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POMO Results: PM6 All The Way, 71.1% Of Total
Earlier we wrote the following:
Today, the Fed's openly fraudulent operations desk will buy back $6-8
billion of bonds maturing between 01/31/2015 – 06/30/2016 starting at
10:15 am Eastern. Below we present a table showing the 10 cheapest
CUSIPs that the Fed SHOULD be buying, considering that it should be monetizing, as it is supposed to, the best bang for the buck bonds. Note that nowehere in the list is CUSIP 912828PM6 due 12/31/2015 or the last 5 Year auctioned off, which is in fact one of the bonds trading richest relative
to the entire spline. In other words, if the Fed ends up accepted a
bulk of PM6, someone in Congress should really pretend they give a rat's
ass about the 300 million or so US citizens raped daily by the
kleptocratic elite, before said (mostly armed) 300 million finally
realize what a complete criminal fraud the PD-FED complex is.
Here are the 10 CHEAPEST bonds:
Note the relative RICHNESS of PM6.
And here is the result. Note the red CUSIP, which was 71.1% of total!
We are speechless.
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HOLY CANNOLI! WHAT THE EFFFFFF IS GOING ON! LORD GOD I PRAY PLEASE COME AND WIPE THE SCUM FROM THE EARTH!
I'm not counting on getting any divine intervention here, like the preacher in Blazing Saddles said 'Son, yer on yer own!'.
Well if GOD doesn't then who? NOBODY!
Andrew Jackson was good. Men like him simply don't exist anymore. He was nuts but hated monopolies and foreign owned banks.
All I know, is I'd rather be called a "nut" and do good towards fellow man than to be a filthy rich fraud raping the common people.
But Goldman is doing God's work. Didn't you hear?
UK economy in recession in 4Q 2010 - nary a word on the topic anywhere.. not even on ZH..
Hey if america is dumb enough to just sit by while this raping goes on day after day, then they deserve what theyre getting. Totaly bankrupted x10 generations. But theres no point in talking about downline generations, most will have none.
Calling Ron Paul.....
Why? Ron Paul has been in Congress for 30 years. He is complicit in this all the way.
@dracos
A good warrior knows when to avoid battle and when to engage. The Pauls are acheiving critical mass.
Because he is now the chair of the House Domestic Monetary Policy Subcommittee. The Bernank will have to answer more questions than he cares to now. I can't wait.
God, I hope you're right. But he is a political animal and I think Congress has abrogated most of their rights to the point of impotence.
Paul has a pretty good record on fiscal issues and to date he has been stymied for the most on his attempts to shed some light on the Fed. True, he is a politician but he may be our last best hope in the war on the moneymen. I have more faith in him than most when it comes to actually standing up for the common man. We shall soon see...
The Feral could save money by giving admin log in credentials to the file clerks at the PD's...
http://www.youtube.com/watch?v=2VSYmGSJtCA
can somebody explain why this is a big deal? I don't understand this. I'm to much of a Noob to understand this :)
Hell Sudden Debt, the reality is 99 out of 100 people would just give you a blank stare if you asked them what POMO is. But they do know all about Snookie flashing her cootchie in another drunken stupor and ARE prepared for the SuperBowl party!
What's needed is a simple cartoon explaining POMO and who wins and loses in the various transactions.
when compared side by side, Snookies privates are slightly smaller than the POMO
The Fed is working extra-hard to pay the highest price for the lowest value. It is literally a cash-pumping for automatic (guaranteed) profits to the Primary Dealers (e.g., "Friends of the Fed"). This is not monetary easing, this is taxpayer raping.
The taxpayer is paying way too much for badly priced stuff so that a few private parties can pocket hundreds-of-millions in guaranteed cash for a few minutes of work (literally).
PD list as of 11/02/10 (source http://www.ny.frb.org/markets/pridealers_current.html)
BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies & Company, Inc.
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
UBS Securities LLC.
They need the money for sure.
What kind of annualized returns are the PD's generating off this taxpayer ripoff?
In addition to the great explanation given from my esteemed avatar friend, Mikla... I have another note to add.
Piling on the purchase of the PM6 issue is about as a direct form of monetization one can get, yet still skirt the rules. The Fed is essentially saying "we don't give a rat's ass how expensive the notes are... we want to buy a shitload of freshly issued 5-year notes".
Taxpayers would be much better off buying this crap from Treasury Direct, than to have the Primary Dealers receive an all too easy spread for being the middleman of choice.
This is not monetization in its purest form-- it's monetization PLUS a subsidy to the Primary Dealer Network. NONE of these dealers are hurting, by the way.
