<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/2a0da254-0348-41c1-8c26-da489c636cbf/071B176F-B2AD-446B-9157-46E0D6949526/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://ftalphaville.ft.com/blog/2009/09/02/69391/fed-purchase-lockdown/" href="http://ftalphaville.ft.com/blog/2009/09/02/69391/fed-purchase-lockdown/" style="font-size: 11px;">ftalphaville.ft.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://ftalphaville.ft.com/blog/2009/09/02/69391/fed-purchase-lockdown/"><P>Nevertheless, there is one issue the market should be wary of. As Zero Hedge <A href="http://www.zerohedge.com/article/56-billion-pomo-completed" target="_blank" title="$5.6 Billion POMO Completed - Zero Hedge">noted</A> on Tuesday,  the Fed’s purchase timeline is quickly running short. Having originally committed to $300bn worth of Treasury purchases, the latest auction on September 1 brings the total sum purchased since March to <A href="http://www.newyorkfed.org/markets/pomo/display/index.cfm" title="Permanent OMOs: Treasury - NY Fed" target="_blank">$276.3bn</A>. This leaves less then $25bn for future auctions. As to what that implies, Zero Hedge commented: <SPAN class="quote"><SPAN>As Zero Hedge discussed before, this total will be used up in the next 2 weeks. What then? All of a sudden the invisible bid under equities is looking very, very precarious.  And here is a graphic representation to either D-Day for equities or to QE 2.0</SPAN></SPAN></P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://ftalphaville.ft.com/blog/2009/09/02/69391/fed-purchase-lockdown/"><P>Here’s that chart:</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://ftalphaville.ft.com/blog/2009/09/02/69391/fed-purchase-lockdown/"><div align="center"><img src="http://content8.clipmarks.com/blog_cache/ftalphaville.ft.com/img/B888BEE6-30C9-4012-98F2-F2B69A96CCE5" alt="Fed Agency purchases - Zero Hedge" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://ftalphaville.ft.com/blog/2009/09/02/69391/fed-purchase-lockdown/"><P>Which seems to suggest that when the Fed QE drip-feed is shutdown come mid-September, no-one can really be sure of how markets will respond. This is all the more the case if you consider how closely correlated the US equity market ‘recovery’ has indeed been to Fed purchases:</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://ftalphaville.ft.com/blog/2009/09/02/69391/fed-purchase-lockdown/"><div align="center"><img src="http://content9.clipmarks.com/blog_cache/ftalphaville.ft.com/img/2F8FD409-1E2A-45E2-ADB5-6A7079F44DD0" alt="DJIA - FT" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://ftalphaville.ft.com/blog/2009/09/02/69391/fed-purchase-lockdown/">will markets be able to cope on their own?</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/071B176F-B2AD-446B-9157-46E0D6949526/blog/" title="blog or email this clip"><img src="http://content6.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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