Posted on 06/15/2020 1:32:21 PM PDT by abb
Unfortunately, Kudlow, Trump, et al have ZERO to say about whether the Governors will institute lockdowns again..angry Tweestorms and totally empty, meaningless threats aside.
POTUS unfortunately screwed up "BIGLY" when he adjudicated all power to the Governors. Sure, he was trying to pass the buck..which seemed a reasonable strategy way back then - because he could easily blame them if things went badly. Now? Not so much..because he himself ceded ALL control. Oopsie!
That will make it easier for Socialcrats to socialize all the businesses.
“The Fed was buying Hertz Rental Car bonds. Hertz. Just-declared-bankruptcy-Hertz.”
The Hertz bonds were already selling at about 40 cents on the dollar, and that probably reasonably reflects the value of its existing capital stock. I’d be more worried if the Fed was buying Hertz equity shares, which will most likely be worthless after the bankruptcy filing is approved.
I see your point, but the larger (and more ominous) point is how much power would the Federal Reserve would be able to wield. The Fed can create billions of dollars out of thin air. You are the CEO of a company who is critical of the Federal government - bam - the Fed sells off the stock. You make the right campaign contribution - bam - up goes the price of your company’s stock. Can you imagine a Fed Chairman appointed by Hillary? I know the Fed is supposed to independent, but so is the IRS and Justice Department. The potential corruption is practically self fullfilling...
I agree with your concern. Central bank independence is already shaky enough without the Fed’s ability to buy and sell individual corporate stocks and bonds.
BTW, I like your username. Hayek’s “The Use of Knowledge in Society” (AER, 1945) is one of the great papers in economics.
There was a +900 point intraday turnaround today.
That is a very salient point. But it actually began in 2008/2009 if you recall.
Also please realize that this is how Japanese banks operate in Japan.
Who knows how it will unfold. Or maybe the word is “unravel”.
“YAWN! Wake me up when the DJIA recovers its nearly 1,800 point drop last Thursday.”
No kidding.
The Fed said it would pretty much “purchase” every scrap of debt from everywhere...or sumpin’ like dat.
It’s also how Finland, Sweden, etc... invest their social program monies. They have a five year and out plan in a lot of private equity ventures. (Not so private huh?) Companies that don’t follow SEC NYSE accounting rules and are held by individuals or a small group.
What!?!? Huh?!?! mumblemumblemumble... Oh, yeah. THE NEXT GREAT DEPRESSION IS NIGH!!! sez CNN. /s
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