As we speculated earlier in the week, the FRNY has, for the third week in a row, announced on Thursday that the next day (Friday) it will be conducting permanent open market operations on Agency securities (Fannie/Freddie).  The amount of Agency POMO is usually about $1.5B, less than regular POMO.  However, this will make an unprecedented five days in a row (including Monday and Tuesday’s scheduled operations) of liquidity dissemination that can be leveraged 100 times or more in the markets.  With $7.5 B yesterday, $7.00 B today, we could easily see $30 B of leveragable capital hit the markets by Tuesday.  Clearly, the FRNY is coming out with guns blazing and we should have a volatile week into Wednesday’s FOMC Announcement.  If ever there were a time for short term methods, it’s now.