Primary Dealers Prepare To Invest $27 Billion In Fed Money, Levered 30x Over The Next Month, To Buy High Beta Names

Tyler Durden's picture

The forced melt up higher once again resumes with no correlation to the recently prevalent Treasury butterfly, as whatever stat arb desks have not blown up in the September move are now once again correlating stocks exclusively with the AUDJPY in yet another chicken-or-egg catch 22. For those who prefer the comfort of a catch 33, we would be far more concerned why the butterfly has collapsed even as stocks are glued to VWAP as if with a tractor beam straight from Darth Vader's toilet. Of course, ES still have to close about a 25 point gap from earlier this month, when the ramp brigade just went truly apeshit. Daily divergences will close, but the real move will be when that particular gap with both the AUDJPY and the 2s10s30s is finally closed. Until then let's just all pretend we have a market. Here some may ask what's the point in fighting the Fed's almost daily stock ramping, and they may well be on to something: the New York Fed has just disclosed it will buy $27 billion in Treasurys between mid-Sept and mid-October. Using the Basel III blessed 30x leverage, this money, once it makes its way to the Primary Dealers, should be sufficient for a $750 billion leveraged push higher in risk assets. And just to prove that point, there will be a POMO on both Wednesday and Thursday. You didn't think a politically "impartial" Fed would allow a  market crash before the mid-terms now, did you?

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NOTW777's picture

bens in the tank - politically

Calvin Jones and the 13th Apostle's picture

Ben's in the tank to the banksters, and they need to make their money back somehow.

Boilermaker's picture

Huh?  You mean a 600 point hi-jacking of the DOW and 80 handle move on SPX in 9 trading sessions isn't organic?

You know what?  Fuck it.  They can have it.  I don't care anymore.  I'm not losing anymore money.  The dickheads doing this can play with themselves to the end of days.  I don't care anymore.

Spalding_Smailes's picture

Contrarian indicator, bear throws in towel.

Boilermaker's picture

Of course, because without any fundamental rationale for movement in equity values then we have to concoct some bullshit for the mental midgets to cling to.  Just the same as TA has grown so popular, the entire equity markets are now nothing more than a feeding ground for predators of idiots.  Everyone is searching for some absolutely abstract 'meaning' to it and constantly trying to invent some new 'indicator' or 'angle' on what *might* happen and why.  It's a pile of steaming shit and only seriously impaired dumb fucks don't know that.

Implicit simplicit's picture

Stick by your convictions man.

 Fuck what every day trader says. Don't be one.

 Don't be leveraged.

Short and wait and hold.

 Go to your grave with your convictions and you can hold your head high because you did what you believe in. Fuck them.

IrrationalMan's picture

agreed.  if it feels good, dont do it. 


also the advice on not betting alot is key as you can average down, or up in this case. 

Implicit simplicit's picture

Irrational man. Your avatar is wise for ina an irraational world and market, it is only the irrational line of thinking that is prepared for the outlier events that truly are game changing.

I'd say we're about due for some outlier news. In this world gone beserk we are overdue.

Red Neck Repugnicant's picture

No.  Don't stick to your convictions.  That's bad advice.  And don't trade based on how you'll feel at your grave site. No one is going to give you a gold-metal before they cover you with dirt. 


Sticking to your convictions and waiting for them to be proven right is a one-way ticket to insolvency.  

Adapt or die. 

Implicit simplicit's picture

Advice is relative. I don't use leverage. I don't believe in daytrading; therefore their mantras do not apply to my investing.

I will not go insolvent because I don't invest all my money, and I am not investing anyore than I  am willing to waste on insurance like my house, car, business etc...

There is more than one way to look at investing.I believe the market will collapse, and I am willing to wait.


skohiu's picture


it's hardest to short when you're uncomfortble, but that's the time to do it.

Implicit simplicit's picture

The only towel that I will be throwing in is the huge messy bib towel from feasting on the slop made while devouring the bull.

VWbug's picture

You know what?  Fuck it.  They can have it.  I don't care anymore.  I'm not losing anymore money.  The dickheads doing this can play with themselves to the end of days.  I don't care anymore.

must suck to be wrong 90% of the time.

i'd suggest being more open minded, but we all know some people prefer to be irrational about things.



