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Tiny $1.3 Billion POMO Done, Enough To Push Market Into Green Territory
It has been a while since Bernanke took matters into his own hands, which is why at 11am the Fed completed a $1.3 billion buyback of 2021 thru 2024 maturities. Ironically that's exactly the time when the market took a leisurely stroll into green territory, and hopefully should make today's auction of $20 billion in 10 Year Notes just a tad more palatable.
Alas, to the Hopium addicted market, the action was barely enough to cause a brief "green" sputter, as it now seems again back on the verge of testing negative territory.
And with $1.3 billion more down, there is just $5.6 billion left - that's barely enough to cause a 5 point move in SPOOs.
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"Ignore that man behind the curtain. I am the great Wizard of OZ."
5.6B fiatcos left.
And 560B fiatcos left in the MBS purchases. Those will be interesting to see this week, my indications are that they haven't slowed down that much.
I can understand how the purchase of Treasuries in the 11 year through 15 year sector might make the 10 year auction more palatable.
How does it turn stocks green?
The theory is that the Fed has a "gentleman's" agreement with the recieving bank to turn around and stick the money straight into the stock market. ie market manipulation, by proxy
Do want to read the latest Medley report on the real dollar story??
Go on www.hedgeyourmind.blogspot.com
can the Fed margin their existing spy shares to buy more?
We really need to read the latest Medley Report on the Real Dollar Story.
Please read www.hedgeyourmind.blogspot.com
Interesting read.
Along this line of thinking, the tire tarrif was a smoke screen to show how the admin is strong and isn't in bed with the Chinese?
Is that market manipulation? I guess as long as the government is doing it it's a green light for their siblings.
Counterfeiting is illegal too, but not if the Fed does it.
Simon Johnson - Obama's Secret Job Plan
Crush the dollar, make exports competitive, we all "win"
http://www.thedailybeast.com/blogs-and-stories/2009-10-06/obamas-secret-...
SJ is a former chief IMF economist; no slouch.
He doesn't say much about manufacturing after his opening lines.
Cheap dollar = more exports would be great if we still had a solid manufacturing base.
What will the US export and to whom?
we could export our housing stock.
1. put existing, vacant mcmansions on trucks.
2. drive to long beach, ca port.
3. rent big ships currently rusting in water off singapore for $2 per day (ok, one buckie if you push hard enough)
4. deliver mcmansion to Zimbabwe and take payment in local currency.
problem solved.
Tyler- So what happens when the 5.6 billion is gone? New stimulus package? Crash? Has it happened before?
I was thinking along the same lines. What would happen if the Fed publicly announced a new round of QE?
Would the equity market cheer the new (publicly acknowledged) liquidity injections and rise some more or would everyone just sort of look at each other and say "rut roh" and run for the hills?
Or none of the above?
God, I always wanted to say "rut roh" in public. :>)