Trump's Fed Now Buying Junk Bonds

[georgephillip]

Within the CARES Act 880 pages there appears to be a $454 billion slush fund designed to kill Wall Street's two main legitimate functions: price discovery and prudent capital allocation.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds.

"Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting.

"The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them."

 

[sparky]

Well they got donny’s keys
And they pushed through a federal plan now
Seems they forgot about the deficits
Like their campaign grandstands now
And with the Fed’s printers blasting
T bills just as fast as they can now

And they'll have fun fun fun
Til donny takes the t-bills away
(Fun fun fun til donny takes the t-bills away)

Well the bankers can’t stand it
Cause everyones gotta hand in their face now
(hand in their face now, hand in their face now)
It makes the last crash seem like a roman chariot race now
(hand in their face now, hand in their face now)
The small biz try and catch it
But they lead ‘em on a wild goose chase now

(a wild goose chase now , a wild goose chase now)



And they'll have fun fun fun
Til donny takes the t-bills away
(Fun fun fun til donny takes the t-bills away)



Well we knew all along
That the Fed prints as fast as they can now
(as fast as they can now, as fast as they can now)
And since they do as they please
Without a thought of our insolvency now
(as fast as they can now, as fast as they can now)

But you can come along and see
All the special interest things that got greased now
(things that got greased now, things that got greased now)


And they'll have fun fun fun
Til donny takes the T-bills away
(Fun fun fun til donny takes the t-bills away)

(Fun fun fun til donny takes the t-bills away)

(Fun fun fun til donny takes the t-bills away)



Oh whheeeeeeee Oh wheeeeeeeeOOooohhhh

(fun fun…..)



Oh whheeeeeeee Oh wheeeeeeeeOOooohhhh

(fun fun…..)


~S~ w/apologies to the Beach Boys

 

[Deplorable Yankee]

Within the CARES Act 880 pages there appears to be a $454 billion slush fund designed to kill Wall Street's two main legitimate functions: price discovery and prudent capital allocation.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds.

"Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting.

"The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them."

 

[georgephillip]

Well the bankers can’t stand it
Cause everyones gotta hand in their face now
(hand in their face now, hand in their face now)
It makes the last crash seem like a roman chariot race now

Donnie and the T-Bills could be a blast from the past?

"Americans grew tired of the Wall Street bailouts and protested the cash injections in 2007-2008.

"Furthermore, two years later, after the financial meltdown in 2008, Occupy Wall Street protestors took to the streets in 2012 to fight against the same financial manipulation."

US Lawmaker Claims Stimulus Bill Bolsters Fed Secrecy, Pork Funds, and Wall Street Bailouts | Bitcoin News

I wonder if enough voters will connect the dots between the Dot com (911) bailout followed by the Great Recession bailout leading, in turn, to the Coronavirus bailout and ask whose net worth always increases?

 

[HereWeGoAgain]

I have fond memories making a shit ton of money off of junk bonds.

 

[georgephillip]

Within the CARES Act 880 pages there appears to be a $454 billion slush fund designed to kill Wall Street's two main legitimate functions: price discovery and prudent capital allocation.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds.

"Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting.

"The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them."

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate, regardless of which party controlled government.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"The two Fed programs that will be allowed to buy junk bonds along with investment grade bonds are called the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).

"The Fed could have done this all under one program name but it learned from its nationalization of bad Wall Street bets in 2008 that if you have a mind-numbing list of alphabet soup emergency programs, it takes the public a lot longer to figure out what’s really going on: that is, that the Fed is allowing Wall Street’s fat cats to privatize profits and socialize losses.

"This can also be expressed as an institutionalized wealth transfer scheme to the 1 percent.

"(See Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed.)"

 

[Toddsterpatriot]

Within the CARES Act 880 pages there appears to be a $454 billion slush fund designed to kill Wall Street's two main legitimate functions: price discovery and prudent capital allocation.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds.

"Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting.

"The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them."

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate, regardless of which party controlled government.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"The two Fed programs that will be allowed to buy junk bonds along with investment grade bonds are called the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).

"The Fed could have done this all under one program name but it learned from its nationalization of bad Wall Street bets in 2008 that if you have a mind-numbing list of alphabet soup emergency programs, it takes the public a lot longer to figure out what’s really going on: that is, that the Fed is allowing Wall Street’s fat cats to privatize profits and socialize losses.

