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Fed Releases Tapered February POMO Schedule: One Double POMO, Three Non-POMO Days Await

Tyler Durden's picture




 

It used to be conventional wisdom that shorting on POMO days is a sure way to drain one's P&L in no time. However, since the arrival of tapering, this has changed, and no longer is the surgeon general advising against shorting on POMO days especially if concurrent with an implosion in this emerging market or that.

Moments ago the Fed released its February POMO schedule, where we find, that as expected, the Fed will now monetize "only" $35 billion in duration paper, down from $40 billion in January and the $45 billion monthly in all of 2013. Of note: there will be a POMO on Monday, and a double POMO - the only one in February - on February 5. There will be no POMOs on February 11, on February 13, and February 17 - the most non-POMO days in a month since the launch of QEternity. All the other days: just keep an eye on the USDJPY, especially if the epic support barrier at 102 is finally breached. In that case, it's is every colocalized vacuum tube and HFT algo for itself.

 

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Fri, 01/31/2014 - 16:12 | 4389112 101 years and c...
101 years and counting's picture

3 whole days of not printing money?  WTF is this world coming to?  I think they're just (qu)easing the fat cow into her role as money printer in chief. 

Fri, 01/31/2014 - 16:20 | 4389141 Say What Again
Say What Again's picture

After throwing out everything I had learned through the years about trading, and adapting a new set of rules for trading in a world of QE, they go and change the rules again.  Now I have to devise a new set of trading algorithms.  Keeps me busy

Fri, 01/31/2014 - 16:25 | 4389153 YBNguy
YBNguy's picture

They are just refiling the ink.

Fri, 01/31/2014 - 16:53 | 4389247 Xibalba
Xibalba's picture

GC will fall, nothing else.  

Fri, 01/31/2014 - 16:33 | 4389196 GolfHatesMe
GolfHatesMe's picture

No worries Jules, Like she can stay at 65B/month.  We will be back to current/former/higher levels real soon

Fri, 01/31/2014 - 16:39 | 4389206 Say What Again
Say What Again's picture

Marsellus Wallace approves

Fri, 01/31/2014 - 16:14 | 4389116 LawsofPhysics
LawsofPhysics's picture

So in reality, there actually hasn't been any tapering yet?  Awesome.

Fri, 01/31/2014 - 16:21 | 4389145 alangreedspank
alangreedspank's picture

They bought 40 in Jan, down from 45 previously. So I guess the Jan taper was -5 in treasuries and -5 in morgue backed security.

http://www.newyorkfed.org/markets/tot_operation_schedule_140131.html

Fri, 01/31/2014 - 16:44 | 4389230 Say What Again
Say What Again's picture

Look up articles on RePo, on ZH and elsewhere, and you can see that tapering is a matter of interpretation.

Fri, 01/31/2014 - 18:17 | 4389516 LawsofPhysics
LawsofPhysics's picture

Exactly, I see about 90 billion in Fed/PD firepower.  Look at reverse repos...

http://www.newyorkfed.org/markets/omo/dmm/temp.cfm

damn.

Fri, 01/31/2014 - 16:17 | 4389122 syntaxterror
syntaxterror's picture

Nope, treasury yields aren't going up once this bullshit ceases. Nope, JPM told me so (#AskJPM).

Fri, 01/31/2014 - 18:01 | 4389530 El Vaquero
El Vaquero's picture

Actually, were I to play in the markets, I would be long bonds right now.  As equities decline, there is going to be a stampede into "safety."  What I expect after that stampede subsides is for the CFPB to start herding retirement accounts into MyRAs or whatever instrument the government decides to use as a retirement account theft instrument.  But I'm not going to play in the markets. 

 

What we have been and still are witnessing is probably the greatest fleecing in the history of mankind.

Fri, 01/31/2014 - 19:52 | 4389932 syntaxterror
syntaxterror's picture

The problem is: there's nothing safe about a 0.76% bond.

Fri, 01/31/2014 - 16:17 | 4389124 kliguy38
kliguy38's picture

This is bullshit.....i thot we got tapering and could go short the market.......now back to CMG and AMZN buying i guess.......:-(

Fri, 01/31/2014 - 16:17 | 4389126 thismarketisrigged
thismarketisrigged's picture

wow, they must be preparing to rigg the jobs report next friday to all time highs, because a very light pomo is scheduled for then,

Fri, 01/31/2014 - 16:21 | 4389148 Ham-bone
Ham-bone's picture

so much to consider...free money and where it may go...

Oct 12, 12 - German Audit court sez audits of gold advisable (but court only in advisory role to Bundesbank...cannot enforce this)...Bundesbank sez no need...and CNBC runs following article.

