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Last QE Lite POMO Closes As Fed Monetizes $6.3 Billion In Debt

Tyler Durden's picture




 

As of 11 am the last QE Lite POMO ended, resulting in a resumption in a sell off in risk right on schedule, as even today's $6.3 billion in monetized notes due between 2016 and 2020 is insufficient to keep stocks higher with a jumping dollar. The submitted to accepted ratio was 4.38, up from 3.49 previously. The market is now looking to November 10 when the brand new, and much larger QE2 POMO schedule is announced by the FRBNY.

 

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Mon, 11/08/2010 - 12:13 | 708155 Cookie
Cookie's picture

OT, but news like this is good to see. Asia has always understood gold.

http://biz.thestar.com.my/news/story.asp?file=/2010/11/8/business/732611...

 

Mon, 11/08/2010 - 12:16 | 708164 whatsinaname
whatsinaname's picture

is there a schedule for the QE2 POMOs posted somewhere or are they not done "cooking" the books yet ?

Mon, 11/08/2010 - 12:21 | 708178 Obama2012
Obama2012's picture

http://www.newyorkfed.org/markets/tot_operation_schedule.html

very thankful they are tryin stuff. even if it doesn't know what conseqwences are, better than doing nothing. we got the car out of the ditch and we aint lettin it go back in without a fight

Mon, 11/08/2010 - 12:23 | 708187 IrishSamurai
IrishSamurai's picture

Paul is that you?  Has the NYT let you out of the padded room?

Mon, 11/08/2010 - 12:41 | 708251 Obama2012
Obama2012's picture

i don't know why i'm being "junked". stocks are up, borrowing costs are down, foreclosures are being halted and investigated. what more could anyone want from obama? must be a bunch of angry shorts here...cut losers and get with the program

Mon, 11/08/2010 - 12:57 | 708313 French Frog
French Frog's picture

are you just out of pre-school, in which case you won't be old enough to vote by 2012 anyway

;-)

Mon, 11/08/2010 - 13:29 | 708491 erik
erik's picture

- the US dollar is dramatically lower

- moral hazard has spread throughout the country

- food stamps usage is still increasing

we are witnessing the type of wealth divergence that signifies a 3rd world country and instability.  i lived in Ecuador, i have seen it first hand.  when 1% owns 90% of the wealth, instability is a guarantee.

Mon, 11/08/2010 - 12:41 | 708247 SheepDog-One
SheepDog-One's picture

'Tryin stuff'...WOW you should apply for next FED chief or next Nobel eCONomist!

Mon, 11/08/2010 - 12:29 | 708207 TooBearish
Mon, 11/08/2010 - 12:34 | 708228 PlausibleDenial
PlausibleDenial's picture

The pertinent data:

The next release of the approximate purchase amount and tentative outright Treasury operation schedule will be at 2 p.m. on November 10, 2010.

Mon, 11/08/2010 - 12:17 | 708168 zaknick
zaknick's picture

The French insist on world currency changes after meeting with Chinese:

 

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=20101105...

 

tick tock tick tock  

 

kabooommm!!

Mon, 11/08/2010 - 12:42 | 708253 SheepDog-One
SheepDog-One's picture

ZAKNICK yep the biggest story around that no one wants to talk about.

Mon, 11/08/2010 - 12:56 | 708307 zaknick
zaknick's picture

Actually, Zoellick (a Bush appointee) is desperately floating crap in order to hang on to some undeserved influence over the long run. The real debate will be during France's presidency of the G20 coming right up.

 

This will get interesting!

Mon, 11/08/2010 - 12:19 | 708174 Pringsh Peensh
Pringsh Peensh's picture

Am I wrong, or is this the first POMO in the series that has yeilded this poor a jump in stocks...since we've all been watching this so closely (thanks Tyler)

Mon, 11/08/2010 - 12:22 | 708183 wreynol4
wreynol4's picture

is there POMO on Wed or Friday?

Mon, 11/08/2010 - 13:24 | 708463 bobbymak880
bobbymak880's picture

Wreynol4

Wed at 2 PM the new POMO schedule will be released.