"This can also be expressed as an institutionalized wealth transfer scheme to the 1 percent.

"(See Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed.)"

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate

Show me on this doll where the New York Fed touched you.

 

[Dont Taz Me Bro]

Within the CARES Act 880 pages there appears to be a $454 billion slush fund designed to kill Wall Street's two main legitimate functions: price discovery and prudent capital allocation.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds.

"Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting.

"The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them."

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate, regardless of which party controlled government.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"The two Fed programs that will be allowed to buy junk bonds along with investment grade bonds are called the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).

"The Fed could have done this all under one program name but it learned from its nationalization of bad Wall Street bets in 2008 that if you have a mind-numbing list of alphabet soup emergency programs, it takes the public a lot longer to figure out what’s really going on: that is, that the Fed is allowing Wall Street’s fat cats to privatize profits and socialize losses.

"This can also be expressed as an institutionalized wealth transfer scheme to the 1 percent.

"(See Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed.)"

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate

View attachment 322228

Show me on this doll where the New York Fed touched you.

Do you actually have a valid counterargument? I happen to agree with a lot of what he's saying.

 

[Toddsterpatriot]

Within the CARES Act 880 pages there appears to be a $454 billion slush fund designed to kill Wall Street's two main legitimate functions: price discovery and prudent capital allocation.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds.

"Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting.

"The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them."

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate, regardless of which party controlled government.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"The two Fed programs that will be allowed to buy junk bonds along with investment grade bonds are called the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).

"The Fed could have done this all under one program name but it learned from its nationalization of bad Wall Street bets in 2008 that if you have a mind-numbing list of alphabet soup emergency programs, it takes the public a lot longer to figure out what’s really going on: that is, that the Fed is allowing Wall Street’s fat cats to privatize profits and socialize losses.

"This can also be expressed as an institutionalized wealth transfer scheme to the 1 percent.

"(See Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed.)"

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate

View attachment 322228

Show me on this doll where the New York Fed touched you.

Do you actually have a valid counterargument? I happen to agree with a lot of what he's saying.

The New York Fed is part of the Federal government.
It isn't owned by multinational banks.
If they buy junk bonds it doesn't take money from George, it doesn't give his money to the 1%.

 

[georgephillip]

I have fond memories making a shit ton of money off of junk bonds.

When did that happen?

High-Yield Bonds (aka Junk Bonds)

 

[HereWeGoAgain]

I have fond memories making a shit ton of money off of junk bonds.

When did that happen?

High-Yield Bonds (aka Junk Bonds)

Your chart is short by 20 years.

 

[georgephillip]

Within the CARES Act 880 pages there appears to be a $454 billion slush fund designed to kill Wall Street's two main legitimate functions: price discovery and prudent capital allocation.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds.

"Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting.

"The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them."

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate, regardless of which party controlled government.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"The two Fed programs that will be allowed to buy junk bonds along with investment grade bonds are called the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).

"The Fed could have done this all under one program name but it learned from its nationalization of bad Wall Street bets in 2008 that if you have a mind-numbing list of alphabet soup emergency programs, it takes the public a lot longer to figure out what’s really going on: that is, that the Fed is allowing Wall Street’s fat cats to privatize profits and socialize losses.

"This can also be expressed as an institutionalized wealth transfer scheme to the 1 percent.

"(See Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed.)"

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate

View attachment 322228

Show me on this doll where the New York Fed touched you.

"For years now, prudent investors have been forgoing risky investments like junk bond ETFs and accepting a much tinier yield on U.S. Treasury securities.

"Now, high rollers like hedge funds that bought junk bonds and junk bond ETFs and received the higher yields, are getting bailed out of these risky bets.

"The markets will now, going forward, price junk bonds on a closer plane with Treasury securities, assuming the Fed will not let them fail.

"This is effectively killing the pricing mechanism of Wall Street. A U.S. Treasury note has the unconditional guarantee of the U.S. government to make the timely payment of interest every six months and pay the principal at maturity.

"Junk bonds are backed by nothing more than deeply-indebted corporations, which can, and do, frequently file for bankruptcy protection, making their bonds sometimes sell for pennies on the dollar.

"But going forward, junk bond ETFs will be priced on the premise that the Fed may ride to the rescue."

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

 

[georgephillip]

Your chart is short by 20 years.

R U

???

