Yeah.S&P 500 has hit its December 24th 2018 low at about 2350 when during that time it hit a bear market until Fed changed course by stating they would stop raising rates and in 2019 they cut rates and launched repo and not QE liquidity operations.

Now that that 2350 has been breached (and Dow below 20,000 psychological level)the algos and market participants will panic out of stocks.

Putin's revenge.In the late 1980s the Regan Administration colluded with Saudi Arabia to tank oil prices from 30 USD to 10 USD to bankrupt the USSR into collapse.
Then in 2014,the US colluded with Saudi Arabia to push oil prices lower to punish Russia for annexing Crimea and with sanctions Russia went into recession.Now Putin unleashing his payback.Moscow has largely USD dedollarized,has very little external debt thus Putin has decided to play the oil card to force prices and inflict pain on the overleveraged debt ridden US shale oil industry and general US economy into recession.Geo-politics game per excellence.

FED NOW BAILING OUT DISTRESSED MONEY MARKET FUNDS,BUYS CORPORATE,MUNICIPAL BONDS PLUS STOCKS

Everyday a new scheme by the Fed to pump up failing markets.

On late Wednesday evening,the Fed has setup Money Market Mutual Liquidity Fund which will provide loans to financial institutions to buy assets from prime money market funds.Concern had risen in recent days about the prime funds, which purchase non-Treasury debt, such as corporate debt, commercial paper and government agency debt. They had seen outflows as large corporate and institutional depositors sought to raise cash amid the financial turmoil.This in turn put pressure on corporate funding markets, as prime money market funds withdrew and now the Fed is to backstop this market.



Fed now buying stocks and corporate bonds apart from the usual treasuries and mortgage backed securities.

As indicated in the Fed's website,Federal Reserve Board announces establishment of a Primary Dealer Credit Facility (PDCF).In this facility,credit extended to primary dealers under this facility may be collateralized by a broad range of investment grade debt securities, including commercial paper and municipal bonds, and a broad range of equity securities.

As I had always suspected Fed would inevitably scoop up corporate bonds and stocks and add them to its ridiculously bloated balance sheet.



Overnight repos now hit 1 trillion a day



The New York Federal Reserve said it will make up to $1 trillion a day available for loans in the repo market for the remainder of this week.

The Fed said it will offer up to $500 billion in overnight repo loans each morning and an additional $500 billion in overnight repo loans each afternoon.

Lets not forget there are still 500 billion term repos being injected and 700 billion of QE.

With all this stocks still closed lower with S&P down 5.18%.This index breached the 2350 December 24th 2018 lows and Plunge Protection Team steeped up to buy the market in the last 20 minutes of trading to ensure it doesnt close below this level.Dow closes below 20,000 practically wiping out all gains made since Trump took office.

Futures again down today with Dow futures down -666 as I write this.

WOOOOOI!!

EUROPEAN CENTRAL BANK (ECB) LAUNCHES A NEW STIMULUS 750 BILLION EURO BOND BUYING PROGRAM

The Eurozone that suffers from a minus 0.5 !!ECB deposit rate ,negative yielding government bonds and negative yielding corporate bonds has now committed to a further 750 billion Euros to buy both government and corporate bonds.



To state that negative yielding sovereign and corporate bonds are a disaster is to understate the obvious.An investor would be insane to hold these bonds to maturity as you are guaranteed to lose money yet Japan and Eurozone are flooded with these type of bonds.At some point 1/3 of global sovereign debt (17 trillion)and 1 trillion of corporate debt was negative yielding.Investment firms are forced by law to buy these bonds for capital appreciation when they buy/sell them in the secondary market but when they near maturity they dump them to the ECB to eat the losses at maturity.

ECB holds upto 1/3 of the entire government bond market of the Eurozone countries.The ECB balance sheet is just over 4.7 trillion Euros.They also scoop up corporate bonds from firms like LVMH, Kering, Unilever, Nestle, Repsol,Siemens and Shell some of which are negative yielding corporate bonds with zero coupon meaning investors are effectively paying to lend the company money if they hold the debt to maturity and the issuing firm does not pay a single penny in interest.Greek,Italian and Spanish bonds are always in distress and the ECB just buys them up to feed their large deficit social welfare spending otherwise their bond markets would collapse.

Thanks to negative interest rates,European banks are zombie banks with hardly any profitability,share prices collapsed upto 90% for some of them.Italian banks were already choking under 20% rate of Non Performing Loans and Covid-19 just makes the situation worse as now Italian government has implemented moratorium on loan repayments for duration of the outbreak meaning these banks are in even more dire straits needing ECB bailout.Germany's largest bank ie Deutsche Bank is a notorious loss making bank with share price having collapsed from 148 in 2007 pre GFC to trade as low as 4.99 this week.This bank has engaged in all manner of fraud schemes like money laundering,rigging interest rates like LIBOR,rigging gold/silver markets and fined numerous times for this.It posted a loss of 5.3 billion Euros in 2019 and had a 47 trillion derivatives exposure (over 12 times German GDP).It was regarded by IMF as the most systemically riskiest bank by the IMF and most expect it to the first Lehman type failure in the global downturn but this failure would be at least 5 times larger than the Lehman bankruptcy.