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Fri Apr 3, 2020, 06:02 AM

$1.5 Trillion Helicopter Money for Wall Street in 3 Weeks of Fed Bailouts

by Wolf Richter • Apr 2, 2020 •

Loading up on Treasury securities, mortgage-backed securities, repos, “central bank liquidity swaps,” and “loans” to keep the Everything Bubble from imploding further.

By Wolf Richter for WOLF STREET:

Total assets on the Fed’s weekly balance sheet – mostly composed of Treasury securities, mortgage-backed securities (MBS), repurchase agreements (repos), “foreign central bank liquidity swaps,” and “loans” – spiked by $557 billion in just one week, to $5.81 trillion, according to the Fed’s release Thursday afternoon.

This doesn’t yet include about $200 billion in MBS that the Fed bought over the past three weeks but whose trades have not yet settled (the Fed will book them later when they settle). With those MBS included, the Fed now holds over $6 trillion in assets.


Loans”: The newly hot bailout

“Loans” is a group of asset accounts on the Fed’s balance sheet that had been essentially asleep since Financial Crisis 1. But over the past three weeks, they jumped from near-zero to $129 billion. This is what the Fed has lent out as part of its new bailout liquidity programs and direct lending programs, by category:

- Primary credit: $44 billion
- Primary Dealer Credit Facility: $33 billion
-Money Market Mutual Fund Liquidity Facility: $53 billion

The chart is on the same scale as the charts for swaps and repos above, giving these loans room to grow into as Wall Street gets more of its helicopter money: .......(more)


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