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S&P Above 1400 As Fed Conducts Second $600 Million Repo Following Nearly 4 Year Hiatus
Last week we explained why while endless promises of Fed intervention may be enough to confuse the market and force endless rounds of short covering as weak hands are flushed out of positions under threat (but never action) of central planning, banks are no longer in a position to delay indefinitely the moment they have all been waiting for: a $500+ billion reserve injection which will allow them to go hog wild in investing in risk assets or plug capital shortfalls (off the books of course), and otherwise continue their lives in a ZIRP environment which makes net interest margin existence impossible. We also showed that for the first time after nearly 4 years, the Fed conducted a regular (not reverse) repo last Friday. As we explained, regular repos are liquidity injecting, and while the Fed may promise these are merely test runs, everyone knows they are anything but, and are merely a telegraphing to the banks of what is in store. Today, the day after the last repo expired, we just got a new 3 day repo, only not for $210 million this time, but one for $600 million, including not only Treasury, but also Agency and MBS securities. The result: S&P above 1400 for the first time in months.
From the NY Fed:
And this is how the history of the Fed's various repo operations has looked like in the past 4 years.
Sure enough, the S&P just went above 1400 like clockwork.
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and what is next ?
"and what is next?"
SPY 142.53 / ES 1423.50
The only way the $SPX tanks now is if I go ALL IN on otm SPY 150 calls...
Do it Francis, I'll be happy to take the other side of that trade.
No way Jose...
The only way I keep my sanity [which, arguably, is hanging by a thread], is to stay completely away from paper markets...
~~~
Oh ~ that AND, the occasional cheap entertainment value I get by ruffling the feathers of peacocks... which is an artform in of itself... :-)
Park your car in any major city. Pay for the parking meter, hotel parking or parking lot. Then try to tell us there is no inflation. Not only is there inflation --- it's up about 100% in the past 5 years. Unlike chicken, eggs, milk, pork, vegetables and fruit, you can't make many more parking spaces. Not without covering equally inflated unionized labor and healthcare --- and maybe not even then.
never been to New York I see :)
http://image.ec21.com/image/xjgckevin/oimg_GC04288245/Car_Parking_System.jpg
CPI sample period for Fed .gov ends around mid August I believe.
WHO NEEDS "QE" WHEN YOU ALREADY HAVE QE 24/7/365
I believe it's referred to as 'monetary policy'
SP-500 will test 1,420 points. If this level breaks, would have a good chance of dealing with 1.570 points, which represents 2007 high. if it fails this purpose, we would see a new leg down. Today in my blog there are two very interesting post on this topic.
In the old days...when charting made sense, you may have been correct. In these rigged markets, only the large Wall Street banks win. As long as the printing presses can keep printing, It's all Bullshit!
dead on. why do some still try to apply technicals to this joke is beyond me.
I just love it when they mainline the (leveraged) fiat directly into my blood stream. What a freaking high. Was that as good for you as it was for me!
<sigh> I love Bernanke!
/sarc
Freebasing fiat has replaced bath salts and the bankster zombie apocolypse continues.
Bernanke is The Candyman.
"The candyman mixes it with love to make the world taste good."
They call him Cumulonimbus, because you know he makes it rain.
We knew this was coming, the Fed never removes its hand from the market. No one, least of all politicians, understands the effects of repos. What better way to levitate everything while the world crumbles. Anyone shorting now is martyring themselves.
CD, long time, hope you're well.
like ive said a thousand times. theres a short ban just like Europe. We just do things in stealthy ways here. no different. At least the eurpeans have the balls to tell everyone
2008 is fully back but this time with all the mountains of debt that have ballooned since.
We all know what this means. They are losing control again.
The real question which banks are needing them and remember this after Bernake telling us just last month our banks are much better capitalized since the 08 crises.
If so then why the desperate actions again?