Mon, 11/08/2010 - 12:23 | 708185 unwashedmass
unwashedmass's picture

sweet....reality is kicking in....  i mean, QE is going to decimate, crucify, savage the savings of the peasantry....

discretionary dollars will be disappearing entirely...

so...let's think of things the peasants spend money on...

ah, carnival cruise lines -- cruises on the high seas for the peasants......

bye bye CCL.  really poor people (read the masses of US citizens) will be too busy trying to buy food and fuel to tour the carribean for five nights....even if packed in like a sardine.

Mon, 11/08/2010 - 12:23 | 708186 unwashedmass
unwashedmass's picture

 

anyone else got one or two we all can ride into the harsh glare of reality?

Mon, 11/08/2010 - 12:25 | 708192 LongSoupLine
LongSoupLine's picture

Today's POMO will take what should be a European sell-off day and shift it to a regular ol' "distribution day".  Fed mission accomplished...keep the market propped.

Mon, 11/08/2010 - 12:27 | 708199 spartan117
spartan117's picture

That strong-dollar policy speech didn't last very long on gold/silver.

Mon, 11/08/2010 - 12:28 | 708200 unwashedmass
unwashedmass's picture

 

maybe the fumes from the printing press overcame the bulls.

Mon, 11/08/2010 - 12:32 | 708218 Cognitive Dissonance
Cognitive Dissonance's picture

The Fed cockroaches must be a bit concerned that Gold and Silver continue to be strong in the face of EVERYTHING.

Mon, 11/08/2010 - 12:34 | 708223 shushup
shushup's picture

The POMO money is predictably going into the usual suspects....tech stocks.

AAPL, NFLX, BIDU, GOOG and AMZN up as usual.

The only reason PCLN is not with them is because of profit taking  into the already huge runup into todays earnings announcement after hours.

Mon, 11/08/2010 - 12:36 | 708231 Orly
Orly's picture

Submitted to Accepted Ratio: 4.4x

Isn't this what Bruce Krasting pointed out last night?

Mon, 11/08/2010 - 12:46 | 708269 French Frog
French Frog's picture

Wasn't there an article on ZH a while back listing not just the correlation between POMO days & UP days in stocks (which is not +1, far from it), but more importantly that a high 'submitted to accepted ratio' had a better correlation with flat/down days in stocks

Mon, 11/08/2010 - 13:04 | 708342 Orly
Orly's picture

Yes. Also another one about the lessening effect of POMO on the SPX...

Bruce's point was that there is a counter-intuitive disconnect between  outright Treasury purchases by the Fed and the demand for the reverb bonds the Treasury must create as replacements.  One would think that demand would dry up as more and more people offer their dollar-denominated assets for sale back to the Fed.

On the contrary, his idea is that the demand for new issues would skyrocket because there will always be a buyer of their holdings.  He uses the example of his trade in gold in the 1970's.  When the US government decided to sell gold, he figured the price would plunge but it didn't.  As more gold became available, the more people wanted it.

Interesting concept.  Today the S/A ratio was 4.4x.  Maybe he has a point?

See the post here:

http://www.zerohedge.com/article/qe-supply-dated-perspective

:D

Mon, 11/08/2010 - 12:51 | 708293 Me XMan
Me XMan's picture

What's the grand total for QE 1.5?

Mon, 11/08/2010 - 12:55 | 708305 I Am The Unknow...
I Am The Unknown Comic's picture

Let me start with a joke: what do you get when you cross 50 female pigs with 50 male deer?  The answer: a hundredsowsandbucks!

May I humbly suggest Tyler and/or William start a new game show called:

 "THE DAILY POMO GAMESHOW!!!!"

Contestants win money by answering such difficult questions as:

"How much do you want today?"

"What is your name?" (note: "PD" is a sufficient answer)

The ZH community could submit questions for the show - now that could get to be a lot of fun!

Mon, 11/08/2010 - 13:02 | 708336 Clapham Junction
Clapham Junction's picture

Thanks man, finally a useful post.

So the S&P should end up today eh? :0

Mon, 11/08/2010 - 14:04 | 708693 Myzery
Myzery's picture

Tyler,

Please put a link to the POMO schedule in teh ZH website main navigation.

 

Thank you.

 

Do NOT follow this link or you will be banned from the site!