To: Wyätt Gwyön who wrote (26402 ) 2/14/2005 11:22:51 AM From: russwinter Read Replies (1) | Respond to Incredible analysis, Alder even uses a "feedometer" (Feed Me Seymour!). Don't know how long he supplies this to non-subscribers, but I'd suggest just tracking this for now, as I might as well take a break from it. Look at how much the Boyz asked for (Total Propositions Submitted) in today's temp repo, ny.frb.org wallstreetexaminer.com wallstreetexaminer.com Up next, $5 billion in 3 day CMBs auctioned Wednesday settle on Monday. The Fed's Primary dealers are going to have to come up with that, and then another $35 billion next week for the settlement of the balance of the 3,5, and 10 year note auctions. Will Easy Al step up to the plate again? Clearly the primary dealers are finally facing the reality of having to pay for the new paper. If Greenspan sent no signal that he'd finance, then we will see more liquidation ahead. Since we can't call the Fed and ask them, well, we can, but they won't tell, we'll let the market tell. If it weakens again later today, then it isn't expecting much help in getting the cash to pay for the new notes. And what about that 6 day repo? Will Al refund it next week, after all the notes and bills are safely put to bed. That has been his pattern in the recent past. Until today, the Fed had been shrinking its asset base for five weeks. The head and shoulders pattern that might portend something larger than just a normal seasonal drawdown broke down, but if this rebound continues, that breakdown will be negated. Prior to this, the Fed had been talking tight, but not acting that way. Then for several weeks they were matching words with actions. Today they reverted to the same old, same old, when in doubt, pump pump pump. We expected some bounce as the Fed almost always helps grease the skids for payment of big Treasury issues. The tale remains to be told whether this is just a bounce, or whether there will be more to come. Without substantial monetization by the Fed, and a big increase in buying by foreign central banks, this puts pressure on all markets, especially between now and February 14. After the quarterly refunding, there's still an estimated $44 billion in new Treasury financing projected to come over the rest of February. If the Fed doesn't do some heavy monetizing, the market will get a bad case of indigestion. Greenspan and Co. did some heavy lifting on Thursday. It remains to be seen whether they will follow through.
