Emergency Exists As Fed Distorts Markets And Nationalizes Private Assets

Despite the cocaine fueled rally in stocks, an emergency exists as the Fed desperately continues to distort markets and nationalize private assets.

What Emergency Exists?
June 16 (King World News) – Peter Boockvar:  I argue that the main reason why the corporate bond market froze up in March was the inevitable result of the Volcker Rule which dramatically limited the ability of banks to make markets. The level of inventory that banks can hold is a fraction of what it used to be. Why did repo rates spike in September where a JPM for example couldn’t commit capital to receive a 9% annualized overnight rate with US treasuries as collateral? Regulation. What’s the Federal Reserve’s answer? Print money to buy bonds and rationalize it as ‘helping market functioning’ when it really was just QE. What emergency exists that the Fed needs to buy the bonds of IG companies? No discussion seen on dealing with the actual result of punitive regulation on the functioning of markets. Fed Distorting Markets And Nationalizing Private Assets
So with the Fed now distorting private markets and nationalizing private assets what individual bonds will the Fed be buying? Well, looking at the holdings of LQD, which they are buying outright, the Fed will be buying Microsoft bonds and I’m sure they will buy some bonds from Apple and Amazon. Maybe Jay Powell will talk about this today during his Congressional visit about how he thinks this is necessary that he is now a FANG+M bond buyer. Here are some other company bonds in LQD, Anheuser Busch, Goldman Sachs, CVS, Wells Fargo, Bank America, Verizon, Visa, Comcast and even Berkshire Hathaway…more here

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