Return of Repo Man

The US Fed pumped $66 Billion more into the Repo market today.  

Here is a good summary of what is happening..

https://fortune.com/2019/09/23/repo-market-big-deal-400-billion-bailout-unnerving/

From this article...

"Put otherwise, the Fed is back where it was roughly a decade ago, effectively buying U.S. Treasuries from banks on an indefinite basis. But the difference this time? There’s no financial crisis in sight, just the uncomfortable fact that private capital markets once again need public support.

“For all intents and purposes, this will be equivalent to QE, with scheduled purchases of securities. We estimate that over the first year, the Fed would need to buy roughly $400bn of Treasury securities to achieve an appropriate level of reserves, plus a buffer,” the Bank of America wrote in a research note.

As plumbing problems go, this will be an expensive one to sort out."

Nothing in this is normal. The private financial markets are not working, and they need central bank intervention to function.

The article notes that there is no financial crisis is in sight??!  This is true, except that they might want to mention that but for the intervention we have seen over the last six days, we would be in a financial crisis right now!

They are estimating that $400 Billion support should do it.  But counting last week, the US Fed has already supplied roughly $345 Billion!  So, another $55 Billion and we are gold?!

Hmmm...we have seen estimates like this before = QE1, QE2, QE3!  

Would you bet they are off in theri $400 Billion estimate by, say $2 Trillion? 

Or will this support have to be endless...have we reached the point where financial markets can only function as long as the US Fed prints new money to make them work? 

What will that do to the underlying confidence that businesses an consumer have in the economy?

What I do know for sure - this chaos means that the Banksters will be cashing in their bonuses soon!

The Swindle Continues...