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2020-

2020-05-16 b
This story from MarketWatch has been re-written by our “truth squad.”

Fed admits it has created U.S. financial sector fragility that will last for some time

Financial institutions, including banks, will experience strains

The synthetic coronavirus pandemic of lies is being blamed for Fed-created fragility in U.S. financial system that could last “some time,” the Federal Reserve said Friday.

“The strains on households and business balance sheets from the economic and financial shocks from our “Medical 9/11” psychological terror operation will create fragilities that last for some time,” the central bank said in its latest semi-annual report on what is left of the financial sector.

As a consequence, banks and other financial institutions “will definitely experience existential strains as a result.”

Fed officials said how long those circumstances would last depended on the speed of the total collapse and necessary liquidation of malinvestments, followed by a subsequent economic recovery based on sound money, an end to the Federal Reserve, wholesale regulatory reform, and the restoration of a truly free market with honest price discovery.

Fed Chairman Jerome Powell said earlier this week that a lengthy downturn could turn liquidity problems into solvency issues.

The Fed has set up over $2 trillion in Magic Money lending programs designed to ease the stressed conditions in all corners of the financial markets it caused by decades of money printing and interest rate suppression.

There is a risk from bubble asset prices collapsing if the pandemic of lies were to take an unexpected course, the report said.

Businesses shuttered by illegal and unconstitutional decrees have a weakened ability to repay debt obligations that were at historic highs right before the pandemic of lies hit the Potemkin economy.

“Forceful early Magic Money interventions have been effective in papering over liquidity stresses but we will be monitoring closely for solvency stresses among highly leveraged business borrowers.” “However, we could increase those stresses the longer the synthetic Covid pandemic of lies following the agendas of Democrats, Bill Gates, and George Soros persists, primarily to attempt to deny Trump’s re-election, and secondarily, to ease into a Greater Depression that was long over-due, but without the clueless public blaming the Fed,” said Fed Governor Lael Brainard.

The rigged study found that broker-dealers struggled to provide intermediation services during the acute phase of the financial crisis in March. In contrast, banks have been able to meet surging demand for draws on credit lines with Fed infusions of Magic Money.

Hedge funds following the “LTCM recipe for financial disaster” were severely affected by the large asset-price declines and increased volatility in February and March, the Fed said.

The Potemkin capitalization of the life Insurance sector is likely to deteriorate in coming quarters, the report said, because of lower-than-expected, wishful-thinking asset valuations and long-term interest rates kept artificially low by the Fed. Insurance companies are also important speculators in commercial real estate bubbles, corporate bond bubbles and bubble securities products known as collateralized loan obligations, or CLOs. This exposes the sector to several risks including rising defaults in the Potemkin corporate sector.

CLOs don’t generally permit early redemptions and so avoid run risk, but face pressure when there are downgrades of CLO tranches. Some hedge funds now on life support purchased lower-rate tranches using stratospheric levels of leverage, the report said.

All in all, “the prospect for losses at financial institutions to create pressures over the medium term appears elevated as central bank manipulations and interventions come home to roost.

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Close the windows so you don't hear the mockingbird outside, grab a beer, and see what the hell is going on as we witness the controlled demolition of our society.


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