The Fed’s liquidity hose is now a water cannon

Let’s look at what Jerome Powell and the Federal Reserve did Monday morning.

There is no longer any piece of paper from any loan that Americans have signed that will not be bought by the Fed. If you owe a debt to a company, it will probably be sold to Powell & Co., especially if you are behind the debt by a payment or two.

The Fed is no longer giving shorter-term loans against this paper, because the financial firms could not repay the overnight loans against that paper, so it becomes a payment and not a loan.

This tells you everything you need to know about how constricted banks and other financial institutions balance sheets are. Believe me we are not in a good place with the economy.

Into this backdrop come the Democrats to selfishly play politics with the bailout bill for average Americans.

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