Today's POMO had two curious characteristics. The first was that the Dealers tried to put a whopping $28.4 billion in 2-3 year bonds back to the Fed, as ever more are doing all they can to offload existing positions. The deluge in reverse tenders resulted in the highest Submitted to Accepted ratio for all of QE2, after the Fed accepted only $3.2 billion for buybacks, bringing the S/A ratio to a whopping 8.9x. This was the highest Submitted to Accepted ratio since April 13, when the Fed monetized $5.01 billion in bonds following dealer tender interest for $42.9 billion, or an 8.6x S/A ratio. Not surprisingly, that POMO was also one focusing on bonds maturing 2012-2013, confirming that the PDs have far too much exposure in the short end. The second curiosity was that of the just auctioned off QZ6 (or the On The Run 2 year) not a single dollar was bought back by Brian Sack's minions. Since the 2 Year rallied substantially since the May 24 auction date, there is something oddly disturbing about this complete lack of action in what has traditionally been the most actively repurchased security. Alas, we have no explanation for part 2, while for part 1 it indicates that following the end of QE2 we may see some very substantial flattening of the curve if and when the dealer community finds itself short of cash in under 3 weeks. And speaking of the end of QE2, below is a chart showing the countdown to D-Day: $8 billion down (in the last POMO schedule), and just $51 billion to go. There are now just 11 POMO days, and 12 total POMO operations, including the double POMO on June 20. What happens next is all priced in according to Blackrock and CNBC.