It's like a kid jumping over a coffee table. They do it once. Then again. Then every time they go through the room. Then one day, maybe they're tired, shoe isn't tied or somebody parks something on the other side of the table. If that doesn't happen then they get a longer table to jump or people stop caring and start leaving things piled on the table. Moral hazard happens. Risky behavior rises to the point of failure. People think they ARE THAT GOOD.
Looks like the SBS is freezing up.
How long can this Wily E Coyote moment last until gravity asserts.
Get the hell out if you are still in this 'market'.
Strange how those inverse ETF closed down last week.
More and more signs of imminent collapse.
<--- doin' it for the people
<--- doin' it to the people
<=== 1500 first
<=== 600 first
Is Ron Paul going to investigate this mis-use of Fed funds?
Ron Paul is going to bark and jerk off like he always does.
Supporting that bastion of distraction only wastes your time and ensures nothing changes.
the most dangerous man in the world to TPTB...
Ron Paul Barred From Speaking at Fascist RNC Convention in Tampa
Posted by Lew Rockwell on August 6, 2012 08:21 AM
Even though this is an outrage in one sense--Ron Paul is one of the very few non-sociopaths in Republican politics--it also makes sense. After all, he would have been required to Heil Romney in his speech, in words written by the Mittster's minions, and that is something Ron Paul would never do. After all, Romney--warmonger, Keynesian, bankster, nationalist, gun-controller, socialized medicine advocate, dronist, torturer, police statist--is the exact opposite of Ron Paul. Romney clearly yearns to commit mass murder against the Iranians. Let's face it: Ron Paul is far too good for the Republican party. And in what passes for its heart, that criminal organization knows it. (Thanks to Travis Holte)
http://www.lewrockwell.com/blog/lewrw/archives/117322.html
Heroin junkie scores two methadone suppositories. Film at 11.
But things are better. Things are so good there's talk of New QE. And Europe's better. How ever can this be?
Tulip Bulbs Bitchezzzz!
S&P500 has massively outperformed gold so far in 2012, for the first time in a very long time, without taking dividends into account.
Can HFT keep it up forever without ever taking reality into account?
I'll be happy to buy your gold from you if it gets you to stop bitching about a voluntary investment you made all by your lonesome.
Stating facts is not bitching.
Well that's my mistake. I see your name, then gold, and I figure I should take your comment as a form of bitching about gold.
I feel wealthier already. I think I'll go out and buy me a new house and car...financed of course. That wealth effect has me feelllliiinnng good!
I'm in for the election ramp. Then they're susposed to start killing arabs again. That's always good for a few 100 more.
By then it will be world central bank circle jerk time and into 2013. People will be starving everywhere.
Is this essentally an open ended QE? Are we at QE infinity here? It would appear the answer is yes.
This is as close as a sign that we are re-living early 2008 as one can get.
im a novice? can you explain why?
thank you Tylers for your vigilence.
phenomenol. I've moved to trading grains as the equity game is just too obviously rigged. good luck
The Fed, Caffeine, AC/DC, discount window access, and a T1 connection. What else does one need?
/sarc
Bath salts, crystal meth, a machete, and an oxy-acetylene torch.
Now is the time to sell. Got the guts??
I have nothing to sell.
IBD readers will be buying many cup-and-handle breakouts today on the IBD 100.
Lots of technical triggers being tripped today. Trying to spook the herd into buying.
That was actually last week. Now we're just overbought on anemic volume. Actually, it's worse than that - At 10:50 I can hardly see a daily or a weekly volume bar on SPY.
"for the first time after nearly 4 years, the Fed conducted a regular (not reverse) repo last Friday."
Isn't that just a smidgen misleading, given the multi-trillion in permanent injections that happened over those same 4 years?
those were outright purchases, not repos.
This wouldn't be as painful if only the fucking MSM were truthful about why we're at 1400. I'm fucking sick of these assholes talking recovery and other propaganda bullshit.
Thank God for ZH...really! Tyler, you guys are a pine tree air freshener in a room full of piled shit.
