The told me if I voted for McCain, the government would be bailing out their Wall Street buddies.
And they were right!
http://www.zerohedge.com/article/guest-post-how-ny-fed-gifted-extra-157-million-wall-street-yesterdayAs part of the Federal Reserve's ongoing QE2 program, nearly each day, the NY Fed purchases US Treasury securities from a select group of primary dealers in what is called a permanent open market operation (POMO). Ordinarily, the auction begins at 10:16 am and ends at 11:00 am Eastern. While the exact mechanics of the operations are not public, the NY Times published an article about the team that manages them here, divulging a few details, which we subsequently analyzed here.
Only minutes before [yesterday]'s auction was scheduled to complete (while most, if not all, offers from the primarily dealers were presumably in), the European Union’s energy commissioner warned of ‘further catastrophic events’ at Japan’s stricken nuclear power plant. Shortly thereafter, the NY Fed cancelled the POMO--to our knowledge, an unprecedented act. According to Tyler Durden of Zero Hedge, Reuters reported the cancellation at 10:57 or 10:58 am.
In the minutes that followed, equities and other risk markets tumbled, while the very 5 and 7 Year Treasury Notes the Fed would end up buying surged in price over 50 bps (0.50%). At 11:24 am, after prices had settled a bit (though were still materially higher than before), the NY Fed restarted the POMO, which finally closed at 12:04 pm. It would end up purchasing a total of $6.580 billion in Treasury securities (reported at par), with a heavy concentration in the 5 Year tenor at $5.089 billion (of which $3.209 billion had been issued by the Treasury in the last two months).
Basically, the Fed stopped the auction when the price of Treasuries was low, and restarted it when Treasuries were higher, so we bought our own Treasuries from Wall Street dealers for a higher price than we would have earlier that morning.
Merry Christimas to Wall Street!
This is getting f'in insane. It's beyond surreal.
