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 Fed pretended to fire a bazooka on Sunday with its announcement of $700 billion in market intervention in outright purchases. But it was really a popgun. The futures went limit down again when the market opened in Asia last night and have stayed there.
The SPX has broken out of its original crash channel to the downside. It’s in a new channel with a slope of -46 points per day. Long term signals are already extremely negative, and are on the verge of turning catastrophic, cataclysmic, and apocalyptic.
I’ve run out of adjectives.
Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
It’s not working. Show them the money, Jerry.
Bad money after bad.
Lotta good that did, suckas.
Subtract their immense debts and they have negative net worth, and therefore the market value of their stock is zero.To understand why the financial dominoes toppled by the Covid-19 pandemic lead to global insolvency, let’s start with a household examp…
The only thing new in the Fed statement below was the $200 billion in MBS purchases.