Yeah... but those morons are making money and I don't...
perhaps you're injecting logic, facts and truth into your "investing" decisions?
The "morons" certainly aren't...
The "morons" certainly aren't...
Well Actually
Why The Stock Market Keeps Shrugging Off Bad News
"Why is this? Is the stock market irrational? If so, it is being paid to be irrational.
What is happening can be summarized in one cliche: Don't fight the Fed. Since 2007, the Fed has: cut the overnight rate from 5.5% to near zero; grown its balance sheet from $800B to $2.7T; and driven down 10-year Treasury yields from 4.6% to 1.6%. (For comparison with equities, the Fed has bid up the PE ratio for Treasuries from 22 to 63, not exactly "value" territory for a security whose earnings can't go up.)
The Fed has systematically banged fixed income yields down to levels not seen in 50 years. The Fed is charging investors for holding bonds and paying them to hold stocks."
in full
http://seekingalpha.com/article/786021-why-the-stock-market-keeps-shrugging-off-bad-news
best post of the day.. thats exactly what makes me puke!! Fuck CNBC and those lying hoe bags. Im so sick of their act!! and yes so many thanks to Tyler. and all the posters to. A total breath of fresh every day in the people's republic of china,, oops i mean amerika.
ok now i'll buy some tvix..been waithing for the spx to get back above 1400..lol
I need a bailout and a tarp and a QE on my puts....
Savers are robbed at gunpoint.
"Ben Bernanke, chairman of the Federal Reserve Board, is intentionally destroying the savings class via inflation while allowing banks to offer dividends to their stock holders. This is unconscionable. Any real President would have taken bold action to put an immediate stop to this." -- Bill Sardi, July 19, 2012
And, there will no "real president" elected in November 2012. Then, it will be "same old shit, eaten on same old day".
Isn't this tantamount to Stealth QE cause regular QE would just cause a politicaly charged shit storm right now? OK let me get this straight, so he is taking the FED's runoff of liquidity on securities it already holds and transferring it to the banks to give them a new heroin injection, basically cash for trash all over again a la 2008. Only this time he is buying the extremely overpriced US treasury paper that has a negative return when you account for inflation. That begs the question, where do the so called "profits" minus the dividend to the owners of the FED go? Is this not cutting into the return to the US Treasury somehow? Or has the Fed finally just said fuck the charter and the law, We ARE the law....and we will do whatever we want. My God this is fucking insanity!!!! Accounting just doesn't matter any more now does it? I guess I should just start paying whatever I wanna pay for my monthly bills as well.
Seems like the Fed is probably feeling real good about themselves now, stage is set for more destructive capital misallocation, but that can be for the next guy to worry about...
- TOMO is back, repaid in days but so what, the idea is to act as a catalyst for the lemons to follow, really helpful at key levels to get the msm tools working (S&P1400, Naz 3K...wow buy 1 get 1 sale for the Fed!)
- Germany is slowing and the holdouts to printfest and mass buying of the banks garbage are down to almost none now. Looking very, very likely to be when, not if, the ECB just totally abandons any alleged mandate for price stability
- See how over time the "discussion" has eroded to the point where now the public discourse is not on the pro's and con's of some amount of further QE, but on whether QE should be "endless and unlimited" or "restricted" to some measly hundreds of billions
They haven't even starting trying to "silverize" the oil market yet...just think of the "benefits" that can be achieved by fixing that market in the eyes of the Fed. They did float a nice trial balloon to the FT though on the CFTC alleged lack of evidence of manipulation. When they start to rig the oil market, that would be the sign to me that they are really worried, cuz a lot of complications there!
It has almost reached where it was on Nov 26, 1999.
WTF 600 million is less than a drop in the barrel. Almost as cheap as talk.
True--when I saw the print 'million' I initially wondered if it was a typo, but consider the momentum: this 2nd repo is three times larger with half the duration of the last one. At this pace...
"Houston, we have [New QE] lift-off."
You may be right. God help us.
She said size doesn't matter. It's your intent that counts. Marry her and she'll love you long time.
