Sunday, March 29, 2020

Fed's Cure Risks Being Worse Than the Disease - Trump Socialism, Mal investment

Trump and the Fed are big players.

The Fed is taking over the whole economy.
Banks are bankrupt
Banks have given out loans that cannot be repaid by
bankrupt companies,
bankrupt people,
bankrupt governments,
and bankrupt foreigners.

The Fed is "lender of last resort" as stated in all textbooks.
So the Fed will buy up those loans with printed money and un-printed money electronic accounts.

Bankrupt entities will get trillions.
You may get $1200 if you are lucky.
May have to get more to prevent riots.

All because of a virus that forces social distancing so much less communicable diseases than normal,
and many more babies being born,
and families learning to cook again, sleep more, take care of their own children,…
Blessing in disguise? as I said in 1974 OPEC oil embargo gas lines, no gas.

Obama Bernanke proved that rich 1% banker rulers can get trillion $$$ bailouts
and the sheeple will not protest much or even know what is going on,
if you give the sheeple $10 minimum wage jobs ($20 or $30 if you got a degree)
to pay interest on large growing debts
and buy phones, TV, games, wine, song, drugs,…

Wait to see if
house arrest
constant electronic disinformation
will force sheeple to gladly accept their new rulers rich 1% elites.
Welcome to the new world order.

Trump fighting to keep Hotels, Casinos, Airplanes burning fossil fuels,
to spread disease, multiculturalism, globalism, conspiracies among rich 1% elites around the world…
When they should stop operating.

"A backdoor to socialism"
as I called the 2009 Obama bailout of GM auto industry Government Motors fossil fuel global warming, etc. etc.
Capitalism is designed to let bankrupt ideas go bankrupt,
whereas socialism and communism allow rich corrupt politically connected to keep operating and get richer
while the economy and sheeple suffer.
Will the sheeple just sit there and take it?


From: Lothar

whether the cure of an economic shutdown is worse than the virus.

we need to ask if the cure is worse than the disease seizing financial markets
of the Federal Reserve getting so deeply into
corporate bonds,
asset-backed securities,
commercial paper, and
exchange-traded funds.

the Fed has cut rates by 150 basis points to near zero and run through its entire 2008 crisis handbook.

That wasn't enough to calm markets, though
— so the central bank also announced
$1 trillion a day in repurchase agreements and
unlimited quantitative easing,
which includes a hard-to-understand $625 billion of bond buying a week going forward.

But it's the alphabet soup of new programs that deserve special consideration,
as they could have profound long-term consequences for the functioning of the Fed
and the allocation of capital in financial markets.

Specifically, these are:

CPFF (Commercial Paper Funding Facility) – buying commercial paper from the issuer.

PMCCF (Primary Market Corporate Credit Facility) – buying corporate bonds from the issuer.

TALF (Term Asset-Backed Securities Loan Facility) – funding backstop for asset-backed securities.

SMCCF (Secondary Market Corporate Credit Facility) – buying corporate bonds and bond ETFs in the secondary market.

MSBLP (Main Street Business Lending Program) – Details are to come, but it will lend to eligible small and medium-size businesses, complementing efforts by the Small Business Association.

An argument can be made that can also include municipal securities, but nothing in the laundry list above.

So how can they do this? The Fed will finance a special purpose vehicle (SPV) for each acronym to conduct these operations.

In essence, the Treasury, not the Fed, is buying all these securities and backstopping of loans;
the Fed is acting as banker and providing financing.

In other words,
the federal government is nationalizing large swaths of the financial markets.
The Fed is providing the money to do it.

This scheme essentially merges the Fed and Treasury into one organization.
So, meet your new Fed chairman,
Donald J. Trump.

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