When does this bull market end?

Cheap liquidity is good for equities. It lowers wacc.

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Through the primary dealers.

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This is what I have suspected however could never prove. It makes logical sense that the primary dealers deposits are increasing through QE which in turn allow them to "make money" off those deposits. Part of those investments are going into equities I can only assume. It might not be an overt objective, however an objective and/or directive from the Fed to create the "wealth effect".

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Look at the daily POMO release and then time it to hourly market charts and you will see a trend.

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Could you please provide a link to these charts? I would love to see them.

TIA

Since you asked...I posted this in the commodities thread on Friday.

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POMO added 6.6 billion today. Going to be a good day. We off to the races again. Risk on. quote: Operation Date: 05/06/2011 Operation Type: Outright Coupon Purchase Release Time: 10:15 AM Close Time: 11:00 AM Settlement Date: 05/09/2011 Maturity/Call Date Range: 11/15/2013 - 04/30/2015 Total Par Amt Accepted (mlns) : $6,676 Total Par Amt Submitted (mlns) : $30,961 POMO

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11:00 am eastern settlement close.

This is just the dow hourly on Friday. Look at the chart between 10:45 and before 11:30.

LINK

What happened friday was the greek news spooked the market, and you can look at the daily and see where the Der Speigel article became known.

Hey it's not scientific and not foolproof, but I have been watching this for a long time. On thurs afternoon money came out of the T Bills and into stocks near the close. There was a ramp on the open. I watch the IRX to see where the money moves are.

The bond and FX markets are the most liquid markets in the world. I just like to watch it.

But we didn't have 10% unemployment when the DJIA was at 14k.

I've read you post several times that money has come out of t-bills and gone into stocks in the same afternoon. But the cash settlement process for any treasury security sale is T+1, meaning trade date plus one day. How are you accounting for that process and it's effect on the stock market on the same afternoon?

Stop trying, its futile.

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Could you please provide a link to these charts? I would love to see them.

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www.newyorkfed.org

Click on Open Market Operations and then Permanent. It will show you the CUSIPs on the treasuries being bought back. If you want to find out the dates of issues of those treasuries go to www.treasurydirect.gov. You'll see most of the on-the-run issuances are monetized one way or another. 4 times in the past 3 months we've had over 50% of the primary dealer takedown in the most recent on the run issuances bought back.

I've got to disagree with the poster that said there is an obvious relation in hourly charts. I've kept my own spreadsheet of the POMO operations since QE2 started and I've yet to find days that have statistical significance. I 100% believe the primary dealers are pumping up the equity markets, but I think they are too smart to make direct buys immediately after the POMO operations. I also believe the Fed, Treasury, and Primary Dealers have an implicit guarantee between them on this but this is more of my tin-foil hat theory.

Man I don't care what you write about, I just like quality discussion. I find it odd to make statements like "Look at this chart, it shows X," and then when someone questions the validity of that inference, you basically cop out with a "its not scientific, I'm just watching the charts." I just don't see the reason in continually harping on a point ("watching the charts") which is self-admittedly misleading and/or outright incorrect.

At least he recognizes his weaknesses.

I don't want to scare this guy away, he seems legitimately interested, not just a flamer.