Primary Dealers to Fed : "Checklist OK. We are ready for a massive QE3"

As anticipated...

 An operation like QE needs a complex planning to be executed with the less possible risks (speaking for the Wall Street players, primarily).

Here are some of the known steps of the preparatory process, which seem completed now :

• Total Dealer Treasury Holdings At Record High
• It’s no secret that primary  dealer holdings of corporates have been in freefall since last June, falling 53% from their peak. But perhaps more interesting is that in that same period holdings of US Treasuries have increased tremendously

• and the last one : Fed Begins Tri-Party Reverse Repos with expanded counterparties

"In a reverse repo, the Fed lends securities for a set period, temporarily draining cash from the banking system. 

In a tri-party arrangement, a third party functions as the agent for the transaction and holds the security as collateral. JPMorgan Chase and Bank of New York Mellon are the only banks that serve in a trade-clearing capacity in the tri- party repo market."

This will allow a new massive lend of securities by the FED and only 2 banks will be drained of cash. The FED has sub-contracted the new clearing operations (and subsequent margins) to its 2 closest primary dealers.