US Bank and Hedge Fund Bailout via Repo Market Accelerates
Starting Sept 17th 2019 the USA’s Federal Reserve had to print billions of dollars and inject them into the overnight bank lending market (Repo Market). Since that time the FED has had to continuously print and add more money daily—that figure is now over 460 Billion (with a B) with no end in sight. This is a VERY bad thing just by itself as liquidity issues with this market is what happened before right before the start of 2008 GFC and stock market crash.
History Repeats?
A month and half before Lehman Brothers Holdings Inc. went bankrupt, they were out of collateral to back their short-term loans and needed to use the Repo Market every night to survive, this is happening again, but this time with an unknown bank or hedge fund entity(s). Note: No laws were changed since the GFC to keep Banks from investing in risky investments and/or ending Central Bank manipulation of markets.
Since September 17, 2019 we now have the CONVID-19 virus causing huge supply and demand shocks/problems for everyone and the economy.
Understand: This means that one or more US Banks and/or hedge funds is bankrupt and can’t pay their debts--they need emergency money (daily) to meet their obligations. No other banks will loan them money (even overnight) so the Federal Reserve has had to save them on a daily basis. What would be nice for the taxpayers to know (they did bail those big banks out in 2008) is the identity of the bank or hedge funds that is needing all this money so they could protect themselves—but the FED is hiding that information, saying they are private bank and don’t even have to respond to that question until two years after official requests have been made and even then they really aren’t required to tell—as they are private so aren’t required to comply with governmental type requests from the public. They have historically complied previously as a courtesy (and to appear like they are Federal Government bank).
Resources/Credits:
Fed Repo Graphic is from an YouTube video series “In the Interests of the People” by two Australian Economists: John Adams and Analyst Martin North.