For The First Time In History, Fed Will Buy AND Sell Treasurys At The Same Time On Friday

Tyler Durden's picture

Following today's unprecedented POMO failure due to "system difficulties" (one would hope the Fed's POMO machine does not start and stop every time someone pulls the plug from the socket), Brian Sack's team (not to be confused with the PWG team of Eric Mindich) had to reschedule the literally failed auction. As it turns out, the first opportunity to sell $8-$8.75 billion in 2013 bonds is on December 2. And unlike the December 21 "reverse" POMO which is due to take place at 1:15pm, the rescheduled bond sale will instead occur at its usual time of 10:15-11:00am. Ironically, this is also the time when the Fed will be buying $2.25-$2.75 billion in 2036-2041 bonds. In other words, for the first time ever on Friday the Fed will be literally selling and buying bonds (although selling 4 times more than buying) at the same time. If this is not the pinnacle of deranged monetary policy which does not even attempt to offset monetization by a few hours, then nothing ever can be.

Source: NY Fed

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gangland's picture

market makers the price stability

UGrev's picture

A box of markets, 

A box of mixed markets 

and a market mixer.

Five time fast.. GO!

Pool Shark's picture



Given that TPTB believe we need to spend more to get out of debt; this comes as no surprise.

 "We had to destroy the dollar in order to save it..."



Nobody special's picture

Think critically about this.  It does make sense.  Nations do not want their 30 year treasuries, so if they agree to buy lots of short term debt, the US will buy a little of their long term back.  It's a means of leveraging the fear of long term debt devaluation.  Hardly a positive situation.

Darth..Putter's picture

Wait, wait....I thought that this is what they've been doing for four years.

max2205's picture

Twist and scream... I mean Shout. Ben is like a retard with a Bazzoka


You mean, oral and anal sodomy at the same time? Brilliant. 

Tijuana Donkey Show's picture

anal sodomy? Isn't that redundant phrasing? Like military waste, or congressional pork? I think that sodomy, military, and congress imply the second word.

TruthInSunshine's picture

Bernank broke the markets.

Pretty soon, we'll learn of an art or livestock auction that The Bernank attended while on vacation, in an attempt to have some R&R, whereby The Bernank outbid himself on every item sold, only to be arrested at auction end after failing to have enough fiatski to pay the tab, as he forget he didn't have access to his Staples Easy Printing Button.

LawsofPhysics's picture

Exactly.  To think that the cost of real goods and serices isn't going to explode upwards as commodities go higher is simply insane.  Margins matter in the real world, unless of course you have direct access to the Fed's printing press and the taxpayer's wallet.

GeneMarchbanks's picture

'Bernank broke the markets.'

Nah-uh. That, my friend, is crazy talk. Even if it were true, I'm sure we'll see Sack and Mindich here to fix real soon.

Vincent Vega's picture

Ponzi n. - A fraudulent investment scheme in which funds paid in by later investors are used to pay artifically high returns to the original investors, thus attracting more funds. 



undercover brother's picture

spread the wealth, keep those primary dealers happy.  well done

hedgeless_horseman's picture



I doubt that this will be the first time Bernanke is Lucky Pierre, both giving and receiving at the same time.


RobotTrader's picture

I'm calling this the "ServPro" market.

"Like it Never Happened"

So many U-turns, reversals, etc.

GOSPLAN HERO's picture

Your mother is looking for you.

She has a paddle in her hand.


LawsofPhysics's picture

If that's robo in the picture, I am looking for her, with several devices in hand.  Seriously though robo, what is today's advice from captain hindsight?  Lighten up people.

GMadScientist's picture

You're like those birds that brain themselves flying into plate glass windows.


sabra1's picture

and a canoe in the other!

GrinandBearit's picture

Nah, she knows exactly where he is... he's in his mommies basement.

Robot Trader's brother's picture

Mom knows he hides in the attic with his computer.

My brother craves the troll attention.

Just ignore him....

UGrev's picture

You make me look smart when talking about the markets.. and that's not saying much for you :)

firstdivision's picture

What a perfect way to prevent the market jubilee from crashing into reality.  Could you imagine what would have happened with the fed sucking $8B out of banks coffers today (and that is without leverage).

Time to short this shit show of a market.  I cannot wait til it figures out that Europe is still insolvent, there's $100T new outstanding derivative contracts than last year, and that the China bubble has begun deflating.

fuu's picture

We call him cumulonimbus because he makes it rain.

GolfHatesMe's picture

Hopefully RBS buys them all. 

GeneMarchbanks's picture

The most deranged monetary policy... so far.

Everybodys All American's picture

At some point wouldn't it just be easier to just 'lose' the Treasuries. The joke is pretty much known to all is it not?

IBelieveInMagic's picture

Who is to say it is not happening already? Debt to fund consumption and entitlement payments can never be paid back -- all this 3 card Monti shuffling is just to fool the rest of the world that is supplying real stuff in exchange for paper and electronic bits. Fed is the portal thru which non-performing paper go to heaven! 

semperfi's picture

So does this mean that they are buying what they are selling?  ;P

El Viejo's picture

Ha! Maybe they are putting our money where their mouth is.

Hansel's picture

Dude is churning his portfolio.  Economists suck at trading.

whatsinaname's picture

can I givve Hansel the green arrow a thousand times ?


LawsofPhysics's picture

All fine and good until real demand has to be met and the suppliers ask for more and more paper (asking for anything else apparently gets you the attention of NATO's "freedom" force).

HD's picture

I hope the perma bulls enjoyed this today - Fed isn't just out of bullets - it threw away the gun.

LawsofPhysics's picture

Yep, but for no it is irrelevant as they have complete control over the "1's" and "0's" that the add and subtract.  Just wait until the system becomes self aware, then shit gets real.

sabra1's picture

when the bulls accounts are busting at the seams, that's when the fed pulls a MF Global!

GMadScientist's picture

They loaded the bullets and then threw the gun.

Joe Sixpack's picture

Trading long term debt for short term. No confidence in the future.

sabra1's picture

i'm gonna wait for gold to drop, so i could sell it back to myself for a better price!

s2man's picture

OMG, you could make a fortune doing that!

adr's picture

I'm going to buy a car and claim that in 60 years it will be worth $10 million and sell it today for $10 million and then use that money to buy 100 more cars that I say will be worth $10 million each alowing me to become a billionare overnight. Isn't that exactly the kind of math the FED ad the banks are using right now?

GMadScientist's picture

I'm gonna short PMs...and then become a successful alchemist.

MFL8240's picture

Markets are not made on printed money, they are made on Growth and REAL profits (not accounting gimmicks).  This is all just trading and trading on the news of the day. I would stay out. 

firstdivision's picture

I know one guy that would disagree with you.  (hint: his initals are BB)

Sandy15's picture

going to sell out of positions and pull ALL money out of accounts.  Went to the bank yesterday, they would only allow me to withdrawl $1000 per day........BUT I bet if I take $10,000 to deposit they wouldn't turn me away saying I can only deposit $1000 per day........  it has started with them controlling our money supply to us.