You're now on the archive server. Commenting has been disabled.
Fed Extends Twist Through End Of 2012, Prepared To Take Further Action, Market Unhappy
As always, Goldman Corzined anyone who listened to its call that an epic QE is coming. Fed did the worst possible outcome for risk- merely extended Twist, just as the credit market predicted it would 3 weeks ago:
- FED SAYS IT IS PREPARED TO TAKE FURTHER ACTION `AS APPROPRIATE
- FED TWIST EXTENSION TO SWAP $267 BLN OF TREASURIES BY END 2012
- FED TO SELL OR REDEEM `EQUAL AMOUNT' DEBT DUE 3 YEARS OR LESS
- FED TO BUY TREASURIES DUE IN 6 TO 30 YEARS AT `CURRENT PACE'
- FED SAYS EMPLOYMENT GROWTH `HAS SLOWED'
- FED SAYS INFLATION HAS DECLINED, REFLECTING OIL
- FED REITERATES ECONOMY `EXPANDING MODERATELY'
- LACKER DISSENTS FROM FOMC DECISION
This means that soon Primary Dealers' entire balance sheets will be filled with the entire inventory of Fed 1-3 year bonds. Market not happy. Full June statement here.
Full April-June statment redline.
The New York Fed announces more details on what will be bought:
On June 20, 2012, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to continue through the end of the year its program to extend the average maturity of the Federal Reserve’s holdings of Treasury securities. Specifically, the Desk was directed to purchase Treasury securities with remaining maturities of 6 years to 30 years and to sell or redeem an equal par value of Treasury securities with remaining maturities of approximately 3 years or less. The continuation of the maturity extension program will proceed at the current pace and result in the purchase, as well as the sale and redemption, of about $267 billion in Treasury securities by the end of 2012.
The FOMC also directed the Desk to continue reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities (MBS) in agency MBS, and to suspend, for the duration of the maturity extension program, rolling over maturing Treasury securities
into new issues at auction.
Purchases of Treasury securities for the maturity extension program will be distributed across five sectors using the same approximate weights that have been used in the purchases to date:
| Nominal Coupon Securities by Remaining Maturity* |
TIPS**
|
|||
|
6 – 8 Years
|
8 – 10 Years
|
10 – 20 Years
|
20 – 30 Years
|
6 – 30 Years
|
|
32%
|
32%
|
4%
|
29%
|
3%
|
*The on-the-run 10-year note will be considered part of the 8- to 10-year sector.
**TIPS weights are based on unadjusted par amounts.
This distribution could be altered if market conditions warrant.
A combination of sales and redemptions of Treasury securities will be conducted to match the amount of purchases over the program. Sales of Treasury securities will take place in securities maturing between January 2013 and January 2016. Securities maturing in the second half of 2012 will be redeemed—that is, allowed to mature without reinvestment—since redeeming maturing Treasury securities has a nearly identical effect on the portfolio as selling securities that are approaching maturity. Once the maturity extension program is completed, the Federal Reserve will hold almost no securities maturing through January 2016.
The Desk will continue to publish a tentative schedule of operations for the following calendar month on or around the last business day of each month. The schedule will include the anticipated amount of redemptions, purchases and sales to be conducted, operation dates, settlement dates, security types (nominal coupons or TIPS) to be purchased or sold, the maturity date range of eligible issues, and an expected range for the size of each operation. The next schedule of operations will be released on Friday, June 29.
All other program details remain the same at this time. Additional information on the program’s structure can be found in the revised Frequently Asked Questions for the Maturity Extension Program
* * *
Finally, and again, this is what happened after the Fed disappointed last time around:
»
- 22320 reads
- Printer-friendly version
- Send to friend
Similar Articles You Might Enjoy:
- QE4EVA Expands Fed-Eligible Treasury Purchases To All Risky Paper
- Liberty 33 To Get Busy (Officially) On August 17 When It Will Begin Purchases Of 2 Thorugh 10 Year Treasurys
- New York Fed Announces It Will Conduct 7 POMO Operations Beginning July 1 As Part Of Continuing QE Lite
- Does QE Really Work? The Evidence To Date
- Goldman Presents The Three "Radical" Measures The Fed May Engage In To Turbocharge An Imminent QE3
Goldman screws muppets yet again.
