Fed buying corporate bonds

[Bozzie]

ABSOLUTELY AMAZING.
Never in my wildest imagination could I believe this could happen. Now won't they be a good customer?.... you can bet on that..
Hello, Mr Kudlow how about some new PG&E ...just printed.
Buy whatever you want now, the coast is officially clear.



https://www.cnbc.com/2020/06/15/the...-start-buying-individual-corporate-bonds.html

 

[Bozzie]

Buying junk bonds too...These guys will not let the market fail... invest away.
Propped up market ... eventually the dollar will slide.


https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200615a1.pdf


Eligible Issuers for Individual Corporate Bonds: To qualify as an eligible issuer of an eligible individual corporate bond, the issuer must satisfy the following conditions:

1. The issuer is a business that is created or organized in the United States or under the laws of the United States with significant operations in and a majority of its employees based in the United States.
2. The issuer was rated at least BBB-/Baa3 as of March 22, 2020, by a major nationally recognized statistical rating organization (“NRSRO”). If rated by multiple major NRSROs, the issuer must be rated at least BBB-/Baa3 by two or more NRSROs as of March 22, 2020.
   1. An issuer that was rated at least BBB-/Baa3 as of March 22, 2020, but was subsequently downgraded, must be rated at least BB-/Ba3 as of the date on which the Facility makes a purchase. If rated by multiple major NRSROs, such an issuer must be rated at least BB-/Ba3 by two or more NRSROs at the time the Facility makes a purchase.
   2. In every case, issuer ratings are subject to review by the Federal Reserve.

 

[Bruins4Life]

What do you see as the best area to take advantage of this short term?

Tech?

 

[Bozzie]

What do you see as the best area to take advantage of this short term?

Tech?

Short term, keep with the program the Fed is all in and the market might see new highs...That seem like destiny at this point with the amount of money pushed into the markets. Powell mentioned he has "Almost unlimited amounts of money to push into the market" on 60 Min recently.
With all this debt the dollar will (IMO) eventually slide, maybe not this year but someplace down the line the imbalance will play out and it might be sudden and drastic.
Stagflation is something I've been reading about, SF seems plausible given the war like conditions and the state of the economy.

https://www.kitco.com/commentaries/2020-06-12/The-road-to-stagflation-is-being-paved-with-gold.html

At this point it's a huge experiment..

 

[Bozzie]

DOL / 401ks and 9 trillion dollars.

This quietly happened after a bit of a fight. , it's yet another liquidity source for the equity markets.
Hopefully this "experiment" works out..exposing 401Ks in bulk to this market? the public slaughter could be ugly or not.

https://www.commondreams.org/views/...risky-private-equity-investments-workers-401k


https://www.forbes.com/sites/edward...ws-401k-investors-to-the-wolves/#27afce9d7edd

 

[brucefan]

Yet we have a President who was begging for lower interest rates, pleading for more QE , supports bailouts and this out of cotrol debt monetization, yet he has no clue none of this has anything to do with capitalism

The Us has become a banana republic

 

[Bozzie]

Interesting brief history of an asset bubble.

https://www.thebalance.com/japan-s-lost-decade-brief-history-and-lessons-1979056

 

[Bozzie]

Banks can now take stake in Venture Funds.
Aren't we in a capital crisis ?