The Fed did another outright purchase of Agency debt on Friday. Its little ploy to get foreign central banks (FCBs) and Primary Dealers off the hook, while leaving widows and orphans as the bagholders yet again, is working. Both PDs and FCBs continued dumping Agency paper at a breakneck pace this week, while the Fed took in only a fraction of that. But the Fed has conned the market into believing that it really is doing something good. So the market took the rest of the paper being distributed (and I won’t say where they took it) at sky high prices, as spreads plunged throughout the week. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.