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

To: Mike Johnston who wrote (92497)	3/19/2008 5:39:22 PM
From: Real Man	Read Replies (1) \| Respond to of 110194

Would like to hear what Bart says, but maybe the Fed needs cash for this: ny.frb.org If the Fed sells part of SOMA securities but does not erase the cash, then no actual drain happens. "The PDCF will provide overnight funding to primary dealers in exchange for a specified range of collateral, including all collateral eligible for tri-party repurchase agreements arranged by the Federal Reserve Bank of New York, as well as all investment-grade corporate securities, municipal securities, mortgage-backed securities and asset-backed securities for which a price is available"

To: Mike Johnston who wrote (92497)	3/19/2008 6:31:46 PM
From: bart13	Read Replies (2) \| Respond to of 110194

I thought that a coupon pass was a permanent purchase of securities, why are they calling a sale of securities a "coupon pass" I think the key is in the 3rd word of the descriptions at ny.frb.org . Tuesday's was a "Outright Coupon Sale" where the one last year on 5/3 was the more normal "Outright Coupon Purchase"... and I got bit by not looking at it on 3/7/2008 when it was a "Outright Bill Sale", and thought it was a real POMO add. <ng> What is going on ? It looks like they give money out in auctions and discount windows, but are draining SOMA. That's pretty much my read too. I think they're actually attempting sterilization of the auction & discount window actions by draining SOMA. I'm trying my best to track the net effects of all the actions (and including the upcoming ~$167 helo drop tax rebate) in my "fed all" actions chart on my Fed watch page and its showing a net disinflationary picture currently... and there's always a time lag for monetary policy to take broad effect. The thin read line is Fed only, the thicker blue line includes primary dealer (GSDS) trading.