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Today's OMO Update
Today, at 11:00am, the Fed was supposed to close an OMO Purchase of 17 Cusips, with maturities ranging from 2026 to 2039. The original auction was Cancelled according to the NY Fed website. The auction was subsequently completed with a 20 minute closing time delay.
Here is the auction indicated as completed at 11:20 am, with the following amounts of CUSIPs purchased, for a total of $2.7 billion in Fed purchases:
Furthermore, in yesterday's OMO, $6.6 billion in Treasuries was purchased. Of this, the biggest CUSIP, purchased to the tune of $4.1 billion, was 912828LB4, which is the Three Year maturing 07/15/12 that was auctioned off on July 7, 2009, and which had $13.4 billion allocated to primary dealers (or 38.5% of the total allocated competitively).
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Looks like the primary dealers have to clear their books for the upcoming auction.
Tyler, if the fed can't get audited (by ways of total corruption) why not go after these primary dealers and dipose them? I think some discovery phone calls and wire transfers might paint a nice picture....
Hmm. Meanwhile, NYSE Says Computer Fault Delays Trading of 39 Stocks, Including Berkshire. http://www.bloomberg.com/apps/news?pid=20601087 but no story yet.
[correcting Bloomberg NYSE story link]
http://www.bloomberg.com/apps/news?sid=aR_SGfEJ33RA
Well this auction is what caused me to take on more short exposure (in risk assets). Looking for macro event risks during a strong tape, makes a strong focus on timing necessary.
One scenario I was looking for was a disruption in the market to create a bump in selling of risk- bumping demand for treasuries. Another scenario was structural problems with the treasury market flaring up during this auction. What I am wrestling with is: is this a tipping point where liquidity and a swing in short term sentiment fail to be enough to keep the rally going. Fundamentally this is my view. But markets can stay irrational longer than................. And the mechanics of the rally actually do make some sense. Its largely a Macro view with built in assumptions that would be the foundation for the more bearish stance (looking for a "double-dip".
You're on to something, anon. Especially the first scenario.
The Fed still has some remaining buying capacity, though.
That was my post above.
Yea. this view has worked since the high of friday, which felt very toppish (especially in some risk FX pairs GBP.JPY AUD.JPY ) But the fact is that the Fed is willing to do whatever it takes (which is the right thing to do) , and this could theoretically spur a major move higher in asset prices. We dont know a lot of what's going on. But I will remain short unless we stick above highs of Fri in SPX.
You know tyler for all the ranting and raving about the US, you seem to be missing the market to be bearish on, namely emerging markets. Sure bond yeilds will rise and that will HY bond prices down which will effect rev/eps etc. resulting in some sort of sell off/revaluation.
the impacts of this are much greater overseas in EM countries and the etf's that correlate them. example, today SP is off ~1%, turkish etf TUR is off ~4%. perhaps you're heading the right way but looking at the wrong part of the picture if you want to maximize gains.
missing? there are about 400 posts in Zero Hedge discussing EM. feel free to peruse the glossary.
I have perused but haven't seen anything of significance that would indicate EM expose to a economic decline would be a full order of magnitude greater than a US decline. I see spots of bearish news but mostly coming at China or England but those aren't EM.
Em shorts are a good strong dollar hedge/play
I would like to see more things oversea's as well because I think the next crisis will be foreign born...
32900...how about setting up your own blog and working on it 20 hours per day and sharing that info for free to us?
thanks!
awesome rebuttal. Bang on.
because you don't need to work on something 20 hours a day to understand what's going on jackass, and if you do perhaps you're overdoing it a touch too much.
How has the last 90*20 hour days of bearish news, failed auctions and mediocre economic news detracted from the SP500?
You can spend 15 minutes a day, tops and be as relevant as someone who spends 20 hours if you allocate your time properly.
so why worry about overseas then?
worry? I'm not worried about overseas, I'm pointing out that as bearish as one can be here, it is significantly more dire in EM.
If you look at the SP retracements it's up ~50% from the bottom, but most EM have retraced ~90-100%. I believe they have priced in significantly more robust recoveries/short busts/risk premiums than developing countries have. Hence, an even modestly dire economic fallout would result in a significant repricing of risk in EM's, most likely by 2 or 3 times the magnitude of a developing nation correction.
I'm surprised that tyler hasn't been on this more. At least in the US significant actions are being taken, but overseas, they're largely riding on the coattails of developing countries.
No it's here, in the U.S. And it is that demand is cratering, much worse than was assumed. Everything now is chasing the decline U.S. demand. It's the plug on the deflationary spiral, and it sinks first and furthest.
This is what happens when you have a supertopheavy police state which pays no attention to the economy on the ground.
As I have said before, study the supply chain. It's bowups here which will have the fastest impact on finance.
Too bad so many documents are still classified, even at the FDR library! Then you would see the obsession in Washington with the supply chain. But you have to be an insider's insider (a Harry Hopkins, a Bobby Kennedy) to know what's going on there.
Obama should have one, and he doesn't. All he has is Axelrod, who is neither close enough to Obama or insider enough, to know what the real issue is.
Poor Obama! As Alice Roosevelt said of Harding, "He was not a bad man. He was just a slob." That's Obama--he's just a slob.
+1
buy EDZ heavy, very heavy
IFN looks u-g-l-y. Look out if it breaks $26.
http://stockcharts.com/h-sc/ui?s=ifn
also buy TZA very heavy
What it does tell you is there is no end demand for this newly issued paper.........it is stuck on the dealers books.
Geeeeeeee............ Austrian Trade Cycle theory states that by suppressing the curve investors move into riskier assets..... If rates alone can't do the job... let's waste money!
If this happens with low volume, what chaos will there be if everyone wants to sell their longs?We just can not compete with the vast amounts of money being used to
influence decisions. The Rich says"
good articles;
href="http://www.iamned.com" target="_blank">my newest bookmarked finance website
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