When the Fed first dropped its biggest Stupid Bomb in history announcing that it would offer a cool trillion a week in term repos, I warned that it was the wrong medicine for the wrong disease and that there would be few takers.
Little did I suspect.
The NY Fed just dropped this into the news slurry.
In accordance with the most recent FOMC directive, the Open Market Trading Desk at the Federal Reserve Bank of New York will conduct an additional overnight repurchase agreement operation for same-day settlement today from 1:30 PM ET to 1:45 PM ET.
BIG EFF’N DEAL!
Do you know how much the Dealers took of the morning half trillion operation for one month paper? $18 billon. $18 stinking billion out of $500 billion. That’s 3.6% of the offering. Are they nuts? Are they stupid? Are they clueless? Are they delusional? Yes, yes, yes and yes.
The Fed has no idea what it’s doing. It cause the problem with 11 years of constantly increasing leverage and moral hazard.
Now there is NO WAY OUT. NO WAY OUT. The Fed, ECB, BoJ, and PBoC, have the world corner. The House of Debt is crumbling. More debt will not cure the problem.