Robots push the ES through resistance during the middle of the night. Robots keep the ES/entire stock market hung like a stuck pig all throughout the trading day on no volume. Rinse. Wash. Repeat.
I am getting so reamed by all this moral hazard I have stopped taking checks for rent and now my tenants pay cash. I have lost 50% shorting the SnP which should be struggle to get above 1100 all things being equal but, continually gets jacked up by the new money created by the FRBNY. I am at a loss. I know the minute I cover this market will do a 1932 on me.
I appreciate your candor. Personally I have been recently selling my inverse ETFs because I have drawn a line in the sand that I simply cannot afford to cross.
There SHOULD be a point at which, if everyone has jumped into the market as a bull, there will be nobody left to buy anything from those who are selling. At that point the market should dive as there will be no more buyers. What that point is I do not know.
However, if the Fed that becomes the only remaining buyer, however indirectly, then maybe the market will never take a dive.
Nothing but unadaulterated wealth destruction of the many for the gambling habits of the few.
and for some unknown reason, ForexPro charts are delayed with 2 minutes again
is it just my impression, or does this coincide with ramping through key resistance levels?
http://www.youtube.com/watch?v=c3I2wspHr14
just like last year!
er... last week!
but these repos make the euro strrrrong!
and bridge sales? their earning are plummeting, but they are outperforming pornographically, too, BiCheZ! L0L!!!
He can't push too hard, otherwise he or the FED (edited for clarity) will need to buy shorts.. actually just short (edited for stupidity) to flush himself out to continue the rally!
Edit 2 - My joke was that the FED is starting a short position and getting others involved to begin a market rally. Then covering early before crushing the rest. Actually sounds real.
Is this not just a stealth way for the Fed to buy Equities? More specifically in this case, a way for the banks to "sell" stock positions directly to the Fed without said sale having a negative impact on the markets.
Starts to look like the short squeeze are ending...
I just added a few more... let's see if my ass is going to be toats completly or not...
Don't say the rally is already over
L0L!!! he typo'd the toast b/c he couldn't get to "burnt waffle"
but he's right, imo
the R2K is still shy of 800 and is now broadly in non-confirmation with the blue-chips, so the selectivity of stocks and sectors for index pop is waning, as is the incremental bonerism to the DAX
they whacked the long bond down past 148.5 to pull this off and the damage to the FX side INO.com Markets - Chart for U.S $ INDEX (NYBOT:DX) is not overwhelming
so the bond "dump" = blue-chip "pump"
juanMotime
and daBoyz are back in town till angela returns and sledgehammers the fuking punch-bowl (if she dares to point to the emperor's drooping & dripping manhood at this fiatsco of fungible fungii now sprouting from the zombies' ears and eyes)
Thin Lizzy 2 the rescue...
~~~
http://www.youtube.com/watch?v=quyB8PMTD3o
Once they get the Romulan all suited up they will let the market shit all over itself. Out goes Odumber and in comes new puppet. The kiddies are getting bored and he has implemented all of the needed adjustments to control the sheep. NDAA, and re upping the PA for another round. Mr Plastic can oversee the next round of raping and the republicans and democrats can switch sides on the bailouts and printing. The markets are political weapons and prisms to be used to bend light.
when does angela return to hoZe down these hoZehead banksters?
I have an idea to raise the markets. How bout growing earnings.
Repo: I sell you a bag of chips for $5 Million and pledge to buy it back in the specified future for $5.25 Million.
