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80% Of Today's POMO Is Bond Auctioned Off Last Thursday

Tyler Durden's picture


We have repeatedly observed and commented on the painfully hilarious, thanks to Ben "the Fed will not monetize debt" pattern of the Fed monetizing the OTR just auctioned off bond in its daily POMOs so there is little we can add here suffice to say that the one CUSIP accounting for over 80% of today's $3.7 billion POMO targeting the 01/31/2019 - 03/31/2020 range, at precisely $3 billion, was 912828UV0. What is 912828UV0? This is the 7 Year bond that was auctioned off last Thursday, and which saw $13 billion going to Primary Dealers (make that $10 billion now). In other news, the Fed Chairman does not, repeat not, perjure himself under oath. Ever.

Today's POMO (which so far hasn't done much to instill confidence in central planning courtesy of yet another no volume stock market levitation):

And the details of the just auctioned off last Thursday 912828UV0 7 Year:

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Wed, 04/03/2013 - 11:24 | 3403457 firstdivision
firstdivision's picture

the end of the ponzi seems to be accelerating

Wed, 04/03/2013 - 11:28 | 3403479 Winston Churchill
Winston Churchill's picture

The USA is going to need bigger guns.The whole world ,just about, is

now shunning the dollar.

Saudi next.

Wed, 04/03/2013 - 11:41 | 3403541 Dr. Richard Head
Dr. Richard Head's picture

The sad part is that one could share this information with the general American public, which I do quite often, and the glazed over eyes of the American Idle-watcher commence. The system is so deliberately obtuse and confusing that most would not take the time to go down the rabbit hole of asking questions like what is money, what is debt, what is fractional reserve banking or what is a central bank. Even if the answer is given to them it means nothing to their TV-addled minds. Sigh......

Wed, 04/03/2013 - 12:28 | 3403799 ghandi
ghandi's picture


Even MSN is saying to get out of Treasuries:

Bubble bigger than housing:


Wed, 04/03/2013 - 12:51 | 3403935 Bananamerican
Bananamerican's picture

 "...and the glazed over eyes of the American Idle-watcher commence."

to be fair, the POMO updates on ZH are incredibly jargon heavy for Joe-6

Wed, 04/03/2013 - 13:09 | 3404040 Clowns on Acid
Clowns on Acid's picture

What about Joe-12?

Wed, 04/03/2013 - 13:35 | 3404178 Cast Iron Skillet
Cast Iron Skillet's picture

hey! where I'm at, beer comes in 20-bottle cases.

Wed, 04/03/2013 - 13:35 | 3404171 SAT 800
SAT 800's picture

Save yourself.

Wed, 04/03/2013 - 12:54 | 3403952 smlbizman
smlbizman's picture

hey, maybe these guys are really compassionate..............." lets not tell the poor bastards we are going to crash into that mountain"....your right ben, let them enjoy their final days happy"....thats why i always liked you paul"....thanks ben,..ah, ben can i ? sure paul,..... sure.....

Wed, 04/03/2013 - 13:35 | 3404166 SAT 800
SAT 800's picture

All parabolas have to start somewhere. The acceleration is barely detectable now; next year? could be easily detectable; along with the inflation.

Wed, 04/03/2013 - 11:25 | 3403462 Edward Fiatski
Edward Fiatski's picture



Wed, 04/03/2013 - 11:27 | 3403473 Lost Wages
Lost Wages's picture

POOMOO is bullshit.

Wed, 04/03/2013 - 11:28 | 3403480 DeadFred
DeadFred's picture

You didn't expect the primary dealers to hold that trash more than a few days did you?

Wed, 04/03/2013 - 11:43 | 3403546 Dr. Richard Head
Dr. Richard Head's picture

Shit, PDs hold this garbage for negative days now, the way I see it.

