I've been known to speculate on macro fundamentals, and the work I have done has made me a diligent and successful investor. Anyone that can help me out here I would be indebted.

You know that I have been right in many different aspects of monetary policy, the change in "mark to market", the importance of the Geithner plan etc. Anyone can read the posts. Here's what I am going to speculate on. I have also stated that the FED is holding back on the powder they have and it's curious to me, unless they are holding back for a reason.

Here is the reason... Come next month and the timing I don't understand exactly, but there are going to be bids associated with the Public/Private partnership entity that are going to be accepted in which the biggest fixed income institutions in the world will come forward to be buyers of bank toxic assets. This activity will coincide with the FED either standing by or being very active in the fixed income markets, to support these institutions or to be actual active investors along with these institutions.

The FED has been buying Treasuries in dribs and drabs, but as far as I know they have been conspicuously absent in the collateralized mortgage market where they indicated they would be buyers up to $750 million.

My speculation is this; that the FED will be a major purchaser along with the winning bidders in order to sop up the toxic assets, firm up the fixed income markets for these and other more risky investments. All of this activity will bring mortgage rates down, recapitalize the banks at the time that will benefit the different secondary offerings, and allow the bidding institutions to profit substantially.

Conclusion: I have speculated that some sort of catalyst is necessary to panic the "safe haven" trade so that fixed income investors are willing to be less risk averse while at the same time further capitalize the banking system, increase the value of the banks asset base and allow the banks to rid their balance sheets of toxic assets and spur on the economy with lower interest rates on a sustained basis where individuals will be able to refinance which will be the foundation for a sustainable economic recovery... in which PCN and PTY are particualy attractive.

Anyone that can tell me what the FED action has been in purchasing collateralized mortgages and gov't debt would be greatly appreciated. I will be looking on the FED's website as well...