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August 28, 2009



Right RP! Hence, the "tremendous trading gains." Don't forget the nice carry with COF near zero.


"Fed is essentially monetizing our exploding debt through its Treasury and MBS purchases (I include MBS purchases in that sentence because the Fed is using its MBS purchase program to, at least in part, soak up the duration that hits the market every time Treasury pushes out its monthly $200 billion of supply) by creating money out of thin air."

Eric, that is the joke. The punch line is that BDs are gobbling down that debt because they know the Fed is going to come around hit their offer a few ticks higher. They've found a way to scalp us when the Fed creates inflation.

Finance (pronounced 'finanz') is funny!


ah, the highest praise! I can just see him now doing his version of the Fed printing press. Of course if he read Newmark's piece on enshrining Hank Paulson as a national hero a few months back, Mr. Pennino would have had a stroke and would have therefore, missed this piece!

Bruce Weinstein

You really do need to get in touch with Mr. Pennino. He would be very proud of you indeed. "...Fed's unknown toxic asset collateral that it has taken in from unknown banks at a unknown size and at a unknown rate..." I could actually picture myself sitting in class listening to him ranting your words.

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