SUCK IT BERNANK !!!
Twist was such a smashing success before, so surely extending it will provide even more benefit to the global economy. /sarc
SURPRISE!!!!
Wish I would have manned up and bought Puts...but Im no gambling man.
Come on are you trying to tell me that you Mark Carney, GS alumn did not front run this in your PA, your mother's PA and your offshore PA in the name of your cat? No gambling man pssst pussy
Market is tiring of this game. Gold barely coughed up 3 bucks.
Tyler needs to update the title to MARKET HAPPY. Nothing can derail this ponzi
Nope,nothing except hanging all banksters.
Lets get to root causes. Hang all banksters!
You could have bought Molycorp. It's up 10% today.
Next up The Bernanke speaks to the market: "Bazinga!"
Market is not Angry
VIX < 18
Actually their plan is genius
Create so much distrust in the market that everyone pulls their money out and invests in Real Estate , thus stimulating the economy - fucking genius
Pimpco has been loading up on mortgage backeds thinking they'd be in the next QE. Bill Gross is just another losing gambler along with his followers. Why do people think he's a tuned in elite?
The markets must be propped up, at least until Election Day, NO MATTER HOW MANY HUNDREDS OF BILLIONS IT COSTS THE TAXPAYERS! COMRADE GREAT CHAIRMAN OBAMA's relection must not be endangered by this, no matter the cost.
(I've been calling this one for months)
Seriously, who is surprised by this? It's not like it's THEIR money they are using, after all.
"The markets must be propped up"
Maybe you didn't understand what was posted - they are contimuing "Operation Twist". That means they are buying U.S. Government bonds and bills, not securities. That won't prop up any market, unless you are gaming Treasury ETF's. Are you?
Thinking the twist is where they place prices where they shouldn't be.
The rule is that all prices have to make things look good.
So, he could be right.
Maybe you didn't understand. They're gaming the long end down even more, which is artificial stimulus. 2 years plus and you're still this clueless????
"2 years plus and you're still this clueless????"
I guess so. But to me, Treasury Yield does not equal (Stock) Market valuations. If it were equal, then why doesn't the yield change when jobless reports, inventory analysis, durable goods orders, etc. are spun to the positive and the Market (DJIA, NASDQ, S&P 500, Russell 2000) rallies to the moon?
I'm surprised there isnt a really large fund which trades against goldman's calls ...
That would be Goldman's trade desk.
There is, it's called Goldman Sachs!
Edit: Marginal Call beat me to it :(
Um, what do you think ZH does all day?
Muppet goes *POOF* into the wind
And here comes the rally off the lows on QE3 door still open and CNBC spinning it positive for QE coming. Market starting to love it!
when yours truly began investing in these markets i didn't sign up for TOTAL centrally planned subervsion of now bound, gagged, tied up and brutally (banker/fed) gang-raped markets. i am sure no one here did either...
Goldman sucks knew EXACTLY what Bernanke was going to say. They lie just like every Government official, the media, accounting firm, the scam list is endless. We are probably into QE95 for all we know. There could be 600 trillion given to the banks, and it still isn't enough..
Got to GO with the FLOW or STOCKS in de HOLE!
Hey DOW, we will goose you a little, but just a little, because we have to keep our powder dry for the Middle East blow up coming soon.
SUCK IT BERNANKE !!!
A centrally planned nightmare...
Market Angry - Market Smash - Market Sad....
Hulk depressed...
FUCK OFF BERNANKE!
I dunno, I'm starting to like the guy. He's making this shit WAY too easy!
Nah, fuck him... dead square in the ass.
How much < 3yr debt does the Fed have left?
All of China's.
Yeah. I thought they were going to run out of all that short term debt by the end of August.
Run out? I thought ~$100 Billion of fresh new USTs come out every month ...
Fed, not Treasury. Sort of defeats the purpose if they're buying as many freshly minted 3Y as they're selling under Twist2.
Quantitative Twist; buy the short term treasuries from the Primary Dealers, sell them back and then buy long term Treasuries. Brilliant!
The nonexistent market isn't happy?
They're not happy ?