The theft really needs to stop.
What do the PD's do for the Fed in return for the payments?
Everything they can do to fine tune the economy into "robust growth", that's what.
I'd like to hear anyone cite some form of market manipulation that the PD-Fed complex would not participate in. anyone?
I think it means they've got their fingers in EVERYTHING!
It's cash for clunkers. But instead of the government paying too much for old cars, it's paying too much for new bonds. It shouldn't be buying bonds in the first place (taxpayer rape #1), but now that they are, they're not even looking for good deals (taxpayer rape #2). It is just a backdoor way to funnel money straight from the taxpaying middle class to the banking class.
@SD
Bernank Sack is skipping over discounted bond issues to purchase healthier, newer issues. Why would an auto dealer buy back a 2011 Ford Explorer when it could get a heavily discounted 2008?
How do i get to be a PD? i've got 100K i can use monthly to buy bonds and sell back to the Fed for 120K.....
We need a new fruit, 'banana republic' is starting to be too nice of a description.
Rotten Mango Republic?
Nice. Come to think, however, the 'republic' part might some adjusting también.
Corn Confederation
http://cheezburger.com/View/761584384
Perez Hilton Republic?
well of course. if you're going to print money why not use the most efficient instrument/highest price?
Render unto Blankfein the things that are Blankfein's, and unto God the things that are God's.
I am the Lloyd, Thy Blankfein, you shall not question ME.
Tyler, is it possible to have a graph of the submited to accepted ratio since QE1?
What is this # 2 in 2 weeks? Now we know where the volume went.
for us short bus riders does this suggest that certain folks got tipped on which bonds will be bought and thus the richness? Which is then veryfied by it's being 71% of repurchased paper ?
It's not even "getting a tip." Tyler has shown you precisely how the scam works, but let me put it in layman's terms.
The treasury has auctioned off bonds. The Federal Reserve is printing money to buy them back. Tyler's list shows you the 10 bonds that would benefit the US citizens the most because they are cheaper for the FED to purchase. Earlier, in the "Frontrunning" post, he theorized that the worst of the bonds would be purchased by the FED from the big banks and specifically called out PM6 as the worst bond to hold, and therefore the one that the FED would buy back from the banks in order to transfer their losses onto the taxpayer.
Then he confirms his theory with this post.
Basically, the FED and big banks are fucking the US Taxpayer. And this is happening every single day there is a POMO. The FED buys the most toxic shit from the big banks and transfers the losses to the citizens.
Thank you!!
Then why not the E6? P6 isn't the richest on the list. I'm trying to understand the mechanics of this too.
A lot of this has to do with direct monetization.
I think if you look back at the same time last month... when the Fed was targeting 5-year notes, they were more than likely buying a shitload of the "E6" issues as well. It might not have been as overvalued back then as the table implies today, but I have a feeling it was.
Today, the Fed wanted to target FRESHLY ISSUED 5-year notes. They did not give a damn what price they paid for it, as they are the printer of last resort. The primary dealers get away with the ultra-easy middleman fees, as the taxpayer would be better off having the Fed directly picking these things off in auction.
Ben BerFakey needs to have his feet to the fire on these "will will not monetize the Federal debt" comments. Not only are they doing so, they are not even taking into account what is in the taxpayers interest.
I sure hope and pray Joe Sixpack starts to "figger" this out. It's about an open form of taxpayers theft as it can get.
what's the total monetization for today? thought it was somewhere +/- 25 bln?
God bless America and its sore ass...
Buy Silver, its almost free today.
EVERYONE SLAM YOUR CONGRESSIONAL REPS WITH NUMEROUS EMAILS AND CALLS REGARDING THIS REPEATED RAPING WE ARE GETTING! GIVE THEM DETAILS AND "DEMAND" ACTION!
Fuck it - the poli's are a bought off joke and we as a nation are populated with imbecilic citizens. The sooner this runs it's course the sooner we can get through the sacking of Rome...er, DC. The sooner we can begin to rebuild. There is no "fixing" this (of course we could but not with this system and not with these citizens).
Nope, it's time to hope for an acceleration toward the breaking point rather than trying to veer away.
hambone, that's EXACTLY what the Fed hopes you will do...nothing.
The more chatter the elected ogli's get, the more they may suspect that "the jig is up". All it takes is fear of dashed reelection hope to be implanted, and maybe, just maybe, something will happen.
