by Just yesterday alone they added 2B in non-risk assets to Depositories: CNBC's Steve Liesman said with additional Fed action just announced, today will be a record 2 billion in purchases and a record 2 billion for the week. $SPY $TLT $GLD — Streetinsider.com (@Street_Insider) March 20, 2020 Market down 5% on that action alone yesterday... and makes it 2B added for the entire week... Which results in the largest weekly reduction in risk asset prices since they last did this in Sept. 2008 and caused the GFC: LATEST: The S&P 500 falls 15% in its biggest weekly drop since October 2008. U.S. stocks fall 4.4% to their lowest in three years https://t.co/gspkN0JbCa pic.twitter.com/IQoJnzZ7A0 — Bloomberg (@business) March 20, 2020 Why do they have to regulate the amount of Central
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Just yesterday alone they added $122B in non-risk assets to Depositories:
CNBC's Steve Liesman said with additional Fed action just announced, today will be a record $122 billion in purchases and a record $322 billion for the week. $SPY $TLT $GLD— Streetinsider.com (@Street_Insider) March 20, 2020
Market down 5% on that action alone yesterday... and makes it $322B added for the entire week... Which results in the largest weekly reduction in risk asset prices since they last did this in Sept. 2008 and caused the GFC:
LATEST: The S&P 500 falls 15% in its biggest weekly drop since October 2008. U.S. stocks fall 4.4% to their lowest in three years https://t.co/gspkN0JbCa pic.twitter.com/IQoJnzZ7A0— Bloomberg (@business) March 20, 2020
Why do they have to regulate the amount of Central Bank liabilities the Depositories possess as assets against the retained earnings of the Depositories? Why?
I don't see any functional need to do this and every time they add non-risk Reserves like this they cause a severe reduction in the prices of risk assets which is destabilizing to them...
Meanwhile the FRA charges them with "stable prices"... so hence they cause unstable prices...
Why do they do this? "banks need money to lend out!"???
Large increase in rate of UST issuance ahead so "you have to do a Reserve add before you can do a Reserve drain"????
Even so why regulate that against Retained Earnings? Why?
They are still going to add AT LEAST about another $350B in the short term so get ready for EVEN LOWER risk asset prices as a result...
We're going to be lucky if they don't stop here at their current plan for $700B total and double down and then REALLY cause a BIG problem with eventually a shutdown of the credit markets...
Then you'd have everyone looking for credit due to the Chinese virus shutdown and the banks wouldnt be able to make any loans...
Treasury would then have to add capital to the Depositories like last time (TARP) and then that should be the bottom...
Buckle up there is no telling what these unqualified and incompetent people are going to do... no way to predict their behavior...