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Fed QE September 30- October 1

This is a syndicated repost courtesy of NY Fed | Treasury Securities Operations. To view original, click here. Reposted with permission.

Straight from the bowels of the NY Fed, in the name of Jaysus, Church of Fed, Praise the Load!

$6.001B CouponPurchase 2020-09-30 NYFed treasury securities operations

In fulfillment of the Load’s promise to buy $80 billion a month in Treasuries and another $80-100 billion  a month in MBS, straight from the Primary Dealer straw middlemen.

Another $1.75 billion in Treasuries on the docket for today. The MBS purchases are also ongoing on a nearly daily basis, but the Fed only settles them in the third week of every month. The dealers get a huge wad of cash payments from the Fed that week, which is why the markets usually pop a woody that week.  So watch out, bears! This month, that starts October 14.

Always remember! There’s only one way that the Fed gets QE into the system. That’s via the checking/trading accounts of the Primary Dealers at the Fed. The Fed pays them. It’s then their money to play with as they please. Dealers will be dealers. They’ll buy stuff, market the crap out of it, mark it up, and move it out. Next week, more cash from the Fed, lather rinse repeat.

Nice work if you can get it.

I’ll be posting an in depth update on the QE impact outlook, and the other stuff that affects it, later today. For now, here’s the latest. It remains highly pertinent.

Mr. Minuschin’s Erection To Boost The Election

We have known for a couple of months that there would be a mountain of Treasury supply hitting the market at the end of September. We also knew that Fed QE would be far from adequate to absorb this supply. So I have expected something bearish for stocks at the end of September. This could spill over into the first week of October.

But then things get hairy for bears, with potentially happy days for bulls. Unfortunately, we have a little problem this week. There’s no visibility. We don’t know what they have planned for the next couple weeks. That’s different from usual, where we can usually see ahead for a week or two because we know the Fed’s QE schedule, and also pretty much know how much Treasury supply to expect.

Now, thanks to the exigencies of the past pandemiconomic US Treasury fund raising back in March and April, we don’t have that luxury on Treasury supply, which forces us to surmise some things.

Here they are.

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Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

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. 

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