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Wow Fed's Up To Tricks

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http://www.zerohedge.com/article/feds-ust-...-scheme-exposed

The Fed's UST-POMO Pyramid Scheme Exposed

CashDebtFEDFederal Reserve SystemMonetizationprimary dealersTreasuries

In a brilliant piece of investigative reporting, Chris Martenson has uncovered that the Fed, merely a week after issuing $28 billion in 7 year bonds (which Zero Hedge discussed previously) of which $10 billion ended up being purchased by primary dealers, has turned and bought 47% of the primary allocated bonds in Open Market Purchases. This is undisputed monetization removed simply via one primary dealer and less than 5 days of temporal separation in order to leave no easy trace. As Martenson points out:

"A more honest and open approach would have been for the Fed to simply buy them outright at the auction but this way, using "primary dealers" and "POMOs" and all these other extra steps the basic fact that the Fed is openly monetizing US government debt is effectively hidden from a not-too-terribly inquisitive US press and public."

The question is did the Fed implicitly tell the primary dealers they are merely holding the treasuries for a flip, and that it would acquire them immediately. Absent this $4.8 billion in effectively monetized bonds, what would the Bid To Cover have been for the primaries? Would this have been the second practically failed auction for USTs after the deplorable 5 year auction results a day prior?

It is truly a sad state of affairs when the Fed has to manipulate public and media perception in this way, and has to cover up for the complete lack of interest in US Treasuries.

7%20Years%20CM%202_0.jpg

"The speed of the shell game is accelerating.

This immediate repurchase of newly auction bonds by the Fed tells us that demand for these bonds is not nearly as high as advertised, and that things are not quite as strong as represented.

And oh, by the way, don't expect any stock market weakness while so many billions are being shoveled out the Fed and into the pockets of the primary dealers. They'll have to do something with all that freshly minted cash....."

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http://www.zerohedge.com/article/feds-ust-...-scheme-exposed

The Fed's UST-POMO Pyramid Scheme Exposed

CashDebtFEDFederal Reserve SystemMonetizationprimary dealersTreasuries

In a brilliant piece of investigative reporting, Chris Martenson has uncovered that the Fed, merely a week after issuing $28 billion in 7 year bonds (which Zero Hedge discussed previously) of which $10 billion ended up being purchased by primary dealers, has turned and bought 47% of the primary allocated bonds in Open Market Purchases. This is undisputed monetization removed simply via one primary dealer and less than 5 days of temporal separation in order to leave no easy trace. As Martenson points out:

"A more honest and open approach would have been for the Fed to simply buy them outright at the auction but this way, using "primary dealers" and "POMOs" and all these other extra steps the basic fact that the Fed is openly monetizing US government debt is effectively hidden from a not-too-terribly inquisitive US press and public."

The question is did the Fed implicitly tell the primary dealers they are merely holding the treasuries for a flip, and that it would acquire them immediately. Absent this $4.8 billion in effectively monetized bonds, what would the Bid To Cover have been for the primaries? Would this have been the second practically failed auction for USTs after the deplorable 5 year auction results a day prior?

It is truly a sad state of affairs when the Fed has to manipulate public and media perception in this way, and has to cover up for the complete lack of interest in US Treasuries.

7%20Years%20CM%202_0.jpg

"The speed of the shell game is accelerating.

This immediate repurchase of newly auction bonds by the Fed tells us that demand for these bonds is not nearly as high as advertised, and that things are not quite as strong as represented.

And oh, by the way, don't expect any stock market weakness while so many billions are being shoveled out the Fed and into the pockets of the primary dealers. They'll have to do something with all that freshly minted cash....."

I may die of surpise.

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I may die of surpise.

:lol:

It does not surprise me as a tactic but I thought this sort of thing would have come along in a year or 2.

Do you think this is heading to a crack up boom, another thread on Zero hedge has the market catagorised as in a euphoric state atm.

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:lol:

It does not surprise me as a tactic but I thought this sort of thing would have come along in a year or 2.

Do you think this is heading to a crack up boom, another thread on Zero hedge has the market catagorised as in a euphoric state atm.

Do I think thsi is heading for a crack up boom?

Only for about 4 years now.

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Is GOldmans a primary dealer?

Yes.

List of the Primary Government Securities Dealers Reporting to the Government Securities Dealers Statistics Unit of the Federal Reserve Bank

•BNP Paribas Securities Corp.

•Banc of America Securities LLC

•Barclays Capital Inc.

•Cantor Fitzgerald & Co.

•Citigroup Global Markets Inc.

•Credit Suisse Securities (USA) LLC

•Daiwa Securities America Inc.

•Deutsche Bank Securities Inc.

•Goldman, Sachs & Co.

•HSBC Securities (USA) Inc.

•Jefferies & Company, Inc.

•J. P. Morgan Securities Inc.

•Mizuho Securities USA Inc.

•Morgan Stanley & Co. Incorporated

•Nomura Securities International, Inc.

•RBC Capital Markets Corporation

•RBS Securities Inc.

•UBS Securities LLC.

Edited by MOP

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BBC Just now. BoE doesn't know where earlier QE went to.

Hmmm, there is bloated squidy thing in the room.

:blink:

Doesn't know where some of it went?

Or

Doesn't know where all of it went?

:blink:

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Knows, is taking the piss.

It's been poured into the black hole of our zombie banks.

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Guest Daddy Bear
It's been poured into the black hole of our zombie banks.

This is getting more and more hilarious ..

Anyone else lovin it?

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Guest Daddy Bear
Yes, in a very sick and twisted sort of hysterical about to be executed but finding it funny way.

come on its only money......

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Guest Daddy Bear
Sorry, I'm a devout doomster, I am unable to enjoy the pleasures of optimism, it's me religion see.

catholic eh?

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