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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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Wed, 11/30/2011 - 16:22 | Link to Comment gangland
gangland's picture

market makers the price stability

Wed, 11/30/2011 - 16:23 | Link to Comment Peter_Griffin
Peter_Griffin's picture

market makers breakers

Wed, 11/30/2011 - 16:28 | Link to Comment UGrev
UGrev's picture

A box of markets, 

A box of mixed markets 

and a market mixer.

Five time fast.. GO!

Wed, 11/30/2011 - 16:39 | Link to Comment Pool Shark
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..."

 

 

Wed, 11/30/2011 - 16:43 | Link to Comment Nobody special
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.

Wed, 11/30/2011 - 16:49 | Link to Comment Darth..Putter
Darth..Putter's picture

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

Wed, 11/30/2011 - 17:49 | Link to Comment max2205
max2205's picture

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

Wed, 11/30/2011 - 18:23 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

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

Wed, 11/30/2011 - 20:39 | Link to Comment Tijuana Donkey Show
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.

Thu, 12/01/2011 - 00:08 | Link to Comment GMadScientist
GMadScientist's picture

Anal pork waste. AKA Santorum.

Wed, 11/30/2011 - 16:30 | Link to Comment TruthInSunshine
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.

Wed, 11/30/2011 - 16:36 | Link to Comment LawsofPhysics
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.

Wed, 11/30/2011 - 16:42 | Link to Comment GeneMarchbanks
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.

Wed, 11/30/2011 - 16:43 | Link to Comment NotApplicable
NotApplicable's picture

He wasn't even born then.

Wed, 11/30/2011 - 17:29 | Link to Comment Vincent Vega
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. 

 

 

Wed, 11/30/2011 - 16:22 | Link to Comment undercover brother
undercover brother's picture

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

Wed, 11/30/2011 - 16:45 | Link to Comment hedgeless_horseman
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.

http://www.urbandictionary.com/define.php?term=lucky+pierre

 

Wed, 11/30/2011 - 16:22 | Link to Comment RobotTrader
RobotTrader's picture

I'm calling this the "ServPro" market.

"Like it Never Happened"

So many U-turns, reversals, etc.

Wed, 11/30/2011 - 16:26 | Link to Comment GOSPLAN HERO
GOSPLAN HERO's picture

Your mother is looking for you.

She has a paddle in her hand.

 

Wed, 11/30/2011 - 16:33 | Link to Comment LawsofPhysics
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.

Wed, 11/30/2011 - 17:17 | Link to Comment Spastica Rex
Spastica Rex's picture

It's not real.

Thu, 12/01/2011 - 00:09 | Link to Comment GMadScientist
GMadScientist's picture

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

 

Wed, 11/30/2011 - 16:29 | Link to Comment sabra1
sabra1's picture

and a canoe in the other!

Wed, 11/30/2011 - 17:01 | Link to Comment GrinandBearit
GrinandBearit's picture

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

Wed, 11/30/2011 - 17:50 | Link to Comment Robot Trader's ...
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....

Wed, 11/30/2011 - 16:29 | Link to Comment UGrev
UGrev's picture

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

Wed, 11/30/2011 - 16:35 | Link to Comment firstdivision
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.

Wed, 11/30/2011 - 16:24 | Link to Comment fuu
fuu's picture

We call him cumulonimbus because he makes it rain.

Wed, 11/30/2011 - 16:24 | Link to Comment GolfHatesMe
GolfHatesMe's picture

Hopefully RBS buys them all. 

Wed, 11/30/2011 - 16:24 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

The most deranged monetary policy... so far.

Wed, 11/30/2011 - 16:26 | Link to Comment Everybodys All ...
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?

Wed, 11/30/2011 - 16:36 | Link to Comment IBelieveInMagic
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! 

Wed, 11/30/2011 - 16:26 | Link to Comment semperfi
semperfi's picture

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

Wed, 11/30/2011 - 16:38 | Link to Comment El Viejo
El Viejo's picture

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

Wed, 11/30/2011 - 16:26 | Link to Comment Hansel
Hansel's picture

Dude is churning his portfolio.  Economists suck at trading.

Wed, 11/30/2011 - 18:11 | Link to Comment whatsinaname
whatsinaname's picture

can I givve Hansel the green arrow a thousand times ?

+1000

Wed, 11/30/2011 - 16:27 | Link to Comment LawsofPhysics
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).

Wed, 11/30/2011 - 16:28 | Link to Comment HD
HD's picture

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

Wed, 11/30/2011 - 16:30 | Link to Comment LawsofPhysics
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.

Wed, 11/30/2011 - 16:34 | Link to Comment sabra1
sabra1's picture

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

Thu, 12/01/2011 - 00:11 | Link to Comment GMadScientist
GMadScientist's picture

They loaded the bullets and then threw the gun.

