The Federal Reserve Bank of New York closed its ninth auction from its Maiden Lane II portfolio yesterday to average market participation, selling around half of the $3.8 billion it listed at the beginning of the week.
According to market reports, 36% of the assets listed were subprime and not much of it traded.
According to a trader's note from the Royal Bank of Scotland, there was interest in buying paper from a variety of accounts after the list, presumably from people who want to add, but bid to steal. "We bought a bunch of bonds, sold about 1/2 direct to customers, some we bought, and we have already re-traded some of our buys ," said analysts in the note. "I f CMBX and equities hold in (seems dubious today, but profits and cash are at all-time highs), we will see more paper leave the street today."