Wed, 04/03/2013 - 11:53 | 3403605 oleander garch
oleander garch's picture

One wonders what the skim on the six day holding period would be.  Certainly, the rate of return must be astronomical for such a short time frame.  POMO may well be the best investment idea ever for primary dealers.

Wed, 04/03/2013 - 12:42 | 3403882 Ricky Bobby
Ricky Bobby's picture

Wondering the same thing myself. Why work when you have staff to move 11s and 00s around and credit your account millions. Of course the trick is to have those funds converted into your bonus pool. In addtion the Gov gets to fund all the pork, enrich their  Kronies, hire more bureaucrats, and build a police state. Sweet setup - Whats not to like?

Wed, 04/03/2013 - 14:09 | 3404350 teolawki
teolawki's picture

I wouldn't hold that shit for six seconds, much less six days.

Wed, 04/03/2013 - 11:27 | 3403483 optimator
optimator's picture


Politicians and Banksters never lie or perjure themselves, they simply mis speak.
Wed, 04/03/2013 - 11:30 | 3403496 Wakanda
Wakanda's picture

"...Fed Chairman does not, repeat not, perjure himself under oath. Ever."

4eva FiSHeS.

Wed, 04/03/2013 - 11:32 | 3403503 Glass Seagull
Glass Seagull's picture


PD commission circle jerk.

Wed, 04/03/2013 - 11:33 | 3403507 Urban Redneck
Urban Redneck's picture

So how much free cash money (except to taxpayers) did the bankers pocket in today's round of Flip That Bond for the giant risk they took holding that "risk free" government paper for all of four business days?

Wed, 04/03/2013 - 11:39 | 3403532 eclectic syncretist
eclectic syncretist's picture

I'd like to dedicate this one to all the Central Banker's out there -


Wed, 04/03/2013 - 11:41 | 3403543 earleflorida
earleflorida's picture

i really can't wait for this country to lose it's petro dollar status-- the chinese would, and certainly are in time [perhaps in 2014 capture the hegemonic crown] going to make great overlords,... and we as american's can go back to living in happier times not working for dah`man!

Wed, 04/03/2013 - 11:47 | 3403567 Bingfa
Bingfa's picture

Front running the FED.....

It's all they got.

Wed, 04/03/2013 - 11:52 | 3403596 Al Huxley
Al Huxley's picture

What else do they need?  Risk free money, practically EVERY FUCKING DAY.  And almost nobody gives a shit.  Just keep tellin' us there's no inflation and we're all doin' great, and everything's cool.

Wed, 04/03/2013 - 12:04 | 3403672 Bingfa
Bingfa's picture

The last refuge of a desperate nation...

From a desperate leader

Wed, 04/03/2013 - 13:33 | 3404163 SAT 800
SAT 800's picture

Please; neither the shoe-shine boy nor the Hebe money printer are leaders; they're just puppets.

Wed, 04/03/2013 - 13:32 | 3404156 SAT 800
SAT 800's picture

There;s no inflation until there is; and everything's cool until it isn't. But there really is a long run; as in the banner for this website.

Wed, 04/03/2013 - 11:47 | 3403568 Political_Savage
Political_Savage's picture

Technically, that's a note, not a bond.

When the Fed is out there buying 80% of OTR 30yr bonds - let me know, weeez screwed

Wed, 04/03/2013 - 11:58 | 3403628 syntaxterror
syntaxterror's picture

OK, I give up. What does POMO mean? It's used everywhere on this site.

Wed, 04/03/2013 - 12:15 | 3403729 mortiis
mortiis's picture

Permanent Open Market Operation

Wed, 04/03/2013 - 12:16 | 3403736 mortiis
mortiis's picture

From:  http://www.newyorkfed.org/markets/pomo/display/index.cfm


"The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC)."

Wed, 04/03/2013 - 12:18 | 3403747 Bingfa
Wed, 04/03/2013 - 12:17 | 3403744 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Oh come on, that's like a week ago (sort of) that the bond was auctioned off.  Seasoned paper. Ancient history.

