Clear things up: Is the FED buying Equities?
- Thread starter Atikon
- Start date
Well, the worry constant FED intervention causes "moral hazard". That we keep living irresponsibly.
But another issue is who controls the money, the SPV is 75B Treasury money levered by the Fed 10x. It's Trump!
Here is the whole CARES package (An unholy marriage):
The $500 billion (All to be levered 10x by the FED to $5T?!?) from the CARES Act supplements billions in taxpayer money that was already at the Treasury Department's disposal in the Exchange Stabilization Fund.
In recent weeks, the Treasury Department has used taxpayer money from the Exchange Stabilization Fund and from the CARES Act to support several Fed lending facilities for businesses. Specifically:
- Primary Market Corporate Credit Facility: The Fed, through a special-purpose vehicle ("SPV"), will purchase bonds and syndicated loans, at issuance, from corporations rated investment grade as of March 22, 2020. The Treasury is contributing $50 billion (now upped $75 bill unannounced).
- Secondary Market Corporate Credit Facility: The Fed, through a SPV, will purchase corporate debt issued by corporations rated investment-grade as of March 22, 2020, on the secondary market, as well as purchase U.S.-listed ETFs that provide exposure to investment-grade corporate bonds. The Treasury is contributing $25 billion. The Primary and Secondary Market Facilities will provide up to $750 billion in total lending.
- Term Asset-Backed Securities Loan Facility: The Fed, through its SPV, will make loans of up to three years, fully secured by eligible asset-backed securities. The Treasury is contributing $10 billion to support lending of up to $100 billion.
- Money Market Mutual Fund Liquidity Facility: The Fed will lend to U.S. depository institutions, U.S. bank holding companies, or U.S. branches of foreign banks in exchange for collateral that the borrowers purchase from money market mutual funds. The Treasury is contributing $10 billion.
- Commercial Paper Funding Facility: The Fed, through its SPV, will purchase three-month, dollar-denominated commercial paper, included asset-backed commercial paper, that is highly rated and issued by any U.S. issuer. The Treasury is contributing $10 billion.
- Main Street New Loan Facility and Expanded Loan Facility: The Fed, through its SPV, will purchase 95% participation in new and pre-existing four-year loans make by banks and other lenders to businesses with up to 10,000 employees or up to $2.5 billion in annual revenues. The Treasury is contributing $75 billion to support up to $600 billion in lending.
The 'Cares' stimulus is a big rip off, tax payers are financing the frantic transfer of wealth from them, the 99% to the 1%.
The government won't let a panic go by without devising a scheme to loot tax payers. The checks are meant to pacify the public so they don't riot or do another 'occupy'.
https://wallstreetonparade.com/2020...on-in-stimulus-was-outsourced-to-wall-street/
The government won't let a panic go by without devising a scheme to loot tax payers. The checks are meant to pacify the public so they don't riot or do another 'occupy'.
https://wallstreetonparade.com/2020...on-in-stimulus-was-outsourced-to-wall-street/
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I used to thing zero hedge was all bs. But they have many articles that are first to be printed and correct. One was the chineese funeral homes ordering 10's of thousands of urns
Idk about that but they reported pretty acuratley on commodities and cashflows during the Pandemic
Well that is the point tell the truth in 9 stories and for 10th to short the market bs
Otherwise you won’t believe it. That is the catch.
not buying equities. accepting certain equities as collateral.
The fed usually posts all purchases and sales on the internet, sometimes in nearly real time, particularly with Treasuries I have found. I think the Dodd Frank rules require posting within two years.* They typically identify exactly what they bought or sold and how much. So far as I'm aware they have never bought equities. They did act as an intermediary in the purchase of GM stock during the financial crisis. The stock was transferred to the Treasury within 24 hours.
*Significant parts of the Act were repealed in 2017. Don't know if disclosure was affected. The Bernanke fed was especially transparent re bond transactions.
The fed usually posts all purchases and sales on the internet, sometimes in nearly real time, particularly with Treasuries I have found. I think the Dodd Frank rules require posting within two years.* They typically identify exactly what they bought or sold and how much. So far as I'm aware they have never bought equities. They did act as an intermediary in the purchase of GM stock during the financial crisis. The stock was transferred to the Treasury within 24 hours.
*Significant parts of the Act were repealed in 2017. Don't know if disclosure was affected. The Bernanke fed was especially transparent re bond transactions.
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A 3 minute Google search reveals they first reported on this March 29th in an article quoting the March 27th Bloomberg article that appears to be the first US news source to print a story on it. But great job providing us an example of the level of rigor that defines Zero Hedge and it's readers!
