Friday, October 22, 2010

POMO Disappointment

The POMO front running traders were disappointed this morning as the Fed only bought 10% of what was offered from the primary dealers versus the average 20-30% we have seen in recent POMO's:

"Operation Date: 10/22/2010

Operation Type: Outright Coupon Purchase

Release Time: 10:15 AM

Close Time: 11:00 AM

Settlement Date: 10/25/2010

Maturity/Call Date Range: 04/15/2013 - 09/30/2014

Total Par Amt Accepted (mlns) : $2,490

Total Par Amt Submitted (mlns) : $24,808"

My Take:

As a result, the banks only got $2.49 billion in gambling money from the Fed.  Without the NY Fed's "juice" there are few bids for stocks or anything else.

It's a sad day in this country when our government decides what direction all asset classes trade instead of the free markets.

I don't see why anyone would want to be involved in such a cesspool. 

Expect a giant nothing burger today, and I expect that we close flat to lower by the end of the session barring any news.

After a wild week I think you would have more fun doing this today:

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