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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (91401)	2/7/2008 11:05:14 PM
From: bart13	Read Replies (1) \| Respond to of 110194

SOMA is the System Open Market Account. ny.frb.org I'm a bit confused and uncertain myself now, and need to find a whole bunch of hours to do research etc. to confirm my suspicions... or learn yet more about the weird way the Fed runs... or both. I have a chart on my nowandfutures.com page that attempts to chart all Fed operations. That may or may not help you... and that chart is just a best effort on my part too. The Fed is not only a complex beast but there are things that are not public too (duh <g>). I believe you're right on the coupon pass (aka POMO), and right on draining SOMA being a "negative" coupon pass, and that the combo is neutral. The Fed can also buy direct from the Treasury as well as via the Primary Dealers (tracked somewhat in GSDS) too. The Fed has said that most of the drains went into the NY Fed trading desk too. And then we have the probable $150 billion or so Congressional helicopter drop, which is not unlike a POMO or coupon pass. And then we have a few other factors that I don't want to bring up until I do some research. In other words, its far from simple or certain what is really going on with money creation... and welcome to the club on living with relative uncertainty. Hope you don't lose as much hair as I have. <g> There are many ways for the Fed to "print" without it showing up in SOMA too. A few years ago, I listed what I knew on "money creation" nowandfutures.com Maybe that will help?