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New York Fed To Raise SOMA Limit From 35% To 70% Per CUSIP
One of our more successful predictions in advance of QE2 was that the Fed would raise the SOMA limit on holding at most 35% of any one treasury CUSIP. Sure enough, one of the paramaters of the QE2 launch included an indefinite lifting of the SOMA barrier. CNBC has just reported that the Fed will impose a new SOMA barrier of 70%. Of course, just like the US Treasury limit, this is a token number and can be removed on a whim - after all, the Fed is not accountable to anyone. We expect this new revised limit to be eliminated concurrently with the announcement of QE3 (or QE4 at the latest). In the meantime, this will have an impact on POMO dynamics as various treasurys that approach this barrier will see their buybacks slowed down. This is only relevant if one is involved in the Fed frontrunning business. Which these days is everyone.
We will post the official press release once we get it.
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I just got it.
There will be no QE III
Only King WIlliam the whatever and Queen Middle weighs a ton!
Then TSHTF.
So when is QEII going to peter out again?
Mark my words!
;-)
ORI
http://aadivaahan.wordpress.com
Cue trademarked Buzz Lightyear catchphrase.
Morning bears. Futures surging as usual. :) Depression??? I don't hear that talk anymore. Loos like I was correct- '667'= once in a life time low
Just gonna take some more gains this morning, after another great year.
America is coming back. Tax breaks just extended. If Obama is wrong then so is Ronald Reagan. Prospects for Obama's re-election looking swell for 2012. Good luck "taking back your country" Tea Party, you lost! Republicans screaming about S.T.A.R.T, Gays in the Military, Julian Assange and Tax Breaks for Millionaries
Business as usual begins again in 2011. Another "grass roots revolution" will be absent for at least another generation as the economy recovers and more politicans lie to get into office.
Enjoy the holidays. Thanks to ZH for all
Food riots spreading, commodities rising through the roof, tax breaks minus relevant spending cuts, and yes Regan was wrong (trickle down economics has been proven by many to be wrong and incorrect). So yes 2011 will be fun, but not in the mid 00's type of fun.
*yet another duplicate*
Drinking hopium so early in the morning is a bad sign. Seek help. The first step to solving your problem is admitting that you have one.
Deleted double post.
"Rules? RULES? I don't need no stinking rules. I make the rules."
Overheard in the executive men's room at the Fed. My spy informs me it sounded like Bernanke was drunk......on power.
I suppose buying Trashuries through Cayman Islands shell corporations is soooo 2009.
What are the chances of raising the limits to 125%. Since there are no more laws, either man-made or natural, I think it could be cool. Would that then make a one dollar bill worth $1.37? Far out.
"This is only relevant if one is involved in the Fed frontrunning business. Which these days is everyone."
- Only true if you are connected to the finance/banking industry. Joe Six Pack gets robbed again!
Treasuries = $$, toxic assets = $$, debt = $$. Life is good if you are too big to fail.
Wow! The Fed loves to create bubbles so much, that one would think "The Bernak" spends his day in a bathtub making bubbles come up.
QE 1, 2, 5, 10 or 50 has nothing to do with improving the economy. Any grad of econ 101 can see that. What the various QE's will accomplish is the public acceptance of a Fed strategy of puchasing government debt on an almost daily basis with printed money. This acceptance will come in quite handy as we go from $700 mil pomo to 7 bil to 700 bil and so on. Just a giant mop up operation of the con that has played out over the last 30 years.
Yes it is rigged to the upside. Buy the dips is all the rage man, get with the program, make some free money, zero risk in stock index futures.
Don't look now, but this change looks huge for the bond call of the much despised Rosie.
They will have to monetize until the nominal US$ denominated Debt to GDP levels are back to about 125% or so, which means that the US$ will have to be debased to 1/3rd of its current value.
They are trying to save their buddies in the financial sector first, letting the economy founder. Not sure how they think they are going to pull this off. Looks pretty bad to me.