"The Bundesbank is, of course, quite right in its opinion of the value of the examinations. In reality, it does not matter one bit whether the Federal Reserve Bank of New York actually has the German central bank's gold or whether the gold is pure. As long as the Fed says it is there, it is as good as there for all practical purposes to which it might be put. It can be sold, leased out, used as collateral, employed to extinguish liabilities and counted as bank capital just the same whether it exists or not.

The actual presence of the gold wouldn't make a lick of difference unless, say, Germany's central bank decided it wanted to start using the gold for some practical, non-monetary purpose like making watches."

http://www.cnbc.com/id/49540593

Oct 24, 12 - Buba requests 50 tons sent annually to Germany for 3 yrs for inspection plus "in negotiations" for full auditing rights

Apparently, negotiations go nowhere...Fed explained that "in the interests of security and of the control process" no "viewings" are possible.

Nov 3, 12 - Buba says fears over gold stored in Fed are "irrational", "no doubts concerning credibility of the Fed".

Nov 18, 12 - Gold trading @ $1752, COMEX has 3.4 million oz deliverable

Dec, 12 - Abe takes office in Japan, begins Yen depreciation

Jan 1, 13 - GLD inventory @ 1350 tons

Jan 16, 13 - Buba states gold redeploy, 300 tons from NY, 374 tons from Paris...both by 2020

April 1, 13 - Gold trading @ $1581 and COMEX has 3 million oz deliverable

May, 13 - Indian Gold imports hit record 162 tons for month of May...China imports 225 tons for May...Western mints / bullion near/@ record demand...Far in excess of global mining supply 240 tons/mo

June, 13 - India adds 8% duty to imports and restrictions...plans to undercut 2012 import total of 845 tons

August, 13 - India applies bans and restrictions on gold imports...imports cut to under 30 tons...India's good buddy Pakistan bans gold imports to curb smuggling to India

Dec 31, 13 - Japanese Yen/dollar depreciated from 80 to 107...near a 40% depreciation...Yen carry trade is 1:1 inverse of gold price

Dec, 13 - US scrap (all non-mining output) exports collapse from 880 tons in '08 to below 200 tons in '13...Global scrap supply declines from 1775 tons to 1300...global mining supply increases by @ 10 tons/mo (120 tons/yoy from 2750-->2870 tons/yr)

Jan 1, 14 - China takes delivery through SGE of roughly 80% of all annual mining supply (up from less than half in '12 and significantly lower in previous yrs).

Jan, 14 - Equties trading all-time highs (up nearly 200% from '09 lows), Bonds @ depressionary lows

Jan, 14 - Fed begins $10 B taper...further $10 B taper announced

Jan, 14 - Fed announces it returned 5 tons of gold to Germany in first of 7yrs...China took delivery through SGE of minimum 2160 tons/yr

Jan 31, 14 - Gold trading @ $1240 (-$500 decline or roughly 30%) and COMEX has 375 k oz deliverable (roughly a 90% decline in deliverable)

Jan 31, 14 - GLD inventory @ 792 tons (roughly 40% drawdown)

Feb, 14 - COMEX likely greater delivery's requested for Feb than current Deliverable gold quantity

Feb, 14 - India considering repealing ban on gold imports as of March, political considerations around rampant inflation absent a hedge is not good politics

2015 - Gold mining output predicted to begin declining due to lowered capex, exploration, continuing cost of production below all-in-costs of mining

AND GOLD IS UNIVERSALLY EXPECTED TO CONTINUE DECLINING IN PRICE ON WEAK DEMAND

Fri, 01/31/2014 - 16:22 | 4389149 I Am Not a Copp...
I Am Not a Copper Top's picture

Shit - the "Market" is going back down.  SAVE US KEVIN!!!!!!!!!

Fri, 01/31/2014 - 16:26 | 4389162 The Fonz
The Fonz's picture

Looking at this makes me think that the market will get a bit of cash in the first few days and slide by varying degrees until options pin. Looks like the SP500 is downward bound till mon the 15th. I'd say below 1770 for certain, but will it stop at 1750 and range trade or not? After that probably down to someplace between 1725 if calm and contolled and 1690 on an impluse. Wow. They are going to break 1/2 of the higher high lower low trend. I can't help but be doubtful that they would let the lower low happen as well. That 200 day MA is going to hold this month I should think.

Fri, 01/31/2014 - 16:26 | 4389164 carbonmutant
carbonmutant's picture

A day without POMO is like a day without sunshine...lol

Fri, 01/31/2014 - 17:40 | 4389443 Deacon Frost
Deacon Frost's picture

But, don't worry, plenty more POMO (or a variation of) to come.

