Tuesday, April 7, 2009

The Ultimate Insiders

Here's the latest list from the New York Fed of primary dealers. Primary dealers are the broker-dealers the Fed deals directly with when they buy and sell Treasury securities and otherinstruments such as the new securities that Bernanke has created.

Nobody knows sooner what the Fed is doing and how the markets are trading than these dealers. In fact, it is part of their role to tell the Fed how the markets are trading:

BNP Paribas Securities Corp.
Banc of America Securities LLC
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Securities America Inc.
Deutsche Bank Securities Inc.
Dresdner Kleinwort Securities LLC
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
J. P. Morgan Securities Inc.
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
RBS Securities Inc.
UBS Securities LLC.

According to the Fed, all primary dealers will be expected to (1) make reasonably good markets in their trading relationships with the Fed's trading desk; (2) participate meaningfully in Treasury auctions and; (3) provide the trading desk with market information and analysis that may be useful to the Federal Reserve in the formulation and implementation of monetary policy.

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