http://www.federalreserve.gov/pubs/bulletin/1997/199711lead.pdf

I can barely understand the use of the open market operations in conjunction with the discount window to control reserve quantity OR federal funds rate.

It looks like issuing or redeeming federal securities is the OMO mechanism, with some callable and almost all of the POMOs not callable (almost because I saw a “C” on one list). So I don’t see where the alleged link between S&P purchases/PPT activities and OMO would lie.

Anybody willing to take a stab at explaining this alleged link to me?

that’s a significant example of why good Gold Dealers are worthwhile associates..LSS: their Markets are contra to the “Paper Is, it really Is, Money/ Buy MutFunds for the Looong Terrm-Crowd”

Transor,

I hadn’t read the book, though not surprised re: Skinner–many of those Psyche-ologists should have been on a Professional’s Couch, rather than Professing..

this: Can you open the Excel file from this link? http://www.ny.frb.org/markets/pomo/display/template/dspToExcel.cfm though, is really funny. Reminded me of the stunts we used to pull in CompSci–Hey, my drive can’t read this disk–Could you see if it’ll boot in your ‘pute?

One of the big POMO dates was Tuesday, 4/14/2009.

DL, you’ll appreciate this. At 3:44 pm on that day you wrote “PPT is slacking off today.” :)

http://www.ritholtz.com/blog/2009/04/spx-earnings-changes/#comment-162181

However, the following day, Wednesday April 15, we have this:

call me ahab Says:
April 15th, 2009 at 4:01 pm

what was the last hour rally all about? People want in on tomorrows earnings reports?

http://www.ritholtz.com/blog/2009/04/say-hello-to-frannie/#comment-162392

Hmm… spooky!

I’m going to take the liberty of posting what you referred to. More evidence of a PPT. I’m not entirely dismissive of a PPT, provided that their objective is very short term in nature. The question is, when is the “PPT” going to stop “pumping” and start “dumping”.
…………………….

“There has been a distinct spike in POMO activity as of late. Direct Intervention to manipulate a variety of markets appears to be accomplished primarily via two vehicles: “Repo” Injections from The Fed, and via the Over The Counter (OTC) Derivatives reported by The Bank for International Settlements. The Fed makes injections of Repos (Repurchase Agreements – - usually TOMOs – - Temporary Open Market Operations typically expiring in 1 to 30 days) into the market nearly every business day. In recent months TOMO operations have dried up as the Fed found more covert avenues to inject liquidity to be used for market manipulations.

Repurchase agreements are loans (at Fed Fund rates) issued daily by the Federal Reserve to Primary Dealers, the proceeds of which can be used to buy, for example, Dow index futures, if the Fed seeks to boost the Dow. The total amount of un-expired Repos on any given day constitutes the “Repo Pool.” Monitoring daily changes in Repo Poll levels (which is publicly available information) is crucial to determining how the Interventions will likely affect the markets.

Thus, the several Primary Dealers (e.g. Goldman Sachs, JPM. Citibank), who work under the Fed’s direction, are able to use these loaned funds to buy or sell various securities and futures to affect the markets. Now get this: One species of Repos, POMOS (Permanent Open Market Operations), never has to be repaid, which is extremely significant. The fact that the loaned funds can be used to purchase Derivatives (as well as plain equities) gives the manipulators the tremendous leverage which derivatives afford”

After wading through that several times, I tried the article. I am left wondering if cutbacks at the WSJ have left the janitors in charge of the editing room. Really crappy writing.

Interesting that at the NY Fed link POMOs are authorized “to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC).”

As a non-trader never would have occurred to me that such an animal existed, not in a million years. Interesting — did a search for the exact wording of the POMO explanation and only got 13 hits on the whole Web.

Can you open the Excel file from this link? http://www.ny.frb.org/markets/pomo/display/template/dspToExcel.cfm

If this is allowed to happen, then it will make us different from Japan. I never see it mentioned, but Japan’s biggest issue and the reason for the banks being left as zombies, was due to the banks and business being so intertwined. Equity ownerships went both ways for banks and business, then the loans.