Shorting The Market On These POMO Days May Be Hazardous To Your Health

Tyler Durden's picture

The central planner's policy tool formerly known as "the stock market" has experienced unprecedented levitation in the past two months on the heels of what, as shown previously, is some 38 countries concurrently pursuing negative interest rates and monetizing their debt, while flooding the market with record liquidity. Furthermore, as we said back on January 9, now that the Fed is back to full scale unsterilized market injections in the form of good old POMO, anyone who wishes to challenge the Fed directly may want to reconsider doing so via stocks (buying precious metals on FRBNY, BOE and BIS-facilitated 8:00 am crashes is always encouraged). Recall what we said on January 9: "it may not be a good idea to be short stocks on any of the [POMO] days listed below." Below is a chart of what happened next: it shows the stock market's performance and whether or not there was POMO on that day.

In brief: of the 15 POMO days since January 9, the market was up 13 of them, or an 87% hit rate. Those who did not short January POMO at least did not lose money.

And since Goldman's Bill Dudley was kind enough to release the February POMO schedule, during which the Fed will add another $44 billion to Primary Dealer dry powder, not to mention some $40 billion in MBS, and since there is no stock market and hasn't been since 2008, we urge everyone to stude the POMO table below and to not short the S&P on the highlighted POMO days unless they absolutely must. Of course, regular readers will know that since the summer of 2009 our active advice to everyone but the most habituated gamblers, has been to stay out of the central planner's policy tool formerly known as "the stock market" entirely.

February POMO schedule (via Fed):

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CPL's picture

20 years ago if the media found that out there would be congressional hearings for years.

Mr Lennon Hendrix's picture

Today on "Ask a Lib"

Today, ask a Lib why, if the economy has recovered, Bernanke is buying $85B worth of bonds monthly, see what he/she/it says, and then promtly laugh at them, restraining yourself from any physical violence.

NotApplicable's picture

I'd even advise "the most habituated gamblers" to stay away, as there is little to gain by gambling in a rigged casino.

I understand there are many here who manage OPM for a living with little choice but to play, or seek a new career, so there's little they can do. But everyone else? Well, they're just feeding the Beast.

James_Cole's picture

"Today, ask a Lib why, if the economy has recovered, Bernanke is buying $85B worth of bonds monthly, see what he/she/it says, and then promtly laugh at them, restraining yourself from any physical violence."

As someone who identifies as mostly Lib I got this one. 

Bernanke, who has bipartisan support from US gov officials and somewhere in the range of a 70-80% approval rating from investors polled by Bloomberg, has done a fantastic job of pumping up what has long been a smoke & mirrors economy. The 'real' economy has been in the dumps since the 70s. 

I'm short this market and I don't care if I lose money for the next little while. This thing is going down regardless of Bernanke's money gun. Maybe not today, maybe not tomorrow but someday. 

Any other questions on 'ask a lib?'

francis_sawyer's picture

 "ask a Lib why, if the economy has recovered, Bernanke is buying $85B worth of bonds monthly, see what he/she/it says, and then promtly laugh at them, restraining yourself from any physical violence"


Why stop there [with the HILARITY]?... Proceed to ask them how many 'bitcoins' the notional value of that printing amounts to...

Answer: The ENTIRE planetary notional value of bitcoins every 10 minutes or so...

"Don't HATE ME because I'm beautiful!"


Tagline: "You'll see"...


overmedicatedundersexed's picture

Still holding my short, let’s see what happens in ME and slowing economies across the globe..when I give up, it should be at the top. Such a sick market.

Howdan's picture

Haha I feel your pain.... Keep wanting to short but don't want to get burned.

Hold your position and it will eventually turn profits but you know, sod's law says the second you close out your short, that'll be the top and the market will plunge. Crazy times out there

DoChenRollingBearing's picture

@ James_Cole

Yes, I have a question or two for "Ask a Lib".

"Why do we see a DECLINE of 0.1% in the economy last quarter, yet we hear so little about it?"

"Is RECESSION next?"


Maybe we have entered a long phase of economic stagnation.  I am seeing stagnation almost everywhere (except in equities, maybe, for now, danger!).  Even the price of gold is stagnant.  

Is stagnation contagious?  Can we shake it off?  Can I?


James_Cole's picture

"Why do we see a DECLINE of 0.1% in the economy last quarter, yet we hear so little about it?"

I can't say I know who the "we" in this scenario is, but I read about it constantly. Like, for instance, the front page of todays financial times. 

"Is RECESSION next?"

This question is better suited for a psychic but my guess is yes.

DoChenRollingBearing's picture

Yes, J_C, I saw the first page of the FT as well.  A UK newspaper.

My guess is yes re recession coming next.

Randall Cabot's picture

Does the POMO money jack stocks on the Operation Date or the Settlement Date???

auric1234's picture

Look at today's charts. You'll have the answer.


ACP's picture

I've long ago abandoned the mere notion that I would get a logical, coherent answer from a Lib.

One that, like you mentioned, would not provoke physical violence from myself.

