Xtranormal Cartoon Explains POMO

Tyler Durden's picture

It was only a matter of time before someone finally explained it for the masses.

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doomandbloom's picture

I think your video was better....master!:P

Miss America's picture

Can someone please please please do me a favor???

Can somebody calculate what the 2 scenarios of buybacks look like for a $6billion sample of 2 differing cusips? 

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

Hulk's picture

Show us your tits first...

Miss America's picture

I'll show you my tits once you show me you understand this.  Ya see, I get POMO conceptually.  ...and I think everone, thanks to blogs cartoons and other forms of education "get it"...  

...but who actually gets the different cusips that Zero Hedge has been harping on?  (I get the fact that the Fed should actually pull the worst performing bond off the market, but then that would be the Fed absolutely tipping their hand.  If they just pulled the worst 10 performers, market participants would actually demand them more, thus jacking up an already poor price to have to pay for them.  I suspect, volume/action on bonds might acyually be what drives things?  Cusip # 912828pc8 has been for the last 2 weeks the hottest treasury bond I've ever seen.  It's every other trade, it every other piece of collateral.  If they pulled that right now, there would be SOOOOOOOO many other thins that had to be unwound!)


So with that said, why does Zero Hedge keep harping on the specific cusips?  Can I please see just how much of a gain we're talking about over other cusips???


All the best,


bonddude's picture

except that room could use some flowers.

hedgeless_horseman's picture

-So the Bernank must print money faster and faster just to stand still?



Awesome.  Plan accordingly.

Also, that gray chick is hot.  What an actress.  She has that special something where she would probably look really good in black, or even white, too.  Are there other pictures of her available on the internet?

i.knoknot's picture

couldn't find her on fecebook. hmmm.

still trying to place that sultry accent...

FEDbuster's picture

A camel toe would be a nice touch.

DarkMath's picture

Argentina with a mix of Weimar Hoch Deutche.

Hephasteus's picture

It's the chopsticks hair bun. Makes you want to search her for the nutrition lable.

101 years and counting's picture

about time.  ZH's explanations have been too complex for me to understand.


NoLongerABagHolder's picture

.... So the Treasury would seek special permission to purchase the debt on the open market; often the debt would be selling above par which meant that the Treasury had to buy it at a premium. For example in 1850, Secretary of the Treasury James Guthrie asked Congress for permission to buy government bonds on the open market to put some of these funds back into circulation; permission was granted and he paid as much as a 21 percent premium to help avert a banking panic (Stabile and Cantor 1991)


So 160 years later we are doing the same thing - quit worrying that it will somehow cause the collapse of our country.....

Cognitive Dissonance's picture

While the cartoon touched on the Bernanke isn't "printing money" issue, I wish it had just come out and said that Bernanke doesn't physically "print" money, but instead just creates electronic ones and zeros.

SheepDog-One's picture

And 'BTFD', although these days the dip buyers must all have balls of steel, hockey helmets, and a bottomless Xanax scrip.

Weaseldog's picture

Do you still find people that don't know the difference?

Cognitive Dissonance's picture

I still find people that don't know......period.

KickIce's picture

But they are printing money as they still need to meet payrolls, finance wars and pay for unfunded liabilities.

Weaseldog's picture

Bingo. Dollars in paper or binary digits is still money.

KickIce's picture

They are actually printing money.  We 110 billion in misprinted $100s a short time ago.  Good Lord only know how much there is in circulation.

Gaston's picture

Very nice, Ty for that.

Amish Hacker's picture

Those who are about to die salute you.

RowdyRoddyPiper's picture

Where is our Sir Galahad to slay this evil dragon?

Prof Gulliver's picture

The masses only likes the bears.

small watcher's picture

Sometimes, the masses likes the green bay.

Boxed Merlot's picture

Maybe so, but wouldn't it be entertaining to see Urlacher go head to head against Mostly Fraud and Rahm's trash talkin in the big game. He's been there over a year hasn't he? How about getting a few 300# union thugs to carry banners for him and march down to the court house?

Tyler: If you could fight anyone, who would you fight?
Narrator: I'd fight my boss, probably.
Tyler: Really?
Narrator: Yeah, why? Who would you fight?
Tyler: I'd fight my dad...

DaddyO's picture


She should have let her her down and taken off her glasses, the effect would have been a bright spot in the bad news she was delivering. She could definitely star in xtranormal porn, yes?


Arthur Two Sheds Jackson's picture

Of course.

You never know what these characters are capable of.



MonsterZero's picture

Ehhh leaving out interactions between the Fed and the Treasury kind of kills it for me.  Could have been better, as their last few videos could have been.  Riding the wave out to sea I guess.

johny2's picture

Have a nice daay :)

bankonzhongguo's picture

So simple, even an American may understand it.

Then again...

dick cheneys ghost's picture

its because the banks are insolvent not because they are to big. kill the banks now and we can heal..................


Arius's picture

how about both - too big and insolvent...a much bigger mess

hambone's picture

I prefer my bad news from cuddly, fuzzy, colorful creatures.

willien1derland's picture

+1,000 Hambone - The 'Bernack' Care Bear dressed like a Pimp - WB - you could knock this cartoon out of the park - Thanks Tyler Great Post

Cocomaan's picture

What does she mean when she says that everything needs to keep growing?

hambone's picture

Ponzi's require exponential growth to be maintained.

Cocomaan's picture

Thanks. A much more elegant explanation.

the grateful unemployed's picture

thats a veiled reference to the thing in his pants. for econ porno there is way too much plot and not enough skin (well avatar skin anyway)

buzzsaw99's picture

Best video evah!!

SheepDog-One's picture

The 'financial system' is now far bigger and more dangerous than the old military/industrial complex...it simply exists to perpetuate itself ever larger, and it doesnt matter how many millions need to starve as long as the Beast grows.

hambone's picture

3...2...1...waiting for final blast off to end the day in green so the teleprompter-in-chief can claim investors and consumers have regained confidence w/out an asterik.

Wait for it...should be vertical.

plocequ1's picture

10-4 Good buddy. Operation POMO success. Over and out