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POMO Starts

Submitted by Tyler Durden on 10/15/2010 10:21 -0400

With today's POMO focusing explicitly on the most preferred part of the curve, the 5-7 Year "Belly", we expect today's monetization concluding at 11am Eastern to be be a smashing success, with a huge Submitted to Accepted ratio, as this is precisely the part of the curve that investors have been frontrunning in advance of the Fed's repurchase activity. Failure to get a number around 10 will be cause for substantial concern.

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Fri, 10/15/2010 - 10:29 | 652624 Cvillian

Methinks he's not gonna be able to change this fallout today...maybe Monday.

Fri, 10/15/2010 - 10:32 | 652642 Larry Darrell

I hope you are wrong, but only for my parents' benefit (see comment below).

Fri, 10/15/2010 - 10:37 | 652651 Cvillian

One thing I have learned is to never underestimate the power of a leveraged government-financed buyer. That being said, looks like a flurry of buying is hitting the tape. In the words of Church Lady from SNL, "Isn't that conveeeenient"

Fri, 10/15/2010 - 10:27 | 652627 99er

Chart: SPX

In reverse.

http://99ercharts.blogspot.com/2010/10/spx_15.html

Fri, 10/15/2010 - 10:29 | 652630 Dagny Taggart

and just like clockwork, at 10:15, the DXY lost its wood... http://www.marketwatch.com/investing/index/DXY

Fri, 10/15/2010 - 10:40 | 652666 Clark_Griswold ...

It would appear that Benny has more lead in his pencil than we thought...

Fri, 10/15/2010 - 10:44 | 652678 His Dudeness

And then the amount of lead in Barney Frank's ass... jussssssst about right.

Fri, 10/15/2010 - 10:29 | 652632 Larry Darrell

I got the chance to talk with my father for a good few hours yesterday as we took a round trip drive across the state and back, and during that time I tried to explain all of the circle jerking between the Treserve and the TBTF. He followed the general theme, but couldn't wrap his head around some of the details ("How is that possible?").

I told him to just trust me with the advice I was giving him (even though he thought I was slightly crazy), that all he had to do was watch the market go up on the dates I wrote down for him, which were the POMO dates.

He said if I was right about the manipulations, he would take my advice, cash it in, and put his money to work in more physically tangible items.....

I hope I wasn't too late.

Fri, 10/15/2010 - 10:40 | 652636 plocequ1

Now that was easy , Wasnt it? Ben wants the market to go higher and it goes higher. When the Dollar goes below 60, Then i think Ben will take action.. Until then, Ben believes he has room to play. Update: OOPs market is down. Bye..

Fri, 10/15/2010 - 10:31 | 652639 Kreditanstalt

One day up, one day down, risk on, risk off...all with monopoly money that you and I never see...with this manipulated bullshit we all have no choice but to become buy-and-hold types...in GOLD

Fri, 10/15/2010 - 10:33 | 652640 hedgeless_horseman

S&P down...

On a long enough timeline

the success rate for

every racket drops to zero.

Fri, 10/15/2010 - 10:38 | 652660 Dr. No

The market can remain irrational longer than you can remain solvent. A small part of me thinks Keynes wrote his theory as a joke, perhaps a dare.

Fri, 10/15/2010 - 10:33 | 652646 system failure

Let's take worthless printed money with nothing to back it and declare is has value because the FED says so and purchase American Government Debt with it because they cannot make the interest payments on their (our) credit card anymore.

How do you capture wild ass free pigs?

Too many people with their hands out and too lazy to work. There are too many give away programs. It needs to stop.                   There was a chemistry professor in a large college
  that had some exchange students in the class. One day
  while the class was in the lab, the Prof noticed one
  young man, an exchange student, who kept rubbing his
  back and stretching as if his back hurt.

     The professor asked the young man what was the matter.
  The student told him he had a bullet lodged in his
  back. He had been shot while fighting communists in
  his native country who were trying to overthrow his
  country's government and install a new communist
  regime.

  In the midst of his story, he looked at the professor
  and asked a strange question. He asked:

  "Do you know how to catch wild pigs?"

  The professor thought it was a joke and asked for the
  punch line. The young man said that it was no joke.

"You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come everyday to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming.

  When they get used to the fence, they begin to eat the
  corn again and you put up another side of the fence.
  They get used to that and start to eat again. You
  continue until you have all four sides of the fence up
  with a gate in the last side.

  The pigs, which are used to the free corn, start to
  come through the gate to eat that free corn again.

  You then slam the gate on them and catch the whole
  herd. Suddenly the wild pigs have lost their freedom.
  They run around and around inside the fence, but they
  are caught.

  Soon they go back to eating the free corn . They are
  so used to it that they have forgotten how to forage
  in the woods for themselves, so they accept their
  captivity."

  The young man then told the professor that is exactly
  what he sees happening in America . The government
keeps pushing us toward Communism/Socialism and keeps
  spreading the free corn out in the form of programs
  such as supplemental income, tax credit for unearned
  income, tax cuts, tax exemptions, tobacco subsidies,
  dairy subsidies, payments not to plant crops (CRP),
  welfare, medicine, drugs, etc. while we continually
  lose our freedoms, just a little at a time.

  One should always remember two truths:

1) There is no such thing as a free lunch

2) and you can never hire someone to provide a service
  for you cheaper than you can do it yourself.

