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If you think the Fed's going to fire hundreds of billions or trillions of dollars of "stimulus" rounds at the coronavirus crisis and pierce its grip on mankind, on the market, and on the economy, you're wrong.
This is an existential threat to humans, markets, and economies, which the Fed's ammo can't kill – but it sure can make it worse.
Here's what the Fed's doing, what it's going to do, why it won't work, how you'll know it's not working, and how they're going to make everything worse…
Bazookas and Moving Targets
Back in July 2008, as the financial crisis was heating up, then Treasury Secretary Hank Paulson asked the Senate Banking Committee for an unlimited amount of credit to rescue Fannie Mae and Freddie Mac, explaining, "If you've got a squirt gun in your pocket, you may have to take it out. If you've got a bazooka, and people know you've got it, you may not have to take it out. By increasing confidence, it will greatly reduce the likelihood it will ever be used."
Paulson got his bazooka, but he still had to run back to Congress two months later and beg for $700 billion more, this time to bail out Wall Street.
The U.S. Federal Reserve – America's private central bank – on the other hand, doesn't have to go to Congress; it's got its own bazooka and an unlimited amount of ammunition, which it's already been firing at targets left, right, and center.
The Fed can "print" as much money as it wants without asking anyone for anything and fire its funds at will.
It's already fired hundreds of billions of dollars at its primary target, the too-big-to-fail banks that feed the Wall Street moneymaking machine – and lately, once again, money-losing machine.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
He helped develop what has become known as the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of 10X Trader, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade.
Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps.
Shah is a frequent guest on CNBC, Forbes, and Marketwatch, and you can catch him every week on Fox Business's "Varney & Co."
He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.
thank you for your kind words
Looks like I have been to complacent and must reduce my exposure
to this market. I have bought many hi yield stocks such as Reits thinking it
would get me thru the downturn . It has been making things worse.Articles that i just read indicate the bowers may not be able to repay (restaurants and small business). Better to take some losses before they get wiped out!