Soup - tell me the difference between the Repubs and Dems? Tell me the difference between Bush and Obama? Tell me the impact on the Fed, the Treasury, the financial system from Bush to Big O? Net net, these are front men for those lobbyists, the money interests behind the scenes that are the true puppet masters. Belief in political change with an electorate so easily misled and lied to is mistaken. Those running the show know not to take away what is given...that would really piss folks off. Don't expect SS or Med or Welfare programs to be cut back. Sure, they'll be political theater but they know to give the people some but inflate the prices more. It's a winning strategy.
America is like a drunk who is being enabled. Only real change will come from hitting bottom. Rock bottom. Waking up in a gutter one morning, puke in our hair, dollar collapsed, bond markets gone. Then and only then when we realize where we are, what we've become can we have the vision to rebuild ourselves. Then and only then can we start remembering the importance of providing for ourselves, living within our means, working hard and saving. The great depression taught a whole generation what was important and what was superfllous. Unfortunately we've just decided via technology or financial engineering that these basics no longer applied to us.
i am writing all my senators and reps today regarding this issue. it is now a pattern since we have seen it several times recently.
two problems exist with this situation that i see.
1. Fed is monetizing debt almost instantly now (using primary dealers aka big banks as a one week go between)
2. Fed is overpaying for the bonds from the big banks and thus screwing taxpayers and to the benefit of the banks
this cannot go unchecked. i urge you all to do the same.
the real concern from here forward is that this pattern will continue as that will lead to further inflation and further instability among weaker countries.
Nomura list again...
http://www.businessinsider.com/governments-food-price-inflation-2011-1#18-tunisia-8
Yeah, you want to make sure your Reps are getting their fair share in bribes out of this.
I'd hate to think they missed a chance to line up at the public trough.
ZH reports what others prefer to ignore. Thank you for that.
The Bernank promised he would not monetize the debt so you all must be misinterpreting what is going on here. He also said he is "not printing money". He has aPhD in econ from MIT and thus should know what he is talkin' about.
Now what? Please advise. I am a Taxpayer. I am confused.
You're fucked. That's what is next.
Same goes if you are an investor - you're fucked. Same goes if you intend to play by the rules - you're fucked. Same goes if you try to save and then spend - you're fucked.
This nation is all about the immoral and profligate profiting on the backs of the poor, weak, and uninvolved. Profitable strategies are now all about picking the next bailout, the next corporate giveaway, the next moral hazard.
Agreed, except you try to pin it on a uniquely American problem. This is the same bullshit going on in Asia and Europe...perhaps even worse.
Suppose you are right...just believe we are at the epicenter.
Ok. Thanks. I will finish eating my eggs now and then pray for the lord to put me on the right path.
Have you thought about moving to Montana, marrying a fat american woman, raising rabbits and letting her cook them for you?
No, Ive been thinking north of Montana.
Looks like the markets are about to pull the obligatory crazy Ivan.
It's the opening churn, 11:15am turn, and "close green" burn.
As usual, the REITs are actually UP and getting ramrodded higher at every sell off attempt.
IYR and RMZ are up, up, up and climbing.
Simply amazing.
boiler, i know it is frustrating but it is a case of "can't see the forest for the trees". other more important indicators are flashing giant warning signs right now.
I don't think there is a bigger canary-in-the-coal-mine than CRE. If that falters, it's over...and I mean really over. The banks would be indisputably insolvent. So, the unrelenting attack on the REIT short interest is a must.
I've watched it for long enough now to know that it absolutely has to be the biggest fraud in the market. I suppose others are simply piling on to get the fluff-job upward.
I would *think* that...at some point...it would cease and be allowed to fall to somewhat astronomical valuations rather than overtly astronomical values. But, no, the daily absurd run-ups, squeezes, and IN-YO-FACE jack jobs just don't stop.
I don't disagree that the entire market is showing investors the red card. But CRE is patently ridiculous and has been for some time.
RMZ now up almost a full percent while the broader markets are falling.
CRE will go when the rest of the market goes, without a doubt. It has been one of the stupidly unpredictable sectors in the last couple of years. I got shaken out of hefty SRS calls in early Sept 2008 so believe me when I say I share your frustration.
However, the most important leading indicators that I see; copper, crude, 10 year, retail, USD. 4 out of 5 are sending the same message they sent in Jan'10 and Apr'10. USD is the lone holdout right now, thanks to Trichet's inflation remark. When the USD comes around (and it will) the market is going down for a correction, not likely an overall long term top just yet. The long term top will probably be found between here and June.
Is there a chance they (the PDs) want to hang on to the cheaper bonds, as those are 'earmarked' to be used in the T-note futures settlements (cheapest-to-deliver)?
