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Fed Sells $8.870 Billion Bonds At 7.85 Bid To Cover
Well it wasn't quite the blow out we had expected but the BTC in today's "reverse" POMO, in which the Fed sold $8.870 Billion in 2013 bonds was still a whopping 7.85x following the receipt of $69.6 billion in bids. That said, this number was a dramatic plunge from the over $240 billion that PDs wanted to buy in the first Operation Twist bond sale and one certainly would be delighted to find just what it is that stopped dealers from going hog wild in bidding on this auction, especially with stocks so much higher, and hence the need for excess liquidity that much less. Anyway, the next sales operation will be on October 17 in the 04/15/12 - 07/15/14 TIPS sector. At that operation, the Fed expects to sell between $1 and $1.5 billion of TIPS. Today's sales operation was the first in the 1.5- to 2-year sector. There will not be another operation in this sector until November as the Fed will focus on the far shorter-end of the curve. Cumulatively, the Fed has purchased $12.681 billion of securities, consisting of $11.312 billion of nominal issues and $1.369 billion of TIPS. The largest purchase was $4.590 billion in the 11/15/19 - 08/15/21 sector on October 4. The Fed also sold $17.740 billion of securities.
Today's POMO summary:
Cumulative Operation Twist summary:
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Well at least something is selling in this economy.
Wouldn't it be great if the housing market had 7 bids for every house?
uhhm...the housing market did (See 2003-2007 "no-doc" bidding). That worked out real well.
Non-event this rPOMO.
A teensy bit of "tightening" in the brief beginning of Op Twist? Have sold more bonds than bought so far.
Hmmmm. 10 yr auction results suggest maybe some do think a bit of tightening underway. BTC, indirect and direct participation well below averages. Important to watch 30 year tomorrow. Operation Twist can't be too happy with this.
So, they're getting the beast fine-tuned as to not look so dramatic?
Managing Expectations 101
Isnt it funny how 'QE' is not even mentioned anywhere now only 2 weeks after all the world was hanging on every second in anticipation of it?
What a scam.
you missed the QE2 in the uk?
Fack!
did anyone catch the telegraph story about the BoE refusing to buy bonds which had been pushed up in price by traders. i would post the link but the comment box wont let me when im useing the cellphone
http://www.telegraph.co.uk/finance/economics/8819296/Bank-of-England-abandons-part-of-QE-program-after-traders-make-bonds-too-expensive.html
who cares???
Wait.... There was a ZH article just previous to this one, and quoted:
So, what happened? Was the "incremental efficiency" off the mark?
What went "wrong" with this auction?
Something needs to be explained by someone a helluva lot smarter than I am.
I like conflict but not amongst my trusted sources like ZH.
Is Tyler(s) going schizoid on us? ...or would that be self-explanatory? And would "self-explanatory" be sorta schitzy?
The minds reel.
Can anybody explain me the reverse pomo?
It's being advertised as the opposite of printing dollars, whilst I don't see the Fed destroying money - they're adding to the pile.
"... one certainly would be delighted to find just what it is that stopped dealers from going hog wild in bidding on this auction..."
Bueller? Bueller? Anyone?
Why/how does reverse Pomo send the market up ?