The CARES Act was signed into law on March 27. Congress earmarked $454 billion of that stimulus money to be distributed by the Treasury to the Federal Reserve to be used for emergency lending programs to save businesses and jobs during the pandemic and keep credit flowing to the U.S. economy. The catch was that the Treasury Secretary, Steve Mnuchin, would have to give his approval for each of the programs.Wall Street On Parade
Since June, Wall Street On Parade has been reporting that $340 billion of the $454 billion that Mnuchin was instructed to turn over to the Fed was unaccounted for. We noted that 98,000 businesses had permanently closed in the U.S. while this money, intended for economic relief, went missing....
75% of the $454 Billion CARES Act Money Never Went to the Fed; It Was Invested by a Mnuchin Slush Fund Called the ESF
Pam Martens and Russ Martens
The Fed never needed it in the first place. This is the real story. And Mnuchin's a crony capitalist? What else is new?
ReplyDeleteThe USDs are in the TGA they are accounted for.,, they’ve never been withdrawn this one of the reasons the TGA balance has remained unprecedentedly high... creating a “reserve drain”... iow Reserves at Depositories have remained lower ....
ReplyDeleteEnding these loan backstops will allow Treasury to spend down the TGA... exacerbating the current credit contraction as banks will now have to allocate capital to these newly increased risk free reserve assets.,,
The Treasury schema for its Daily Treasury Statement identifies the source of funds on the deposit side and the direction of funds in the withdrawal side.., ie there is no deposit for the “ESF” there is only a withdrawal for the “ESF”...
ReplyDeleteThere is over 1.5T in the TGA there is more than enough USD balance to provide $400B to the Fed if it needed it...
The policy is ending and I guess the Treasury will reduce the TGA accordingly...
Do Pam and Russ have any Accounting background?
ReplyDeleteAnd another thing if it “went to the Fed” it would show up as excess capital at the Fed of 400b and Fed is statutorily required to transfer capital balance above 8B immediately back to TGA (which is where it is anyway) ...so this “went to Fed” idea is legally impossible ...
ReplyDeleteLegally impossible is a non sense term, the word you are looking for is illegal. We already know that this administration ignores every law it finds inconvenient to its goals
ReplyDeleteWe know that statute you refer can be changed or ignored
It would not be in accordance with statutory regulations...
ReplyDeleteAsk Pam and Russ what the maximin capital balance the Fed can possess is...
ReplyDeleteOr better yet ask Pam and Russ to define capital...
They would say “duhaghg duh duGhst...”
“It would not be in accordance with statutory regulations...“
ReplyDeleteSo? Like that should matter?
Just change or ignore statutory regulations, happens all the time. I don’t give a rip about statutory regulations in this area and neither do the people working in these arenas if the “statutory regulations” prevent them from achieving their goals
No they don’t they sweep excess capital multiple transactions per month it shows up as a TGA deposit in the DTS often... they can’t let it get much above 8B or so ..., and they don’t..,
ReplyDeleteOoooooh, what happens if it gets “above 8B or so”? Explosion? Locusts? Perpetual darkness?
ReplyDelete