POMO Begins

Tyler Durden's picture

Today's POMO, focusing on 2013-2014 bonds has just started. As we proposed yesterday (in what led to quite a lively and interesting debate), now that even Goldman is advising clients to frontrun POMO, this may have been the top tick to the POMO frontrunning operation. A red close may just confirm that. But far more important than equities, we highlighted, courtesy of MS, just which CUSIPs will most likely be monetized (and thus submitted) the most by the Fed today. If indeed these are confirmed to be the bonds put to the Fed the most, it will merely erode one more layer of credibility the Fed has of an impartial and non-transparent organization.

As we suggested yesterday:

Saving the best for last: tomorrow's POMO will focus on bonds between 2013-2014. Here are the bonds most likely to be bought:

  • 1.750% of 4/15/2013
  • 1.375% of 5/15/2013
  • 1.125% of 6/15/2013
  • 0.5% of 10/15/2013
  • 0.75% of 09/15/2013

Buy these today for a flip to the Fed tomorrow. Don't forget to apply a few million turns of leverage.

We shall see if these are indeed the most frontrunnable issues when POMO is done in 30 minutes. In the meantime, here is the announcement, with the permitted inclusions below, and the above five bonds highlighted in the list: