Guess Who Was The Biggest Beneficiary From The Fed's POMO Bonanza

Tyler Durden's picture

There was a time before the Fed announced it would commence sterilizing its Large Scale Asset Purchases when every day in which there was a Permanent Open Market Operation, or POMO (remember those?) was a gift from Bernanke, virtually assuring the market would ramp higher. This phenomenon had been documented extensively in Zero Hedge and elsewhere (a comprehensive analysis can be found in "POMO and Market Intervention: A Primer"). The pronounced market effect of POMO was diminished somewhat once the Fed sterilized the daily flow injection by selling short-term bonds to Primary Dealers, even though the Fed continues to buy $45 billion in long-term bonds to this day, effectively mopping up all 10 Year+ gross Treasury issuance, and keeping the stock of long bonds in the private market flat at ~$650 billion as we observed before. All of this is well known. What was not known is who were the Fed's POMO counterparties. Now we know. Yesterday, the Fed for the first time ever released Transaction level data for all of its Open Market Operations, in a time window starting with the passage of Dodd Frank on July 21, 2010 and through the end of the quarter. The Fed will now proceed to release quarterly POMO detail with a two year delay as part of its transparency objective.

The new data focuses on discount window transactions (completely irrelevant now that there are $1.7 trillion in excess reserves and the last thing banks need is overnight emergency lending from the Fed when there is already a liquidity tsunami floating, yet this is precisely what the WSJ focused on), on FX operations, and, our favorite, Open Market Operations, chief among them POMOs. What today's release reveals is that once again a conspiracy theory becomes fact, because we now know just which infamous bank was by fat the biggest monopolist of POMO operations in a period in which banks reported quarter after quarter of zero trading day losses. We leave it up to readers to discover just which bank we are referring to.

Total POMO notional in period July 21, 2010 - September 30, 2010 by bank.

And by number of transactions. Nuf said.

So the next time someone asks you how a firm can have just 2 trading days of minimal losses in a quarter...

... and 7 days of $100+ million trading day profits, such as in this case Goldman Sachs (source: Sept 30, 2010 10-Q), now you know.

Source: The Federal Reserve bank run by former Goldmanite William Dudley

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GetZeeGold's picture



Look shocked!

markmotive's picture

The Dolce and Gabbana of the banking world, as one airhead put it.

Marc Faber dispels the stimulus illusion...


flacon's picture

It's disgusting... really. We are all being raped by banks and central banks. It's time for us to abandon THEIR paper debt notes and let them rot in their own hell that they created and intended for us. 

FEDbuster's picture

Just doing "God's work".

sunaJ's picture

It's like the Special Olympics, where you get a trophy no matter how shitty you perform. There aren't any losers. Well done, Corky er, Goldman.

francis_sawyer's picture

Heebie Jeebies bitchez...

AldousHuxley's picture

FSA (UK's SEC) chief admitted society has "lost confidence in banks, in finance and the whole system".



"Bringing Libor under an independent regulator will take away the notion that this was a system run by banks for the benefit of banks,"

FSA plan includes oversight by a new panel from 2013. Until now, Libor rates have been set daily by the British Bankers Association (BBA)


UK seem to be making reforms.....where's any of this for wall st?

“It’s just amazing how Libor fixing can make you that much money or lose if opposite,” Tan said on an Aug. 19, 2007, conversation with traders at other banks, including Deutsche Bank’s Mark Wong. “It’s a cartel now in London.”


Antifaschistische's picture know, I was willing to give the Jewish people Florida and abandon Israel.   But Goldman gets enough of OUR money to BUY their own country...OR, do they already own US!    Forget it...they can't have Florida now.   Just Key West or Catalina...but not both, they have to chose...then, no more freaking subsidizing of the Israeli machine.    

US companies have to deal with freaking affirmative action, let's start with the Fed....we need to start hiring Mormons, Muslims, Buddist (sorry for the spelling I do not mean to offend anyone) and Christians at the Fed.