Fri, 01/31/2014 - 16:28 | 4389166 Yen Cross
Yen Cross's picture

   Look at how the size of reverse REPOs has grown. Over $100 billion today.

  http://www.newyorkfed.org/markets/omo/dmm/temp.cfm

Fri, 01/31/2014 - 16:49 | 4389240 Winston Churchill
Winston Churchill's picture

This is what is truly scary. Not EM per se.

How much 'good' colateral does the FedRes have left to loan out.

The SBS is obviously bailing on all colateral outside of UST's.

Exactly what happened in 2008 ,but before r/r s were brought in.

with a load of other emergency schemes.

Got gold ?

Fri, 01/31/2014 - 16:28 | 4389171 pragmatic hobo
pragmatic hobo's picture

anyone who believe the emerging market turmoil is due to fed tapering, as being reported by the media, have another thing coming.

Fri, 01/31/2014 - 16:30 | 4389172 Kaiser Sousa
Kaiser Sousa's picture

why in the fuck would anybody believe anything these sociopath fucking Bankers say?????

they aint gonna taper shit, they gonna continue the counterfeiting, and we'll never no truly how much, until the debt coupon dollar is ENTIRELY worthless...

shit, mother fuckers tell u to kiss they ass when u ask them where the dollars went, who got them, and how much...

then say fuck off when the word AUDIT is uttered...

bottom line, keep stacking...

 

Fri, 01/31/2014 - 17:02 | 4389277 Billy Sol Estes
Billy Sol Estes's picture

So if I destroy all of my counterfeited money can I declare that a tax loss too?  

If you have a phony $100 that is confiscated, you will lose the value of the money but can declare a tax loss at the end of the year, officials said.

 

 

Fri, 01/31/2014 - 16:33 | 4389188 RaceToTheBottom
RaceToTheBottom's picture

I guess that was a request from WS to know which way to bet....

This is a fucking zoo

The only thing the FED fears more than Gold is the Free Market

Fri, 01/31/2014 - 16:41 | 4389218 Aknownymouse
Aknownymouse's picture

only 2 days of no POMO. Feb 17 is a day off I think

Fri, 01/31/2014 - 16:56 | 4389241 DIgnified
DIgnified's picture

USDJPY is 102..3 currently.  Kinda new at this.  Whats supposed to happen now?  Ive learned more from you guys than anything else.  Hoping someone can help me out here. 

Fri, 01/31/2014 - 17:14 | 4389328 The Fonz
The Fonz's picture

Lots to learn, look up carry trade, Balance of Payments, current account, capitol account. Those are the basic conceptual tools you need. I havn't been watching internationally very closely and most of us learn to understand our own market first so this can be a little confusing.  The most important fact is that Japan devalued it's currency very aggressively. Now it is valuing back up for reasons I don't entirely understand.  Don't be abashed I have read this site every day for 3 years and some of Tylers stuff still goes over my head. On the bright side I have become a profitable trader and learned nearly everything I know from ZeroHedge. You'll know your getting he hang of it when you can begin to frame your disagrements with the Tylers intelligently for the purpose of understanding market movements.

Fri, 01/31/2014 - 18:07 | 4389542 DIgnified
DIgnified's picture

Word. Thank yo uvery much.  This is exactly what I was hoping for. 

Fri, 01/31/2014 - 19:04 | 4389774 TheLooza
TheLooza's picture

Since starting to read ZH I have lost my ass in the casino market (granted not ina  straight line), but then again, Tyler never told me I should be shorting per se. That shits on me for going mega bear when I needed to be mega bull.

Fri, 01/31/2014 - 23:45 | 4390516 The Fonz
The Fonz's picture

Just remember whats on the line, if you can learn to trade you can end your money problems for life. I personally have nothing to show for working so why not? Money mgmnt states clearly that using more than a tiny part of your portfolio in risky trades results in a near certainty of losses. What this policy does not cover is the fact that most workers have nothing to lose. If I get wiped out I just put 1 more months disposable income in. There is also the possiblity of getting a streak of wins. If I can do that (and I am getting to the point where I can) I can get to the point where money mgnt can actually be used.  You don't have to double 2G very many times to change your life permanently.  Good luck!

Fri, 01/31/2014 - 17:30 | 4389391 q99x2
q99x2's picture

Got a pair of yellen pomos showin. I'll raise your Bernanke bi one Hillary and a Krugman.

Sat, 02/01/2014 - 14:40 | 4391538 Charles Wilson
Charles Wilson's picture

"The House wins... 

Give us all of your money.

Thanks for playin'.  Better luck next time..."

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