Maybe the FED can start locking in POMO buys in advance, before bonds are even auctioned, through a repo structure ... that would be innovative financial engineering. Lend the PD the money to buy the bond from Treasury, and take the bond not yet issued from Treasury as collateral, and then close the repo by buying the bond once it's out for a day or two.

One f-ing bond, 3bn, auctioned a couple of days ago.

As everyone knows that the charade is what it is, either we have a blowoff parabolic top in markets, or ... we have a blow off parabolic top? Bad Europe and China keep Benny's foot down.

Like driving a hot rod Lincoln.

Wed, 04/03/2013 - 13:39 | 3404192 Cast Iron Skillet
Cast Iron Skillet's picture

... them telephone poles look like a picket fence ...

Wed, 04/03/2013 - 12:21 | 3403759 Confundido
Confundido's picture

It looks like the only volume is in fiat gold sales....

Wed, 04/03/2013 - 12:24 | 3403775 southerncomfort
southerncomfort's picture
Permanent OMOs: Treasury

The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC).



The name Pomo derives from a conflation of the Pomo words [p?o?mo?] and [p?o?ma?].[1] It originally meant "those who live at red earth hole"  ... they're screwin' the world's red earth hole bubby.



Wed, 04/03/2013 - 12:25 | 3403778 100pcDredge
100pcDredge's picture

The Fed is mighty indeed... Just look at their HQ: http://farm3.static.flickr.com/2355/2653046208_38d11e63d3.jpg

Wed, 04/03/2013 - 13:10 | 3404050 Clowns on Acid
Clowns on Acid's picture

As I have said previously....the Fed is going from crazy to immoral.
Rand Paul and his cohorts have to begin bringing this immoral / illegal/ unconstitutional destruction of the underpinnings of the US socio-economic order, to tyhe MSM and indeed the floor of Senate / House.

Wed, 04/03/2013 - 13:30 | 3404148 SAT 800
SAT 800's picture

So yourr thesis is that once they were "moral"; and when was this, exactly?

Wed, 04/03/2013 - 13:27 | 3404100 SAT 800
SAT 800's picture

Short the US Treasury Bond contract on the CME from 145.03; for a few days now. Short the ES, (mini-S&P from 1554 for a week or so); went long Dec. Silver this morning at $27.07; one contract. The margin is up at $10,750 or so. Making money in long Cattle, short Corn. Selling another EUR/USD contract this morning; have been short since 1.31.63; looking for some serious re-adjustment in this puppy. Update; now have two contracts short the EUR/USD with a center position at 1.30065. The worse they fuck it up; the more money I make; basically betting on human sutpidity and greed; and here's the best part; my stop loss is at 1.300. I can't lose anything.

Wed, 04/03/2013 - 13:28 | 3404136 SAT 800
SAT 800's picture

The Silver purchase was motivated by the sharp down-spike in prices, and studying the COT.

Wed, 04/03/2013 - 14:45 | 3404565 Hubbs
Hubbs's picture

Obviously, no one really cares, because in a way, it is a moot point. The FED is buying up all (80%?) the treasury (debt) auctions as it is. What does it matter whether  it is printed yesterday or today?


In the end, when the threshold is reached, i.e the limit of the printed "straw" that "breaks the camel's back", it matters not (except maybe causing the collpase a few days earlier , as indeed we are talking about mere straws on top of the bales and bales of straw already on the poor beast's back.)

Wed, 04/03/2013 - 17:16 | 3405511 EZYJET PILOT
EZYJET PILOT's picture

Are these Primary Dealer scumbags getting much more for these Treasuries than what they paid for them? How is it possible that they buy them off the UST then sell them for a profit at the fed? Is it just a simple case of paying the banks over the odds, or is the profit because the banks borrowed the money off the Fed at 0% to buy the T bills? I guess it's too late in the game to be learning these basics, what with the collapse just around the corner and all...

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