Wed, 11/30/2011 - 16:29 | Link to Comment Joe Sixpack
Joe Sixpack's picture

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

Wed, 11/30/2011 - 16:31 | Link to Comment sabra1
sabra1's picture

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

Wed, 11/30/2011 - 16:43 | Link to Comment s2man
s2man's picture

OMG, you could make a fortune doing that!

Wed, 11/30/2011 - 16:49 | Link to Comment adr
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?

Thu, 12/01/2011 - 00:13 | Link to Comment GMadScientist
GMadScientist's picture

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

Wed, 11/30/2011 - 16:34 | Link to Comment MFL8240
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. 

Wed, 11/30/2011 - 16:36 | Link to Comment firstdivision
firstdivision's picture

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

Wed, 11/30/2011 - 16:37 | Link to Comment Sandy15
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.

Wed, 11/30/2011 - 16:40 | Link to Comment LawsofPhysics
LawsofPhysics's picture

What bank?

Wed, 11/30/2011 - 16:35 | Link to Comment Sandy15
Sandy15's picture

So are they going to buy the bonds that they are selling.........CRAZY CRAP!!!!!!!

Wed, 11/30/2011 - 16:39 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Yep, thus allowing the primary dealers and paper-pushing financial fucknuts to collect their fees and bonuses - stealing wealth while adding no real value.

Fuck them, the sooner the system crashes, the sooner compensation (in whatever form that may be) returns to people who are actually worth a shit.

Wed, 11/30/2011 - 16:35 | Link to Comment Thorny Xi
Thorny Xi's picture

"I didn't know it was biologically possible to suck and blow at the same time."  Bart Simpson

Wed, 11/30/2011 - 16:36 | Link to Comment hambone
hambone's picture

This is like the banker in Monopoly grabbing sticky notes and writing any amount on 'em and floating them...and doing it right in front of you...if you don't get it now, you are willfully blind.

Wed, 11/30/2011 - 16:38 | Link to Comment b_thunder
b_thunder's picture

"...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.."  

Why is it so surprising?  Don't you know the Fed's official motto-  Buy HIGH, sell LOW! 

Also, this is the easiest way to let day-traders earn a few million dollars withot them taking on the risk of carrying positions overnight (when who knows whioch country/bank/MoFo Global will file Chapter 11)

And lets not forget those fees and commissions on the round-trip trade - double the commish, double the fun (later that evening, at the strip joint)

 

 

 

 

Wed, 11/30/2011 - 16:38 | Link to Comment the not so migh...
the not so mighty maximiza's picture

they are bopping their own baloney on friday

Wed, 11/30/2011 - 16:44 | Link to Comment adr
adr's picture

WTF seriously? How do you get a maturity range of 5 years on a bond? So the Fed is selling bonds that mature in two to three years and buying the long dated bonds at the same time. When d they sell back the long dated bonds they bought? The past two days have made my head explode. My brain can't take any more stupid. Maybe I'll turn on Cramer so  can end it all.

Wed, 11/30/2011 - 16:45 | Link to Comment pmcgoohan
pmcgoohan's picture

Its the Arb of the century

Wed, 11/30/2011 - 16:47 | Link to Comment Fazzie
Fazzie's picture

 This must only make sense to a Princeton PHD. And why the hell bother with a few bill of sales when you have just essentially took Europe on your balance sheet?

Wed, 11/30/2011 - 16:50 | Link to Comment NotApplicable
NotApplicable's picture

Bennie's going looooooong maturity. (as if the Treasury had any)

Wed, 11/30/2011 - 16:52 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Wonder what it would be like to live in a time of a true gold standard. Bet it was awesome.

Wed, 11/30/2011 - 17:07 | Link to Comment Honey Badger
Honey Badger's picture

As disgusting as eating and puking at the same time. 

Wed, 11/30/2011 - 17:12 | Link to Comment Atomizer
Atomizer's picture

Friday's Circus Act

Uncle Ben: Ladies & Gentleman, I am placing the pea under the shell.. quickly shuffles the shells around. Which shell is the pea under?

Wed, 11/30/2011 - 17:14 | Link to Comment Elwood P Suggins
Elwood P Suggins's picture

On Friday Ben Bernanke will shit and wind his watch at the same time.

Wed, 11/30/2011 - 17:57 | Link to Comment Bastiat
Bastiat's picture

Buying down the long end of the curve to keep mortgage rates down and allow some more Muni refundings.

Wed, 11/30/2011 - 18:00 | Link to Comment Black Friday
Black Friday's picture

Monetary masturbation at its finest :p

Wed, 11/30/2011 - 18:49 | Link to Comment YesWeKahn
YesWeKahn's picture

They are different from the criminals on the street, they tell you what they do to robe you and kill you.

Wed, 11/30/2011 - 19:17 | Link to Comment lemonobrien
lemonobrien's picture

masturbation at its finest.

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