Boilermaker's picture

I'm not 'wrong' at all.  And guess what aren't 'right' either.  That's the fucking point.  But, I know an ignorant fly-covered piece of shit like you can't grasp that.  To you, it's some sort of bravado bullshit and you're probably all of 25 years old...and a eurotard at that.

In short, just in case I wasn't clear, go fuck yourself.  This kind of game is just meant for dumb shits like you.  In the end, just like all other numb nutted retards, you'll be left broke and scratching your head wondering where it all went wrong.

VWbug's picture

sometimes i am right, sometimes i am wrong, the point is, i have an open mind, unlike you.

when the market goes against my beliefs, such as today, i have no problem admitting i am missing something and i go along for the ride or stay out.

I am bearish but made out ok today.

I figure if i can survive or even make a little on a bad day, think of how good things are when i get it right.

but then, i'm just a retard, lol, who won't have to work again.

sure makes me glad i'm not super brilliant like you, lol.

homersimpson's picture

"but then, i'm just a retard, lol, who won't have to work again" Even retards hit IPOs.. or brag about what they have on the internet - even though it can never be verified.


Abiggs's picture

Havn't you heard that retail investors are nonexistant in this market - Hate to break it to you but you can't outsmart the automated robots nor desks upon desks of "the brightest minds" the world has to offer...

A word of advice - follow your friends out the door before you lose all of the retirement income you've worked so hard earning under the hoods of those cars you fix everyday for a living...

Stop chasing the "trade your way to freedom" pipe dream you read about in investing books and sites like this which offer an "alternative" opinion about global capital markets that you plan on "making money" off of.


homersimpson's picture

"GROW UP ASSHOLE" - remember - Abiggs is always around during a bull run because he wants to inform ZH readers that he's always smarter than we are.

VWbug's picture

well ya see i made a living as a trader for 25 years, so i'm not exactly retail.

and, i am more often short than long these days, so no need to worry about me, i plan to make a killing if and when this market turns.

but i do well no matter which way it goes, which is the point many of you are incapable of understanding.

another difference is, when i am wrong i don't blame the fed, obama or the trilateral commission.

i'm happy you guys are dogmatic, like i said, how else would i ever get stocks sold to me at the bottom?

Boilermaker's picture

I have 18 inch dong.  Really, I do.  No, really, I do.

milbank's picture

"well ya see i made a living as a trader for 25 years"

Typical internet B*llsh*T.

If you really were you certainly wouldn't be dicking on these dopes about what a "pro" you are.


Nucking Futs's picture

Sorry to hear but you're probably not the only one hurting.  As much as I agree that with ZH fundamentally that the economics of this market is ass backwards and is in total bizzaro world, one of the perils of this website is to become a permabear.  The markets will do what they do (controlled by the puppet masters).

All this manipulation will probably come to fruition with the most glorious collapse of an economy the world has ever seen and all the bears will be able to make a trillion gazillion dollars worth of worthless paper money, but the writing was on the technical analysis wall that we'd see some sort of a rally.  The FED will do EVERYTHING they can to keep this charade up.  Stop fighting the tape and just go with the flow.

Someone on ZH said this quote but it stuck with me, "the markets will move in the direction that hurts the most people".  Trade objectively.  Good luck.

Boilermaker's picture

Thanks, but I'm not 'trading' anything.  I'm not interested in playing with a rigged deck, even if I 'win'. 

I appreciate the good words but, no shit, if I'm going to literally gamble, I'd rather put it on the Colts and enjoy the game or go to Vegas.

This has become truly worthless shit at this point and in my opinion.  I don't care if you're long or short.  It's fucking worthless.

Mr Poopra's picture

You echo my exact sentiments.  It has nothing to do with bears and bulls but the realization that the game is rigged.  At this point it becomes nothing more than a casino without the complimentary drinks.  I fear, however, that the actual crash is being postponed until the Nov elections, don't be surprised if the markets will continue their mysteriously arbitrary gains until that time.

Divided States of America's picture

When the shit hits the fan, I dont think making money shorting the apocalyptic collapse of the stock market would do any good. You can have millions of dollars in your account but the bank that its held is, is FUCKED, the counterparty of the other side of the trades are FUCKED, the institutions that are supposed to insure your account is FUCKED, and the country, which is runned by a bunch of self profiting politcians, is FUCKED.