The stock market is all that's left to keep Banks, Insurance Companies, Pension Funds, the FED, and Treasury, from going BK. It has to keep going up no matter what in their minds or else. Their only hope is to draw the savers cash into the game because right now, they're just shuffling around their own and FED money. For every dollar profit, someone has to lose that dollar in a normal market. The FED is hell bent on supplying those dollars waiting for the savers to think that this is the only way to survive. When that happens though, guess who's going to crash it all? Then it will be the savers fault for investing knowing they could lose their money. I'm not doing it. I'll keep my gold, silver, and cash. Am I losing? Yes I am, but I think I'll be better off when the house of cards tumble down. I still kick my ass for not buying 100k shares of Ford @ 2 bucks a share back in the crash and then selling @ 14 bucks a year later. Yup, I was an old fool for that one, but my other old fool friends thought I was pretty smart when I got out of stocks in 2007 when they lost up to 50% of their assets. I'm staying out unless it really crashes again. Just an old fool's opinion, good luck to all.
Congressman Louis T. McFadden said the following during a speech before Congress on June 10, 1932 during the time of the Fed-manufactured Great Depresssion:
"Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve banks. The Federal Reserve Board, a government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal Reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.
Some people think the Federal Reserve banks are United States Government institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislation; and there are those who maintain an international propaganda for the purpose of deceiving us and wheedling us into the granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime."
+ 1,000
This is all starting to remind me of musical chairs and the song is just about......
Is there some point at which the FED wakes up and realizes what it is doing is Criminal?
A purchased and complicit Congress is at the core of this monstrous crime. On December 22, 1913, the day before President Woodrow Wilson signed the Federal Reserve Act, Congressman Charles A. Lindberg Sr. (father of the famous aviator) said to the House:
"This Act establishes the most gigantic trust** on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized. The people may not know it immediately, but the day of reckoning is only a few years removed. The trusts** will soon realize that they have gone too far even for their own good. The people must make a declaration of independence to relieve themselves from the Monetary Power. This they will be able to do by taking control of Congress. Wall Streeters could not cheat us if you Senators and Representatives did not make a humbug of Congress... The greatest crime of Congress is its currency system. The worst legislative crime of the ages is perpetrated by this banking bill. The caucus and the party bosses have again operated and prevented the people from getting the benefit of their own government."
[** At that time the word "trust" was synonymous with "monopoly."]
The days of reckoning is here; the money trust has gone too far and has panicked; their monetary “system” is collapsing and is in desperation mode.
sociopathic personalities can care less about anyone other than themselves. Dream on if you think these criminals care. They know there are no negative concequences. Obama is sitting around with his pre election stogie right now laughing his ass off . Of course Romeny is too stupid to point the obvious manipulation
No, sociopathic personalities can NOT care less about anyone other than themselves.
They can NOT care less!
By saying that "they can care less", you are implicitly stating that they DO in fact care.
Think about what you are saying.
wen i wuz lidel my perents lernd me gud inglesh,
There's one exception to that rule, and that exception applies to those that have two passports.
What he's trying to say is that the proper expression is "couldn't care less". He just really likes typing.
I will never understand how the demise of people (Greece, Spain, Italy ...) and the destruction of a currency makes companies halfway around the world more valuable.
How can the value of companies like homedepot or CVS depend on the ECB???
Since when do companies have anything to do with the market anymore? They are just a ticker symbol used by TPTB to keep the market casino churning. Years ago, you bought a share in a company as an investment in hopes of that company growing, paying increasing dividends, and appreciating stock price based on performance. Now you can't because the "market" can wipe you out regardless how good the company is.
Quote of the New Century! Ah, the cohesive power of the bankers to destroy the markets...and soon, themselves.
The market is staggeringly overbought. 70% of stocks are above the 50-day MA and 60% above the 200-day MA.
so the dollar shitting the bed is bullish? hmm interesting.
$500 million
$500 billion.
Potatoe.
Tomato.
I'ts all the same thing these days,makes no difference.
Potato
Tomato
Tobacco
Hot Pepper
Jimsonweed
Eggplant
Nightshade
It's all Solanaceae these days...
Talk about inflation, 600 million doesn't go as far as it used to. Not even 100 points on the DOW. I wonder what the markets, and especially the Bank(sters) would have done with out it. Oh well, Bumanke will have to wire another 600 billion tomorrow.
600 million doesn't go as far as it used to.
Priceless!!