Let’s look at a few of Chairman Powel’s words at yesterday’s press conference. Please read them and tell me whether this sounds to you like a man who doesn’t understand what he’s doing. Or if you think he’s deliberately pulling words out of his ass, stringing them together, and spewing them from his mouth in an effort to gaslight the investing public.
I’ll take the latter. The Fed is in the propaganda business. It knows what it is doing. Double talk, lies, and utter bullshit are its stock-in-trade.
Liquidity moves markets!
Powell’s spew was in response to a question from the confused but affable Michael Mckee of Bloomberg, who no doubt served up the question on a suggestion from his Fed handlers.
McKee: The BIS concluded in September that the repo spike was not a one off confluence of random events but reflected structural and regulatory issues that could lead to a recurrence.
This is the utter nonsense that the Fed and Primary Dealers who own Wall Street want you to believe. The fact is that the dealers and banks could no longer continue to help finance the burgeoning Federal debt. They had reached the end of their willingness, and/or their ability, to continue to use repo funding from each other to fund the growing flood of Treasury issuance.
McKee: I’d like to ask you if you agree with the BIS findings and given that we are approaching year-end for the markets will you be taking any extra steps to ensure that funding is available in the repo and FX swaps markets.
There was a report yesterday, Credit Suisse suggesting there’s a good chance that we will see disruptions and one of the reasons they December 11, 2019 put it forward is that the Fed is at this point buying only T-bills and the market wants to sell coupons, do you have any plans to sell coupons?
I believe that McKee meant to ask if the Fed has any plans to buy coupons, not sell them. But his question was almost as nonsensical as Powell’s response,