No reaction yet - will this turn into a rally yet again?
Looks like this result has been "Priced into the market" already
definitely bullish for (already) overpriced equities. lulz
Bernanke to Wall Street "You're gonna have to let the market tank if you want to see the helicopters"
can't have that before end Q2 or risk redemption notices
Market NOT happy
PMs not happy.
Yes. "Investors" are selling their gold because the Fed has further debased the currency.
Makes a shitload of sense to me.
But I am. Time to buy up more PMs on the cheap.
Ben threw the market a bone. Now back to Europe.
"Ben threw the market a bone. "
Huh? How about: "Ben boned the market"?
There, fixed it for ya'.
How about, "Ben's bone is the market?"
"Ben's bone is the market?"
So, futures are pointing down? Possibly due to lack of stimulus?
Buy the Euro
FED says it is prepared to take further action "as appropriate"
There's a word that has been redefined.
Time to stack.
Not yet.
Without QE, dollar could rise, and gold could fall. Wait for the sale in gold to play out. Then buy.
It will only happen if there is a squeeze that will create a sell for the paper gold ( the most liquid asset available - of course the physical ), and one (probably) can buy physical. Otherwise, if there is NO squeeze, all the players will hold the gold for there is constant printing that naturally will push the prices up.
So note the difference, the gold sells only on a squeeze, why else one is to sell the most liquid and comparatively well performing asset, especially with the expectation that there will be constant QEing, in no matter what form.
SHORT TBT!
Still undecided here at TBT central
Dumb equity traders, did they think they were going to get more money printing with the S&P at 1360?
They'll catch on when the coke wears off. Oh, wait.
They are pretty fucking stupid. They won't get their fix until the S&P hit's 1100
Indeed, that's the target I've set for selling all my many puts that I've bought over the last 3 months. This whole pump and dump thing was so obvious. They must crash the market like they did last summer if they want more free money. ZH has been spot on about this for the last couple months. And the crisis in Europe and absence of any funded or authorized ESM bailout fund (potentially funded by the countries which need bailout) is just icing on the short's cake (get the pun?).
Put holders will all be singing "I'm in the money, I'm ITM" by August or sooner.
Daddy? What does 'stacking' mean?
Skynet is not amused.
All the buildup for this?
ty fur yer attention, shooter!
bull's eye BiCheZ!
I was just hoping to see the deer again today. Oh well, off to make some music.
I also miss the popcorn chewing deer. Come back deer!
The markets are throwing a fit. No heroin today, maybe in August.
what are you talking about? the DOW is down 33 ... exactly where it was before the FED announcement ...
Maybe you ought to look at a tick chart and compare it to my post time. I can't help it the equity traders are stupid enough to keep being played by Ben in hopes of QE in August.
DOW 20 pts in the green now. Somebody likes TWIST and wanted more of it. Still think this will wear off next week.
Which market is that? The one that is down less than 0.3% now?
No QE until after the election.
http://www.wilsonstation.com/wp-content/uploads/2011/06/greyhound-rabbit...
Zzzzzzzzzzzz
This is exactly what I said would happen. Can't have QE with the market front running it. Their stupidity did the Fed's bidding. The hope of QE was enough to get stocks where Bernanke wanted them.
August will be interesting. Obama needs QE to win the election, but high gas prices could lose it for him.
I don't think it was a dumb move. Wall Street was able to make a little more money before the market tanks. Now they can sell and wait for things to get bad enough to force Bennie Boy to announce QE 3.
I would suspect that gas prices fall back around $3/gallon before this happens.
But how does he announce QE3 and keep down gas prices before November? He needs to do both. Maybe Obama lifts gas taxes to play his Superman role. 2013 is going to be so brutal.
Monetize the debts of the frackers, so they can bring more oil to market with lower debt levels? I guess that would be a bit too obvious if all of a sudden Chesapeake was borrowing money at 3%. Maybe they should become a Bank Holding Company so they can get direct access to the discount window?
This movie has been going for too long. We know the plot....lets get some action.
Expected. Goldman fleeces muppets yet again.
And with ZIRP, the capital mis-allocation and mal-investment continues.
