US! I highly doubt it but, as usual, hope dies last!

Wed, 12/29/2010 - 13:27 | 835907 Caviar Emptor
Caviar Emptor's picture

Madoff should have been released and appointed Secretary of the Treasury! They're using his playbook, he could do it so much better. His genius will be recognized and the Monetarists in Washington may yet get him clemency.  

Wed, 12/29/2010 - 14:51 | 836124 dark pools of soros
dark pools of soros's picture

Madoff is the new Keynes??

Wed, 12/29/2010 - 13:45 | 835946 lbrecken
lbrecken's picture

Im so dam sick of these crook bastards its not funny.......

Wed, 12/29/2010 - 13:49 | 835955 lbrecken
lbrecken's picture

Yeh  HarryWanger so convenient just like Ben wants you to think.  You are such a robot its not funny spouting the OBAMA/BEN play book all year at every post.  How do you live with yourself you immoral fool.

Wed, 12/29/2010 - 13:49 | 835959 wiskeyrunner
wiskeyrunner's picture

The Federal Reserve now owns the United States Of America. They can now use the stock market as there tool to get what ever they want. Make no mistake the flash crash was a warning shot by them as to what they can and will do if there power is ever questioned.  

Our sleazy politicians have sold us out. But here is an interesting fact. Fact more and more stock holders have bailed, so the Fed will use the market to twist the very people they serve.

Wed, 12/29/2010 - 14:08 | 836014 plocequ1
plocequ1's picture

Yes, But the charts, The charts.

Wed, 12/29/2010 - 14:14 | 836028 TruthInSunshine
TruthInSunshine's picture

Tyler, my wish for ZeroHedge, either this week or in the New Year, is to see a detailed analysis of exactly how QE funds are making it into equity markets.

Before anyone prematurely balks or protests that "we've all seen this," we actually haven't in any concrete, irrefutable way.

We've read and heard implications, theories and such, but we've yet to come across a detailed analysis demonstrating or strongly supporting how and where the QE are flowing in a method that supports equity levels.

I know that it is suggested that when The Fed buys Treasuries from Primary Dealers ('PD' or 'PDs'), giving the PDs a nice commission in the process (which is completely unecessary), that theory has it that the cash the Fed uses to buy those Treasuries ultimately flows, at least in part, into equity purchases.

My inclination is that this, in fact, is happening, but a detailed analysis would be fantastic if it showed correlation and causality.

Wed, 12/29/2010 - 14:51 | 836127 dark pools of soros
dark pools of soros's picture

you mean you want transparency?? Transparency??  we talk'in bout Transparency??

Thu, 12/30/2010 - 02:12 | 837269 TruthInSunshine
TruthInSunshine's picture

Is that what it's called?

It's been so long that we've seen it, or tasted it, that I forgot the term.

But yes; a little bit of 'transparency' would cure some and maybe a lot of what ails us.

Let's find out who the real criminals are (or confirm it), find out what they've been up to in great detail, and then take it up with them, face to face, if you know what I mean.

Wed, 12/29/2010 - 15:22 | 836212 Boilermaker
Boilermaker's picture

Money flowing like mad into the REITs again....

SPG just eclipsed $100 per share at > 60 P/E...

Why not...just all kinds of crazy buying pressure for it just days before the new year.  Scottrade accounts must be blowing up with all the SPG mouse clicking going on.

What a fucking joke.

Mon, 05/16/2011 - 21:50 | 1281479 tony1983
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