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"
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: