Bankruptcy Foreclosure - Pouting about a Wall.

[David Merrill]

In just these past few weeks, 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. At this rate, the Fed will own two-thirds of the Treasury market in a year.
...

To put it bluntly, the Fed isn’t allowed to do any of this. The central bank is only allowed to purchase or lend against securities that have government guarantee. This includes Treasury securities, agency mortgage-backed securities and the debt issued by Fannie Mae and Freddie Mac. 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. The Treasury, using the Exchange Stabilization Fund, will make an equity investment in each SPV and be in a “first loss” position. What does this mean? 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. The Fed hired BlackRock Inc. to purchase these securities and handle the administration of the SPVs on behalf of the owner, the Treasury.

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

This scheme essentially merges the Fed and Treasury into one organization. So, meet your new Fed chairman, Donald J. Trump.
https://www.bloomberg.com/opinion/ar...e-than-disease

Recently I was impressed with the instantaneous effects of TRUMP and his Executive Order #13910 - about hoarding, based in Title 50 Military and War. That very day I heard about Amazon deliveries being diverted to medical personnel!

Recall how in 2016 I ended the War with Delegation of Authority to the Triumvirate regarding Super Jubilee. Well, in a few weeks TRUMP struck up a new one in the Korean War style, upon the (now removed from the Bankers' CODE) Trading with the Enemy Act - exclusively in the Appendix of Title 50 anymore.

At this rate, the Fed will own two-thirds of the Treasury market in a year.

How could this "Treasury Market" be anything but a Bubble?

Thank you Lorne! That is indeed a remarkable post! This website is invaluable - priceless.