| [Publisher's Note: With the market in a seemingly constant downward spiral, I've been holding emergency calls with our expert analysts. I want to get their take on the market — and their ideas for what you can do to protect your wealth. That's exactly why I brought back macroeconomic expert Graham Summers yesterday. Graham is an expert on global central bank activity. Graham and I discussed the Fed's emergency rate cut over the weekend... and the market's reaction to it. Click here to get Graham's thoughts about exactly what's going on, what the next steps are, and what you can do to profit right now...] We Are Now Approaching the "Lehman" Moment... PREPARE NOW! Dear Money & Crisis Reader, Someone or some people are in MAJOR trouble. Back in September 2019, the Fed announced it would begin implementing a number of repurchase "repo" programs. If you're unfamiliar with repo programs, these are programs through which the Fed allows financial banks/institutions to park assets at the Fed in exchange for cash. At the time the Fed announced this, it claimed that it was performing these programs to help with a capital crunch due to tax season. However, that excuse was soon proven to be total bunk – the repo programs were extended from September through October and finally through January. At the same time, the repo programs grew in size from $75 billion for overnight repos and $30 billion for term repos, to $120 billion in overnight repos and $45 billion in term repos. Why would the Fed be doing this? After all, the economy was growing at the time. And there were no indications or systemic risk in the U.S. financial system. Lehman-like Liquidation is Coming to the Markets The Fed was NOT doing this to help out with tax season… The real reason the Fed was doing this? A financial institution or institutions were in BAD SHAPE and desperate for capital. By bad shape, I mean "Lehman Brothers" type failure. Now, we do not know who it is. But considering the fact that the Fed announced an emergency round of $1.5 TRILLION in repos last week… and that it stopped the market from collapsing… suggests it's a very LARGE institution (think the size of Deutsche Bank or UBS). With this in mind, it doesn't matter what happens with coronavirus or with the economy. If a large, systemically important financial institution or bank fails, we could get a Lehman-like liquidation in the markets. |
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