Run, Not Walk

clipped from www.bloomberg.com Economists see the Fed’s balance sheet ballooning to $4.5 trillion this year, with its announced purchases added to existing lending facilities. That’s trillion with a “t.” And it would be five times the size of the balance sheet in the first eight months of 2008, before the Fed cranked up the printing presses. In the short run, bond traders will capitalize from a price- insensitive buyer waiting in the wings. “They want to buy now, push the price higher, and then sell it at the offered side to the Fed,” Bianco says. Once that’s done, “you want to sell everything you own and run, not walk, away from the market,” he says.