 

[Toddsterpatriot]

Within the CARES Act 880 pages there appears to be a $454 billion slush fund designed to kill Wall Street's two main legitimate functions: price discovery and prudent capital allocation.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"On Thursday, knowing that a three-day Easter weekend was coming and the attention of the public would be elsewhere, the Federal Reserve announced that it would allow two of its emergency lending programs to begin buying junk bonds.

"Those are bonds with less than an investment-grade credit rating, meaning they have a greater likelihood of defaulting.

"The Fed is not simply accepting junk bonds as collateral for loans, it will actually be buying junk bonds — potentially hundreds of billions of dollars of them."

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate, regardless of which party controlled government.

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"The two Fed programs that will be allowed to buy junk bonds along with investment grade bonds are called the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).

"The Fed could have done this all under one program name but it learned from its nationalization of bad Wall Street bets in 2008 that if you have a mind-numbing list of alphabet soup emergency programs, it takes the public a lot longer to figure out what’s really going on: that is, that the Fed is allowing Wall Street’s fat cats to privatize profits and socialize losses.

"This can also be expressed as an institutionalized wealth transfer scheme to the 1 percent.

"(See Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed.)"

For the last 40 years, finance capitalism has used Wall Street and its chief enabler, the New York Fed, as a mechanism to transfer wealth from the middle class to speculators in stocks, bonds, and real estate

View attachment 322228

Show me on this doll where the New York Fed touched you.

"For years now, prudent investors have been forgoing risky investments like junk bond ETFs and accepting a much tinier yield on U.S. Treasury securities.

"Now, high rollers like hedge funds that bought junk bonds and junk bond ETFs and received the higher yields, are getting bailed out of these risky bets.

"The markets will now, going forward, price junk bonds on a closer plane with Treasury securities, assuming the Fed will not let them fail.

"This is effectively killing the pricing mechanism of Wall Street. A U.S. Treasury note has the unconditional guarantee of the U.S. government to make the timely payment of interest every six months and pay the principal at maturity.

"Junk bonds are backed by nothing more than deeply-indebted corporations, which can, and do, frequently file for bankruptcy protection, making their bonds sometimes sell for pennies on the dollar.

"But going forward, junk bond ETFs will be priced on the premise that the Fed may ride to the rescue."

The Fed Is Killing the Two Main Functions of Wall Street: Price Discovery and Prudent Capital Allocation

"The markets will now, going forward, price junk bonds on a closer plane with Treasury securities,

And the Fed hasn't bought any yet.

assuming the Fed will not let them fail.

If the Fed buys some bonds, how does that prevent them from failing?

"Junk bonds are backed by nothing more than deeply-indebted corporations,

Yeah, bonds are backed by corporations. Duh.

which can, and do, frequently file for bankruptcy protection,

How frequently?

"But going forward, junk bond ETFs will be priced on the premise that the Fed may ride to the rescue."

Quick, sell your junk bond ETFs, get some of that 1% money.

 

[Natural Citizen]

The New York Fed is part of the Federal government.
It isn't owned by multinational banks.

You're either well underinformed or a blatant liar.

In either case you're wrong. As usual.

No government agency has shareholders.

 

[HereWeGoAgain]

Your chart is short by 20 years.

R U

???

Sorry I was a youngster .....so who the hell is that.

 

[Toddsterpatriot]

Your chart is short by 20 years.

R U

???

Nope.

Are you....

???

 

[Toddsterpatriot]

The New York Fed is part of the Federal government.
It isn't owned by multinational banks.

You're either well underinformed or a blatant liar.

In either case you're wrong. As usual.

No government agency has shareholders.

No government agency has shareholders.

What can those "shareholders" do with their "shares"?
Can they sell them? Can they buy more?
Can they vote themselves a higher "dividend"?
Can they vote themselves a chunk of the Fed's profits?

 

[Toddsterpatriot]

Your chart is short by 20 years.

R U

???

Sorry I was a youngster .....so who the hell is that.

The Father of Junk Bonds.

 

[Natural Citizen]

Relevant reading...

Announcement on Reserves

''As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.''

Effectively an official admission that reserves are a fiction. But we already knew that. Heh heh.

Anyway, banks will be unloading their questionable junk as fast as they can now, and the Fed will be buying it. Pretty clever swap to get the assets off the bank balance sheet while hiding them on the fed's balance sheet.