Implicit simplicit's picture

Everyone getting fucked and not even enjoying it. What the hell has the world come to?

centerline's picture

Yeah - but it will be an interesting ride.


kind of like....

apberusdisvet's picture

That's why you don't put your Pms in a safe deposit box; "they" can close banks with no notice, any time, any where.

prophet's picture

a.k.a "max pain" 

Volume at price, open interest on options and futures, shorts, pump and dump, even predator algos, all use max pain as part of their foundation


Mark McGoldrick's picture

@ Nucking Futs

"the markets will move in the direction that hurts the most people"

I think that was me.  Midway down.


SheepDog-One's picture

I hate this world, no matter what theres always some evil there behind the curtain. Fuk it all FTW.

Red Neck Repugnicant's picture

It is obvious that you hate life.  Your comments - especially the one about wishing for another 9/11 attack -  are indicative of someone who lives in total darkness. 

I think you've spent a little too much time drinking the ZH kool-aid.

If you're a pessimist and are looking for reasons to hate the world, ZH is the drug for you.

Consume with caution.  

StychoKiller's picture

Warm hemlock is an acquired taste...

Trimmed Hedge's picture

Aww, Boiler...

So how much did you lose today on your ill-timed puts?

Judging by your ranting today, I'd say a good 15-20% of your capital -- if not more.

I know, I know... the market's rigged, and it's everybody's fault except for the person doing the shitty trading.

Door, ass, etc.

Boilermaker's picture

Uh nothing as they aren't expired and won't be until next month and again in January.

But, hey, what the fuck ever.

Trimmed Hedge's picture

Mark-to-fantasy, got it.


obelisks's picture

I share your sentiment Boilermaker but how can you trust Put options when

TPTB won't allow this market to fall no matter how bad the news seems to be ?

unwashedmass's picture

ya know....just a thought.....the Fed might let the markets go before the election...just to ensure that Dems' demise is sealed, and the banks get their Republican puppets in place to stop all this nonsense about auditing the Fed and Fort Knox, and stopping the games at the Comex.

I'm not making the assumption that they want things to go smoothly ...... the ONLY reason i see for pumping the market to the moon is to make one last attempt to lure in retail and get rid of all this overpriced crap the banks now have on their books due to ramping ....

i mean, where are the retail saps? aren't they supposed to be getting all lathered up now and storming into the markets?

Boilermaker's picture

I think the FED is interested in protecting the FED and hiding the man-behind-the-curtain forever.  They are beholden to no party, no man, and *certainly* not the citizens of this nation.

unwashedmass's picture


that's exactly what i mean, and complete political disarray and President who is effectively neutered with a furious population is more advantageous to the Fed....

what are the advantages of a market ramped to the moon? other than allowing the institutions to dump their stocks at skyhigh prices on retail? if they can get them back in......Not much.....i guess you might think that some heat would come off Ben, but....probably not as the fake employment numbers and exploding states and municipalities are putting lie to everything he and Geithner say these days.

SheepDog-One's picture

zlet em keep pumping, trying to create hype and panic buying! Its NOT going to work because everyone sees what a bunch of damn crooks they all are! This is DESPERATION, not an economic plan!

Ben Graham Redux's picture

Desperation - that's exactly how it appears to me.  They saw $7.6 billion walk away last week and got scared.  This move has been on extraordinarily low volume and right into the face of a mid-term election.  It reeks of desperation.

SheepDog-One's picture

Agreed. This is not a long term plan, its desperation! I dont believe they even have any idea what theyll do next week, much ess next year. Everyones abandoning their God, the stock markets, and theyre freaking the hell out.

1100-TACTICAL-12's picture

i mean, where are the retail saps? aren't they supposed to be getting all lathered up now and storming into the markets?


Cashin out to pay their mortages or their kids mortage, Or buyin PM,s food, water & the like.

Just a guess...

hedgeless_horseman's picture

Glory be!  What would we do without an elastic currency?

StychoKiller's picture

There is a difference between latex and Silly Putty (TM)!

Ragnarok's picture

We all knew nothing will happen until after elections.  Also, if this takes 2-3 years to play out so be it. I could use the time to become more financially independent, plant multiple banking and electronic flags globally and purchase more of that barbaric relic at a Fed subsidized discount.  It will collapse, just not tomorrow.