Using 5 Year Note futures as a proxy, we have calculated the difference in average price between what the NY Fed would have paid had it not cancelled the first auction versus what it actually ended up paying: $15.7 million ($12.1 million for the 5's and $3.6 million for the 7's). This amount was simply pocketed by the primary dealers and is now a liability of the Federal Reserve, and putatively the US taxpayer. Zero Hedge tracks the Fed trading fees.
This is a racket, foisted on taxpayers who are not even close to covering the debt costs. It is the Great Religion, again, the Keynesians and their love for undemocratic central power that does us in.
Brad's thinks this kind of crap will save his government job out here in California. His math is wrong.
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