If you see that all of this wonderful government 'help' is a problem confronting the future of democracy in America , you might want to send this on to your friends.

  If you think the free ride is essential to your way of
  life, then you will probably delete this email.

  But God help you when the gate slams shut!
  AMERICA ,The home of the Free
  Because of the Brave.

Fri, 10/15/2010 - 10:45 | 652686 sethco

Um, yeah, heard that one before. Different characters and different animals, but the same tired Jingoistic analogy. WTF does this have to do with the POMO?

Fri, 10/15/2010 - 10:56 | 652731 system failure

corn is money pomo

Fri, 10/15/2010 - 10:33 | 652647 Dapper Dan

I am long Chilean miners.

Fri, 10/15/2010 - 10:34 | 652650 RobotTrader

POMO not working today.

Bernanke failed.

Risk assets everywhere are getting dumped.

Fri, 10/15/2010 - 10:41 | 652670 Dagny Taggart

If the fed stomped DXY, and everyone was busy with risk on-off, did Bernanke really fail?

Fri, 10/15/2010 - 10:43 | 652674 Dr. No

AAPL still holding. I am starting to think AAPL stockholders/buyers are like apple customers. They are just happy to have the products (shares). They feel a bit of superiority over holders of other stocks and wont sell since that would result of them not being part of the cult..er club.

Fri, 10/15/2010 - 11:52 | 652928 Cognitive Dissonance

There is nothing quite like jumping on a winning bandwagon, particularly when it also "pays" you in currency as well as the normal endorphin (drug) high.

It brings new meaning to the term "Apple junkie" doesn't it? :>)

http://en.wikipedia.org/wiki/Endorphin

http://en.wikipedia.org/wiki/Substance_dependence

Fri, 10/15/2010 - 10:47 | 652691 Kreditanstalt

But take note that oil, precious metals and energy are morphing, albeit perhaps gradually and slowly, from their perverse status as "risk assets" into "flight to safety assets", which is what they SHOULD be: they are not off as much as one would have expected...

Fri, 10/15/2010 - 10:38 | 652659 Yikes

Banks: BAC, JPM, WFC. are getting crushed again today. Haven't seen any updates on Foreclosuregate today: yet.

Fri, 10/15/2010 - 10:44 | 652676 Yikes

Oh, there we go. S&P downgrades BAC from Strong buy to hold. Foreclosuregate is tightening its grip.

Fri, 10/15/2010 - 10:47 | 652692 reading

Credit watch negative...

http://www.zerohedge.com/article/presenting-david-teppers-holdings-blood...

Fri, 10/15/2010 - 10:40 | 652663 TraderTimm

Reminds me of that SNL Commercial - "BIG RED"

http://snltranscripts.jt.org/88/88gbigred.phtml

Of course, it would be renamed to...

"BIG FED"

Here he comes, from the central bank - Big FED!

Fri, 10/15/2010 - 10:40 | 652667 Silverhog

And what time is Ben's Necrophilia Anonymous Meeting?

Fri, 10/15/2010 - 10:45 | 652687 the not so migh...

QE2 = riot police and starving babies in the street.

Fri, 10/15/2010 - 10:50 | 652707 99er

Two Cents:

"Liar's Poker."

Ben Shalom losing Big Time.

Fri, 10/15/2010 - 10:50 | 652709 Yikes

POMO has had to work really hard today but it looks like they could pull it out. Imagine the market today without the POMO. Ugly

Fri, 10/15/2010 - 10:53 | 652719 assumptionblindness

It's time to get some cash out of the banks, folks! We are sure to get a weekend surprise about the banks. I promise to be first in line before the greenbacks run out! THIS IS NO JOKE!!!

Fri, 10/15/2010 - 11:15 | 652788 Kina

I took out a stash of cash hidden at home, month ago, just in case, and Im in Aussie.

Dont want bank wait for a bank holiday if our property bubble bursts.

Fri, 10/15/2010 - 11:36 | 652736 carbon based unit

cbu's observations:

1] big guys need bag-holders, usually retail plays this role

2] retail isn't particpating [so long, and thanks for all the fish]

3] in lieu of traditional bag-holders, the sharks at the top will start working their way up the food chain from the bottom

4] everyone knows POMOs lift the markets

FOLLOWUP: at more than $4.5b today's POMO was something like 50% larger than originally expected. $5b POMO days usually translate to +200 dow point moves. buckle up.

Fri, 10/15/2010 - 11:19 | 652805 depression

Perfect V Low ... thank you Brian and Ben, you guys are the best ! See ya Monday 10:15am sharp.

Fri, 10/15/2010 - 11:25 | 652820 Johnny Yuma

Great job Brian Sack! You've managed to have your goons buy right off of the same level as yesterday's low and provide an excellent vertical rally! This is becoming so predictable, it's ridiculous. Short at the open, reverse on the first divergence and go long. Get paid by Liberty 33 Bank with their monopoly money.

Let's see how they do when we get half way back for the day. They'll probably squeeze out the morning shorts and rip their heads off but it would be nice to see them get hurt for once. But I won't hold my breath...

Sun, 10/17/2010 - 04:37 | 656160 Grand Supercycle

GOLD updated chart showing parabolic move.

http://stockmarket618.wordpress.com

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POMO Starts

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