American Reality Check

[pmbug]

Jim Grant gave an interview on CNBC the other day. Sprott posted a transcript:

https://www.sprottmedia.com/james-grant-nobody-knows-anything/

Good stuff.

 

[pmbug]

The Federal Reserve publishes public updates on it's balance sheet Thursday afternoons. You can find them here: https://www.federalreserve.gov/releases/h41/

3/12/2020: $ 4.360 T
3/19/2020: $ 4.716 T
3/26/2020: $ 5.302 T

Will it hit $6T next week?

Close, but just short...

4/2/2020: $ 5.859 T

Can we make it to 7T next week?

 

[pmbug]

... we don't know exactly what the future will hold – but at a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008. ...

https://reports.jpmorganchase.com/investor-relations/2019/ar-ceo-letters.htm

 

[shinnosuke]

Bad for who? Or is it whom? Whatever. It won't be bad for the oligarchs.

 

[pmbug]

To facilitate lending to small businesses via the Small Business Administration's Paycheck Protection Program (PPP), the Federal Reserve will establish a facility to provide term financing backed by PPP loans. Additional details will be announced this week.

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200406a.htm

Money printers (continue to) go brrr

 

[Unobtanium]

Speaking of brrrr:
[Wish I know how to make a twitter video show up as a video in forum message space]

https://twitter.com/QTRResearch/status/1246970102681124866

 

[pmbug]

Back on March 21 (post #290), I referenced a story announcing a Senate bill to amend the Federal Reserve Act so the Fed could buy up municiple bonds. Looks like Dems in Congress are going to try and shoehorn that measure into the next stimulus bill...

Democrats in Congress want the Federal Reserve to buy all types of municipal debt, regardless of rating, to help ease the impact of the coronavirus pandemic on state and local governments.

“I think they should take the risk,” said Representative Rashida Tlaib, a member of the House Financial Services Committee. “We did it for the big banks, they should be able to do it for the local governments. Local governments are too important to fail right now.”

The coronavirus pandemic has crushed sources of tax revenue for states and localities at a time when resources, including paramedics and hospitals, are being committed to combat the threat to public health.

Tlaib said that her view has the support of Financial Services Chairwoman Maxine Waters and House Speaker Nancy Pelosi. She’s pressing to pass legislation that would change Section 14b of the Federal Reserve Act to allow the central bank to buy municipal debt of any duration in response to crises and emergencies A bill introduced in the Senate by New Jersey Democrat Bob Menendez also backs such an amendment.
...

https://www.bloomberg.com/news/arti...w-rated-muni-debt-to-ease-strain?srnd=premium

 

[pmbug]

Bazooka!

The U.S. Federal Reserve on Thursday rolled out a broad, $2.3 trillion effort to bolster local governments and small and mid-sized businesses in its latest move to keep the U.S. economy intact as the country battles the coronavirus pandemic.
...

https://www.reuters.com/article/us-...p-main-street-local-governments-idUSKCN21R1WY

 

[pmbug]

4/9/20: $ 6.131T

Much lower than I was expecting. Seems unreal with all the programs the Fed has initiated.

 

[pmbug]

4/16/20 - $ 6.416 T

Just another ho hum $300B increase.

 

[pmbug]

4/23/20 - $ 6.621 T

Only $205B this week.

 

[Fiddle & Rose]

I heard there are famines going on in Europe, and Russia isn't sending food. I wonder how much this'll affect us.

 

[rblong2us]

I heard there are famines going on in Europe, and Russia isn't sending food. I wonder how much this'll affect us.

Where did you get this info Fiddle ?
Russia probably isnt sending food cos 'Russia bad' and you never bought food from them in the first place ........

I am in UK and I am not aware of any undercurrent of food shortages here.

I am reading about the shutting down of a significant percentage of meat processing plants in the US though.
It occurrs to me that this will absolutely destroy the meat producers as they now have animals ready for market and no market.
Yeah they can continue to feed them but once they go past their optimal conditioning to get them ready for market its not the same quality .......

Perhaps Beyond Meat can pick up the slack and assure the destruction of livestock farming :flushed:

 

[Fiddle & Rose]

Where did you get this info Fiddle ?
Russia probably isnt sending food cos 'Russia bad' and you never bought food from them in the first place ........

I am in UK and I am not aware of any undercurrent of food shortages here.

I am reading about the shutting down of a significant percentage of meat processing plants in the US though.
It occurrs to me that this will absolutely destroy the meat producers as they now have animals ready for market and no market.
Yeah they can continue to feed them but once they go past their optimal conditioning to get them ready for market its not the same quality .......

Perhaps Beyond Meat can pick up the slack and assure the destruction of livestock farming :flushed:

Maybe it was a ploy by big BYND since that stock just keeps shooting up.

https://www.foxnews.com/world/coronavirus-pandemic-famines-united-nations

The global coronavirus outbreak threatens to worsen the existing food crises around the world and create “a hunger pandemic,” the chief of the United Nations Food Program warned earlier this week.

 

[pmbug]

Found this analysis of the Fed's balance sheet:

https://wolfstreet.com/2020/04/23/fed-slashed-qe-further-still-hasnt-bought-junk-bonds-or-etfs/

tl;dr - The Fed isn't doing everything they announced they were going to do. It's almost like the announcements were "shock and awe".

 

[pmbug]

4/30/20 - $ 6.703 T

Just $82B increase. Not sure how the equity markets are levitating so much when the balance sheet expansion is slowing down so much.

 

[pmbug]

Related to post #315:

Responding indirectly to Jeff Gunlach's late Friday tweet, in which the bond king observed something we had noted previously, namely that "the Fed has not actually bought any Corporate Bonds via the shell company set up to circumvent the restrictions of the Federal Reserve Act of 1913" adding that this "must be the most effective jawboning success in Fed history if that is true"...

... moments ago the The New York Fed announced on its website that it expects to begin purchasing eligible ETFs, most notably the LQD and JNK, but also many others as detailed previously...

... as part of its emergency lending programs in "early May."
...

More: https://www.zerohedge.com/markets/n...h-reveals-it-will-start-buying-etfs-early-may

 

[rblong2us]

4/30/20 - $ 6.703 T

Just $82B increase. Not sure how the equity markets are levitating so much when the balance sheet expansion is slowing down so much.

yeah apparently the printing ink manufacturers are having problems with staff self isolating
And theres no planes flying from Zimbabwe, where theres plenty :rotflmbo: ffftt:

 

[pmbug]

5/7/20 - $ 6.769 T

Just a $66B increase. Looks like the Fed now owns $4B in the "Commercial Paper Funding Facility II LLC".

 

[pmbug]

5/14/20 - $6.982T

$213B increase. Biggest weekly increase in a month after steadily declining increases.

Edit: Wolf analysis:

https://wolfstreet.com/2020/05/14/f...g-and-media-hype-that-triggered-a-huge-rally/