“Suppressing” bank balance-sheet data in a banking crisis to prevent the biggies from yanking their billions out of a weakened bank.
Loading up on Treasury securities, mortgage-backed securities, repos, “central bank liquidity swaps,” and “loans” to keep the Everything Bubble from imploding further.
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.
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.
Drags out bailout creature from Financial Crisis 1: “Loans” to Primary Dealers.
Frazzled by the sudden appearance of Financial Crisis 2, the Fed scurries in every bailout direction.
If the Fed hadn’t spent a decade inflating such a mind-blowing Everything Bubble (that had already begun to wobble), the financial reactions wouldn’t be nearly as chaotic.
Chapter 11 bankruptcy that wipes out shareholders is the correct solution for collapsing share-buyback queens. US airlines already know this from experience. It works.