Ares
30th November 2010, 09:12 AM
Of Bonds Issued Last Week.
Today's POMO has closed, with Brian Sack monetizing $6.8 billion of bond. This is a 3.5x Submitted to Accepted ratio as PDs realize various blogs are on their POMO funding needs and thus moderate their Submission amount. Yet what is simply surreal is that the second most monetized bond was PJ3, due 11/30/2015. (http://www.treasurydirect.gov/instit/annceresult/press/preanre/2010/R_20101123_2.pdf) This is the same issue that was just auctioned off by the Treasury last week! There is no longer even a pretense of avoiding direct monetization. It is time for Bernanke to go out and just buy bonds at auction. A one week turnaround is nothing less than criminal fraud which if anything is unnecessary and pads the PDs pockets. The result was so stunning it was not even included in last week's frontrunning guide as nobody had a clue that the Fed could be so brazen in its flaunting of direct monetization. For just holding the bond a whopping 168 hours, PDs made a few million dollars. This is criminal. But who cares. Eric Holder has still to prove that he is anything besides an organ donor.
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/POMO%2011.30_0.jpg"/>
http://www.zerohedge.com/article/68-billion-pomo-closes-brian-sack-monetizes-11-billion-bonds-issued-last-week
Today's POMO has closed, with Brian Sack monetizing $6.8 billion of bond. This is a 3.5x Submitted to Accepted ratio as PDs realize various blogs are on their POMO funding needs and thus moderate their Submission amount. Yet what is simply surreal is that the second most monetized bond was PJ3, due 11/30/2015. (http://www.treasurydirect.gov/instit/annceresult/press/preanre/2010/R_20101123_2.pdf) This is the same issue that was just auctioned off by the Treasury last week! There is no longer even a pretense of avoiding direct monetization. It is time for Bernanke to go out and just buy bonds at auction. A one week turnaround is nothing less than criminal fraud which if anything is unnecessary and pads the PDs pockets. The result was so stunning it was not even included in last week's frontrunning guide as nobody had a clue that the Fed could be so brazen in its flaunting of direct monetization. For just holding the bond a whopping 168 hours, PDs made a few million dollars. This is criminal. But who cares. Eric Holder has still to prove that he is anything besides an organ donor.
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/POMO%2011.30_0.jpg"/>
http://www.zerohedge.com/article/68-billion-pomo-closes-brian-sack-monetizes-11-billion-bonds-issued-last-week