(PDs to Sack: "No we can't give you those, we need those to guarantee a functioning market elsewhere, but the Lloyd says you can have some of them fresh ones here")
The government is bought and paid for; they will do nothing to stop this. The entire country is on the grift; 'the business of America is fraud' at this point. You are better off preparing for the inevitable end than writing Congress.
Armed with this knowledge, I'd rather be 10 days too early preparing than 10 seconds too late.
Took profit today in my short Eurotrash banks and placed an order for X eeagles. Should arrive JIT.
Thus I am loaded to the gills with food, ammo, supplies and enough stuff to keep myself and my family safe and alive when it all comes crashing down in 7... 6... 5... 4... 3... 2... 1...
Can someone do me a favor???
Can somebody calculate what the 2 scenarios of buybacks look like for a $6billion sample?
Sample 1, showing the POMO of one of the listed cusips that should be bought back.
Sample 2, showing the POMO of PM6
...so I can see what the Net vs Net for the brokers and the taxpayers/Gov't.
I would do the work myself, but I genuinely don't know how the calculations work. (I can assume, and do my own math, but I'd hate to work with incorrect figures)
I guess the way I see it is this:
It still just amounts to a term Repo. (as opposed to overnight repo, TD, CD, MMKT)
The Primarary Dealers who are borrowing at 0-ish rates, are just cashing in on the interest float they get... and this float is the profit. As to whether they profit/rape us on the higher or lower yielding T's seems minor in comparrison to the overall process of keeping the liquidy machine running.
The buyback just funds the next auction? Doesn't it? (ya see... my lack of knowing the official numbers and needing to see a sample of the 2 scenarios is why I keep thinking that I am missing something.)
Thanks in advance ZH society.
All the best,
Rich H - Miss America
The UK has been very very quiet as of recent... makes one wonder...
Must be wabbit season.
You job as a taxpayer, is to endlessly shower the bankers with wealth and splendor.
I wouldn't worry much about stopping this at this late game. We'd have to conquer hundreds of new planets and loot all of their wealth to cover the current debt load. the Planet Earth doesn't have anywhere near the productive capacity to make good on the debts that the world owes to a handful of bankers. It doesn't matter that the bankers really did do anything to earn our indebtness except sign our names without permission.
It is what it is.
In ten years, it would take the loot and pillage of millions of civilizations to cover the debt. The nature of the beast requires that it rise exponentially or it will collapse.
Soon enough, the bubble headed bleach blondes will be talking about debts in the quadrillions of dollars, while batting their lashes seductively.
Uncle Sam needs an industrial sized jar of Vasoline.
Who wants to guess we close green ahead of Big O's state of the union speech tonight?
Anybody think we'll close down? Anybody?
I'm curious to know if the Bank of England are up to the same shenanigans. I'm not in the financial game so I wouldn't know where to look. Are there any UK bods on this board who know where to look for the same MO? If the FED's at it, it's a sure thing the BOE is up to its neck in it.
Can someone quantify the actual $ amount that these transactions basically cost over what should have been paid?
Ok, game theory predicts that market participants will soon figure the scheme and bid up every newly issued paper. To do that they will sell bonds, primarily those issued a long time ago. This means, you can short now then 10s and 30s.
The motive of the Fed is probably to achieve a higher Bid to Cover Ratios to tell everybody that everybody loves US debt. As usual, they fail to see that this money will be withdrawn from somewhere else and I doubt this will be the PMs.
The motive of the fed is always the same, increased bank bonuses. Period.
Ahhh, now I get it.
The Fed is running POMO as a bakery -- paying premium for freshly baked treasuries.
Do the PDs toss in a complimentary toaster to sweeten the deal?
What are the annualized returns for the PD's in this scam?
Brian Sack of Shit has been busy.
The banks are supposed to use these profits to pump up the US equity and commodities markets, right? So it's perfectly reasonable that POMO profits be as large as possible, given the FED's mandate. The Bernank is not a fool, he's a POMO Sapien.
I made this video to help folks understand what the Fed is doing.
http://www.xtranormal.com/watch/8290042
Curious inquiry. Why is it that when theft takes place as such, that people who have "figured it out" tend to act privledged and assume, therefore, that "the consumer" is clueless?
I mean I know at some point we're all searching for truth and there's no doubt many on the curve are seriously not paying attention to the world around them. However, it seems like the perfect propaganda when "those in the know" allow those who "think" they've figured it out to feel superior and therefore, apparantly informed.
Because when someone thinks they've "got it" and that the majority doesn't, that person tends to become tranquilized in his knowledge while standing on a superior platform. To me, seems like a good gig from the theives to create a false sense of strength for the few who question the crime...
Well, no matter how you slice, it's a good gig for the thieves that are stealing everything.