Free money to save the banks and financial houses, as far as extending credit to the actual innovator, no soup for you!!!
ol uncle buck is up and walking towards the punchbowl. not a good sign for risk.
And.... bitcoin to new monthly highs. Thanks Ben!
Ah yes, because it is backed by something real such as ....
oh wait, nevermind.
Better than what you have in your pocket :)
I like comments like this actually, shows that I'm on the leading edge and not muddling through like the other 90%. Speaking of percent, my return on investment beats the living hell out of a crappy backed-by-the-govt bond or CD.
Stick with that low-yield strategy, I'm sure the government thanks you... by printing more, lol.
"Stick with that low-yield strategy"
I don't remember giving you access to my portfolio. Thanks for self-identifying as a useless troll.
If you deal in dollar-denominated < anything >, you're using a low-yield strategy :)
Since operation twist is extended and the euro is about to implode, I'm sure you'll be just FINE.
I don't care whether you personally use bitcoin or not, more for me, in any case. At least MY choice of currency isn't run by a bearded maniac.
"If you deal in dollar-denominated < anything >, you're using a low-yield strategy :)"
Well, except for the fact that GSE's and SAE's have a "Dollar" valuation stamped on them. Their return seems to be outperforming over the last 10 years or so.
Its more of an argument regarding the dollar's declining status, than anything else. If you can pick up the cash in front of the steamroller, go right ahead. I'd suggest looking into alternatives.
As I understand it, the key advantage to bitcoin is that the money supply grows in a linear, rather than exponential fashion.
as opposed to existing debt which is growing exponentially and is used as money in the current system. FAIL.
No "currency" backed by only "faith and confidence" will succeed when there is neither faith nor confidence in the market. No rule of law, the currency must be back by something, period. Return the rule of law (where is John Corzine) and only then will faith and confidence return.
Anything else is mental masterbation.
The introduction of currency is controlled by an algorithm, not a bearded idiot who presses Ctrl-P every chance he gets. Best of all, there's a cap on total issuance, but since it is divisible to 8 or so decimal places, this isn't a problem.
The thing that amuses me about bitcoin haters is they just end up using the same foils that would expose their currency as a fiat fraud, while the blockchain protocol hums along sidestepping the central banker lunacy.
No QE this year. That is obvious.
Do you see what happens Benny? Do you see what happens when you don't print more money? *Market Crashes* This is what happens, Benny!
Saving the big ammo for the attempted saving of Obama in the fall.
Did we not call it? Goldman has been calling for imminent QE3 since QE2 ended. Goldman was selling their equity exposure into the ramp fest.
BORING!!!!!!!
FUCK U BERNANKE AND UR BITCH ASS BANKER COCKSUCKER BRETHREN..
Silver Biatchez......
I can't wait until he has to reverse course and explain why they need another program. I'm going to sit back and saviour that presser/statement
Keeping powder dry to bail out Europe when Germany declines the priviledge!
"Keeping powder dry to bail out Europe"
Alternately, could this be a sign that they have no powder left?
They have a powder factory, they can make as much powder as they want; however, the more they make, the less powerful it is, so they still have to use it quasi-sparingly.
I don't see it as a "factory", just a storehouse. As they dilute the powder, it becomes less effective - as you have alluded to. Could it be that the powder has been so diluted that it now takes a flare instead of a spark from flint against a steel frizzen to ignite it, and they don't want the world to be any the wider about it?
Funny people sit around all day waiting for the Fed. The Fed is impotent. The reason he keeps doing the Twist is because the Bernank is petrified. He knows he is powerless to do anything to prevent the deleveraging, so he keeps dicking around shuffling paper.
Yet day after day all I hear is Gold is going to a million and QE3 is coming. Geez…
He's tried stimulating it, mouthing on it, prodding it, shocking it, easing it, lying to it, why not try twisting it again? Maybe, it will grow.
So the fed has become a market fluffer?
has become a market fluffer? Has been the market fluffer since the days of the Greenspan Put.
Tyler, how can they do this when they can't?
Right?
I thought they didn't have enough short term debt to continue OT......
Short term debt is pretty much liquidated. Now they're looking at what I would consider Intermediate term (greater than 3yrs).