Acet's picture

UK's banking reforms on LIBOR will be just like their last set of banking reforms to reduce the Too Big To Fail factor by separating investment banking from retail banking:

- The changes have been pushed till 10 years in the future in the hope that the economy picks up enough until then that they can be quietly shelved and they're already started so diluted that even if and when imposed without being further diluted (and judging from past record it's highly unlikelly that changes that negativelly affect well-connect people will not be rendered ineffective) they won't actually do any good.


asteroids's picture

What if one of the European banks on that list goes tits up. What would the FED do?

Mine Is Bigger's picture

No losers?  They say if you look around the poker table and can't tell who the sucker is, it's you.

CheapBastard's picture

Be a Cheap bastard.


Just walk away.

KickIce's picture

It's going to be tough with the military, government unions and SNAP cards.  Still a whole lot of people watching ESPN or Snookie while texting on their iPhones completely content with the current system.

Just look at the amount of outrage against the replacement refs versus the Patriot Act or the passing of the NDAA.  Those in power are laughing.

LetThemEatRand's picture

I think you can expand your "it's going to be tough" list to everyone who plans to vote for Obama or Romney. And ironically, the poor probably have a better understanding and dislike of government oppression than most middle class white guys in Iowa who consider themselves red, white and blue through and through.  Most of the people I know who still think the Patriot Act and TSA and homeland security etc are a good idea are middle class to wealthy and think unions are to blame for the loss of jobs as opposed to free trade with slave ship countries.

KickIce's picture

I agree with the poor, but the problem with them is they expect government to be the solution to their problems.  They just haven't figured out for every little tidbit thrown their way, the banks/corprations get ten to rape them further.

SeattleBruce's picture

We need a mass, centrist populist movement that becomes a political force (party if you wish), that can simultaneously educate 90% of 'we the people' and allow them to contend for power for the first time in generations...

quartshort's picture

So it can be co-op'd by one of the wings? I was all all aboard the tea party movement when it had REAL ideals in the VERY begining. I sent a tea bag to WA DC with my return address so they knew exactly who they were dealing with... I bet I am on every "bad guy" list going. I was hyped to have a chance to really change the system. I was ready to join local groups, put out digital content online for those interested and motivated... I was more than happy to donate time and $$$ to a worthy cause.

Foolish, eh?

That movement was taken over instantly when it started getting wheels and now it is a joke at best. Same with OWS.

Truth is the pain is not bad enough for a real movement to commence with power and demands. To get the other parties to change their policy before they go extinct- yeah, riiiight. We will get exactly the President "we" so richly deserve.

LetThemEatRand's picture

It's the rich white guys who tell us we need more prisons, more airport security (moving soon to a mall, train station, etc near you), more Patriot Act, more military, etc.  The last time I checked, most of my taxes and all of my civil liberty erosion stemmed from the policies of the rich, not the poor.  You may not like paying taxes to support the mythical welfare queen, but I'll bet you that FAR more of your tax dollars are in the pocket of Goldman Sachs and Haliburton etc than all the poor combined.

StychoKiller's picture

Either way, the PRINCIPLE is the same, so WHY do you support the one and expect the other to go away?

Check yer premises.

SeattleBruce's picture

Like it or not, the Tea Party (which arose in the right/center) and Occupy Wall Street (which arose on the left/center) have too many of the same common goals (accountability and return of 'we the people') to continue to battle across the left/right, blue/red false dichotomy set up by TPTB to keep us divided and conquered.

KickIce's picture

I think the tea party members, once in office, were given the cold hard facts; any austerity would crash the system and they would get the blame.  We keep increasing government to try and offset unemployment rather than investing in the private sector.  It's like a bankrupt company increasing overhead costs rather than ramping production to get out of debt.

StychoKiller's picture

That STILL does NOT justify the Tea Party's support of the PATRIOT act or the NDAA...

Kayman's picture

Just watch the Fed's balance sheet. As they suck up all the shit from the self-appointed TBTF they are killing themselves.  The power to print presumes a functioning economy.

Government deficits and trade deficits of a size that beggars the imagination. Kicking the can down the road presumes there is more road.

You can only lose at 3-card Monty if they can suck you into the game.

Shrink your personal footprint and help them die. 