DoChenRollingBearing's picture

+ 1, LH!  Even though the green button no workie...!

max2205's picture

Who's selling to the fed besides bill grossmeout?

sbenard's picture

Who needs an economy! We have PRINTED prosperity now!

bobthehorse's picture

Are there any retail investors left?

I'm too chickenshit to play this market.

A guy needs insider information to survive.

A regular Joe would have a better chance putting it all on red.

Mr Lennon Hendrix's picture

the 15 POMO days since January 9....

Jesus fucking Christ, are they doing it everyday now?!

Al Huxley's picture

That was found to be the best way to prevent those traumatic 'down days' in the 'market' from occurring.

NotApplicable's picture

So, I just noticed that on 2/19 (and throughout the month) they'll be buying up 30 year notes issued on 2/15.

That anyone could defend this with a straight face...

Does Bernanke use botox?

ActionFive's picture

Federal candle on FB today.

EscapeKey's picture

No, Saturday and Sunday are the exceptions.

For now.

NotApplicable's picture

Just wait, eventually it'll be every hour.

Then every minute.

Then every second.

And finally, Nirvana.


Gypsyducks's picture

Every week day in Feb. except for Friday the 15th and Monday the 18th which happens to be President's Day. 

Nid's picture

is it just me, or does this seem criminal?

silver4me's picture

You must be new. No it's not just you, but when you're filthy rich laws do not apply. The laws are just for us peasents.

NotApplicable's picture

Oh, they apply. Just in the opposite direction.

1eyedman's picture

what is criminal is overt depreciation of the currency, "2% target".   if you have savings, it will be worth less, if you earn money working, your labor value has been deemed to decrease in purchasing power.    savings is not allowed, spend it, or hand it over to the primary dealers to take their %, and depending on when you ask for it back, it may  or may not all be there.   now GET TO WORK!

NotApplicable's picture

And to that I can only reply, "Fuck you, Milton Friedman!"

ebworthen's picture

Nid said:  "is it just me, or does this seem criminal?"

No, you are not alone.

Criminal?  Yes.

Stealing from future generations to feed the excesses of mammon lusting oligarchs and kleptocrats while debasing the currency and starving the hard working common folk.

It worked for the despots of Rome, the nobility of Europe, the failed totalitarian regimes of the 20th century - for a time.

thismarketisrigged's picture

i was just watching cnbc and this guy named ron insomna i believe, i wanted to fucking punch him in the face. he was saying how the economy is doing great, europe was recovering nicely, and he said, and i am not making this shit up, ben bernanke is the best thing to ever happen.


fuck this guy

Tsar Pointless's picture

CNBC. That channel is still on?

And you're watching it? And admitting to it?

That makes you worse than them.

SemperFord's picture

Got that right LH, NBC = Nothing But Comedy

thismarketisrigged's picture

@tsar pointless, i need to laugh during the day, and what better channel to make you laugh at 3 pm cnbc

Mr Lennon Hendrix's picture

Every money manager is saying it and they will keep saying it until they get their asses handed to them on a silver platter.

Al Huxley's picture

...and then he hopped on his flying unicorn and flew back to his magic castle in the sky.  Well, the propagandists have known no shame for some time now, so it's not surprising.


Wait, wait, I'm starting to sound like a member of the lunatic fringe.  I take it back, if somebody wearing a suit says it on a reputable network like CNBC then it must be true.  Fuck, and here I was a ready to believe my lying eyes.

kliguy38's picture

Ron Insana was relegated to the scrap heap of hedge funds in 08 when he tried to go into the banker bizness after being at CNBS for 14 years as a commentator and anchor.......he had his head handed to him when he challenged on air the "derivatives market" and was one of the first commentators to do so on MSM news.......he was crushed in the collapse and had a lobotomy after water torture. He learned his lesson and now he talks the talk.

rhinoblitzing's picture

Ron's a FNN - CNBC Veteran that I beleive moved into wealth mgmt after the tech bubble blew up. His economy and all those financial anchors ecionomy is beyond fine, just like members of CONgress.

ebworthen's picture

Ron Insana?


He was a CNBC commentator until he left to start his own hedge fund.

Failed miserably, so now he is back to pumping the markets and lying.

Insana still has mother's milk on his lip and regular duties at Lloyd Blankfein's place to buff his shoes and wax his ass.

SafelyGraze's picture

Dear Fed,

It would be most helpful if you would indicate, in addition to the dates and amounts of POMO, the actual stocks or indexes that you prefer the primary dealers to purchase.

Thanks in advance,

Al Huxley's picture

Dear Mainstreet,

Perhaps you missed the memo - we're out to enrich ourselves at your expense.  That doesn't work if we let you in on the secrets.




SafelyGraze's picture

Dear WS -

Your candor inspires a great deal of confidence.

Here is my entire life savings. Would you be willing to put it under your management? That would be great.


Catflappo's picture

Funny, when I used to trade bonds (or anything for that matter), I'd be highly pissed off if anyone explicitly front-ran me.

The Fed, however, don't seem quite so concerned about keeping their trading plans particularly secret.....

EscapeKey's picture

Oh don't be so worried. Every investment bank have chinese walls to stop anything untoward from happening.

And if that fails, the SEC stand ready to take charge.