I have a better description:
Fed agrees to continue extending 0% financing to primary dealers to buy short dated Treasuries so the Fed can buy longer dated treasuries from primary dealers that nobody else in the world wants. The optics of a sound reserve currency will be maintained for a while longer.
Full ponzi mode!!! Is that the sound of an empty tin can bouncing down the road?
"Oh yeah, and if you have anything left at the end of the day, push it into either the Russel or the S&P"
More? Moreeeee? the history of never end.
S&P up 7% in 3 weeks based on QE rumors, and only gives back 1% on no QE news. Insert thrmometer in penis, and hit with hammer.
Ouch! The sell off might not take place until 3:00
I actually felt that !
Stocks rallying! haha
I don't care. It don't matter to Jesus.
Fed will wait until everyone is on vacation and the vapors turn ot a trickle to "surprise" the market. Commodities down equities hold. Fed pom poms out.
Expected it, nothing new basically.
bought puts, no change in value... stocks unch...
So, $267 billion more until end of year. That may be the extent of it unless things get really ugly since politics now get trickier with the US election. For a few months we can focus on fundamentals instead of the arrival of the tooth fairy.
Not according to CNBS you can't. 'QE is all in plave' - Pissonme
The racketeers created the monster. The monster has turned on them.
Their creation will be their destruction. They have no idea what to do.
We may not be able to see their panic, but the smell is getting stronger.
the definition of insanity....
Dont worry: Von Rompuy has a blue print for euro bills ready. SPIN SPIN SPIN! WIN WIN WIN!! Let it riiiiiiiide.
Release the Kraken!! We need it now!!
Not enough juice in that dose.
Brian Sack with an ES stick save! That'll move the equity chains!
Like it never happened bitchez! Damn I love STAWKS! Fuck metals! Buy these hot ass domestic stawks!!!!!
Oh yeah Nasdaq goes green with copper down 1.5%. Stocks for life!
aaaaaand the market is now 10 minutes away from going green....
this shit really is going to levitate forever. btw, don't forget they mentioned "inflation is low". aka, keep front running QE because you're going to get it eventually, you magnificent bastards.
the bernank plans to make a weiner dog out of the yield curve eventually. http://dreamdogsart.typepad.com/.a/6a00d8341c192953ef0148c7c8afc9970c-450wi
Green
lets twist again;... buy my new lamps for your old lamps...Aladin Bernanke!
So, when's the selloff in equities, as folks move into Treasuries - knowing that there will always be a buyer for them?
What a joke!
The implicit promise of more QE ramps the market 7%, gets a cold hot dog and likes it!
Double or nothing Bernanke Smails eats it!
$267B > 0. People see this as QE.
...as The Depression Deepens into a Downward Death Spiral.....
stcks refuse to believe.. they are in for some pain.. get the big stick.
Twist really did little. But Bernanke will do QE3 in September.
http://confoundedinterest.wordpress.com/2012/06/20/will-bernanke-twist-again-like-he-did-last-fall-the-evidence/
Oh good fucking grief! Being short is like being Charlie Brown trying to kick the football!
When the bears finally get their day in the sun it's gonna be ugly...
Kick Lucy in the face.
WTI is off 2.5%, this is all you need to know. Until the price of oil is firmly below $80, no real QE action can be taken.
Bennie is boxed in, they are trying to keep the market levitated while driving down the price of commodities.
The election is the only thing that matters right now.
sschu
The only "flow" in this market is the money being lost by shorts being mercilessly squeezed. We have a perfect storm for shorts; lots of reason to short, that keeps the short positions being taken and retaken over and over. But billions in free ZIRP money to start the reverse cascade with. This will keep happening until the SHTF for real and serious profit taking starts
reminds of the NFLX pattern. it was nothing but a contiunous squeeze from about $150 to $300 - no actual buyers the whole way up, just forced buyers. each new round of shorts just couldn't help themselves, it was just too insane a valuation. then the shorts finally capitulated about a week before they gave a poor guidance report, and it cratered to $60 in about a month.
Exactly, when all the shorts are forced out there is no buying to cover on the way down. That creates free-fall.
It's all about the Sp 10 Yr. Until it bloows over 7% again.
Believe nothing from this group.