The Fed has undertaken so many rescue programs since Friday that my head is spinning. It’s hard to keep track of it all. A schedule…
With no prior announcement or clue, the Fed bought $37 billion in Treasury coupons from Primary Dealers on Friday. To pay for them it deposited $37 billion into dealer accounts at the Fed.
It was the largest single day POMO (Permanent Open Market Operation) purchase since the days of TARP and QE 1 in 2009.
It came without warning. I was so glued to the intraday live charts on Friday, I wasn’t even aware that the Fed had taken this emergency action until after the close.
We sure as hell saw the result. But this is only the beginning of this story.
Investors and leveraged speculators took the coronavirus panic straight to the bond market last week. Dealers, bless their little hearts, were long up the wazoo. Talk about smellin like a rose.
But somebody was short. Big somebodies. They’re dead. We don’t know where the bodies are buried yet, but the Fed will need to exhume them and fill the graves.
The market got way ahead of the amount of cash that the Fed was pumping into dealer accounts in February. That took a toll, and…
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It ain’t rocket science. The Fed drives liquidity and stock prices are the first order effect because that’s how monetary policy transmission is designed.
The Fed has monetized 99% of the Federal Debt since it started Not QE. That’s been bullish. Here’s what to look for and how to…
There are growing signs in the banking system that the Fed will lose control, and this won’t end well.
The Fed can never leave QE. Here’s why, and what it means for you.