Abuse of government programs to support small
businesses has already begun:
“Free money.
That’s the enticing prospect hedge funds and other
trading firms are pondering after realizing they too might be able to
participate in a historic U.S. stimulus package to keep small businesses alive
through the coronavirus pandemic….
Some hedge funds already have applied, filling out
forms to show they have fewer than 500 employees and certifying the “current
economic uncertainty makes this loan request necessary to support the ongoing
operations.”
Ironically, hedge funds are designed to employ as few
people as possible so star traders don’t have to share millions of dollars in
fees. The industry gets its name from the premise it can generate gains even
when markets fall”.
Effective Stimulus: The $1,200 stimulus checks are arriving. People are mostly spending them on food.
https://www.washingtonpost.com/business/2020/04/14/1200-relief-checks-have-begun-arriving-bank-accounts-people-are-mostly-spending-it-food/
Tax change in coronavirus package overwhelmingly
benefits millionaires, congressional body finds
Effective Stimulus: The $1,200 stimulus checks are arriving. People are mostly spending them on food.
https://www.washingtonpost.com/business/2020/04/14/1200-relief-checks-have-begun-arriving-bank-accounts-people-are-mostly-spending-it-food/
Has the Fed Finally Gone Overboard?
Fed’s High-Yield ETF Buying Defies Explanation
“Clarida is right that the coronavirus pandemic is an
exogenous event that’s wreaking havoc on businesses and causing an
unprecedented spike in unemployment. But how exactly do high-yield ETF
purchases help Americans get jobs or pay rent? It’s one thing for the Fed to
acknowledge that Ford Motor Co. and Macy’s Inc. lost their investment grades
during the crisis, and for the central bank to then use its power to create a
smoother path for those brand-name companies to get past this demand shock.
It’s quite another to pledge to buy up to 20% of a fund almost entirely made up
of businesses that carried junk ratings during the longest economic expansion
in U.S. history”.