CH1's picture

It's time for us to abandon THEIR paper debt notes and let them rot in their own hell

Silver! Bitcoin! Barter! (Bitchez!)

babkjl's picture

Obligatory plug for Bitcoins here.  Works just like online banking without granting money or power to banks or politicians.  I like gold and silver coins but they are difficult to make change for.

CH1's picture

I love Bitcoin, but I don't think change is terribly hard to make with junk silver and nickels.

My recommendation is to use them both! (And whatever else works.)

AldousHuxley's picture

Marc Faber...


"we know one thing for sure the that today's wealth inequality and the income inequality between the one-percent welll

todo people and that ninety nine percent that are less far larger than twenty or thirty years ago" ... and very clearly money printing historically benefitted a few at the expense of many" "Today it is a political decision" "If you can look at history, the most powerful people usually in the end killed, hanged or cruxified. And the central bankers today are the most powerful people. So you can imagine what i'm thinking about the central banks and what their leading employees will eventually happen to and that's the very optimistic predictions" gotta love him. optimistic because he sees that eventually bankers will get punished and world will get her justice.
slaughterer's picture

The conundrum is twofold:

1.) why is GS laying off partners left and right?

2.) why isn't their stock price above $200?


centerline's picture

Economic warfare.  GS is the new superpower.  Got to keep feeding ammo.

My concern though is... who is the enemy?

JPM Hater001's picture

Something keeps nagging at me like the French Revolution

Bananamerican's picture


I'm working on a new album of folk-rock stuff.
here's one of the new ones......

like september laying down
her long dress sweeps the ground
as the common people stand and pray
for the Lord her soul to keep.
  at the Coronation Fair
all the pretty things prepare
  while the digging skeletons tend
to their hidden work and weep.

  sounding clear across the water like a bell
as the mummers raise the pyre upon the square
hear the song of celebration in the air
on the last day of the Coronation Fair.


At the Coronation Fair

revolution in the air

with the beggars and the poor

lined along the watching way
  did you see my lady fair
as she stepped into the chair
and the flames of the bonfire shifted in her eyes of gray.

  sounding clear across the water like a bell
or like voices rising from the bottom of a wishing well
see the ashes on the pavement where she fell
on the last day of the coronation fair.

    in the courtyard of the moon
an old man holds a broom
walking slowly backward sweeping every step away

  are we navigating blind?
will heaven send a sign?
moving farther out to sea
where the stars have always shined


Aziz's picture

Goldman, bitchez.

RacerX's picture

Like that turd that just won't sink; Goldman rises to the top again.

ghengis86's picture

In Goldman we Trust!



ghengis86's picture

Forgot to add....Fuck you Bernanke! 

Fuck you, fuck you, fuck you, you're cool (points to Ron Paul), fuck you, I'm out

Martin Silenus's picture

I will not buy this POMO, it is scratched.

kaiten's picture

GOLD(man) is ruling the world.

Urban Redneck's picture

The fiat facade perhaps, but they prettyboys are still afraid to get their precious white shoes dirty...

Rainman's picture

Now retired Brian Sack was quite the rainmaker for the gluttonous Squid. He'll become part of their hierarchy post- November 6 

Wakanda's picture

Note to Lloyd:

The Second American Revolution, happening now in a neighborhood near you.

BidnessMan's picture

Got to be sure there is plenty of money for million dollars bonuses for all the hard working smarter than God banksters. Pfffftt.... I fart in your general direction. Thieving thugs in nice suits. Obvious where the Bernanke's multi-million dollar landing pad will be when his term expires in January 2014.

Peter Pan's picture

You want to throw up because being surprised is just not possible.

This is the equivalent of running a food stamp program for just one organisation.

Is there no shame, no limits, no decency and no light at the end of this sewer?

Goodnight America goodnight.

TrustWho's picture

Robbing the rich poor to pay the poor rich. As we have food inflation, and soon allout commodity inflation, the poor will get hammered. But there will be payback as falling real disposable income with cut demand, margins and corporate profits.

The only inflation Daddy Bernanke will crush is wage inflation. Daddy bernanke loves the Middle Ages with the lords and peasants feudalism and he is determined to re-create while Obama tells the peasants he loves them...sick, sick, sick....