Loading up on Treasury securities, mortgage-backed securities, repos, “central bank liquidity swaps,” and “loans” to keep the Everything Bubble from imploding further.
“Nobody has any taste for risk anymore. All of those exotic loan programs have ceased. All investors buying that paper are gone”: mortgage broker.
“The leveraged share buyback game has ended, which also means an end to the phony earnings growth.”
Now even the fig leaf is gone.
Fed’s assets spike to high heaven to bail out the imploded Everything Bubble it had worked so hard to inflate over the past decade.
In good Financial Crisis manner, stuff blows up despite the Fed’s effort to stem the chaos. Now hoping for taxpayer bailouts.
Even after the bottom is perceived to be in, “buybacks may be slow to come back” as companies struggle for cash amid potential government restrictions on buybacks and their dismal public image: S&P Dow Jones Indices.
S&P made up for its tardiness by downgrading the CMBS in one fell swoop by 9 notches from AAA to BBB-, just one notch above junk.
Indirectly via its Special Purpose Vehicles and its Primary Dealers, the Fed can buy even old bicycles, as long as taxpayers take the losses.
This is the moment when yield-chasing turns into a massacre.