Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Treasuries, against $94 billion in expirations, increasing total TOMO repos outstanding to $245 billion.

So the Fed has done $415 billion in QE since it started Not QE. The Treasury has issued $517 billion in net new paper since that fateful day.

Fed Says Not QE but Really Is

Powell says it’s Not QE with a straight face. Just another garden-variety, lying, sociopath central banker.

The Fed is buying outright, or lending the Primary Dealers the money to buy 80% of all new Treasury issuance. If that ain’t monetizing the debt, then I’m not in Lisbon.

Apparently, I am.

And If that ain’t QE, then my name ain’t Lee.

It is, therefore I am.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

  1 comment for “Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

  1. s0mebody
    December 9, 2019 at 10:40 am

    Lee, I think you have the best explanation for why Not QE started and why it continues. Everyone else seems to think it is because some banks were blowing up, or possibly the CLO market, but I think you have it right that primary dealers are stuffed to the gills with treasuries. I’d like to see your viewpoint more widely disseminated. Keep up the good work.

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