Faber News Flow

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As expected, there were no changes to either the ECB's rates or purchase program, or its €750BN expanded QE, aka the pandemic emergency purchase programme, with the ECB reiterating its willingness to do more, and clarifying that "the Governing Council will conduct net asset purchases under the PEPP until it judges that the coronavirus crisis phase is over, but in any case until the end of this year." The central bank also said the asset purchase programme plan will continue at a monthly pace of €20BN, together with the purchases under the additional €120BN temporary envelope until the end of the year, adding that "the Governing Council continues to expect monthly net asset purchases under the APP to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates." Separately, the ECB made the conditions for the previously announced TLTRO slightly more favorable by cutt...

Online brokerages are reporting a massive increase in new accounts and trading activity among newbie retail clients during this year's stock market turmoil triggered by coronavirus lockdowns, reported   The Wall Street Journal .  Pajama traders have been enticed by zero commission trades offered by TD Ameritrade Holding and E*Trade Financial Corp. Many of these first-time traders are "BTFD" as they believe a V-shaped recovery in the stock market and economy are inevitable. After all, it happened in 2016, 2019, why not in 2020? Shown below, TD Ameritrade's daily average client trades soared when commissions slashed to zero in 4Q19 and continue to rise through the pandemic.  The Journal interviewed several retail traders, putting their life savings into a brokerage account because they believe with zero commission trades, now is the time to be invested.  Eugene LeGrand,34, a construction estimator, said he was super excited about free trades and set up a TD Ameritrade a...

Who could have known that instead of asking for taxpayer bailouts, all Boeing - whose market cap is now far below that of Tesla - had to do to replenish much needed liquidity, was to come to the Fed-backstopped bond market. One day after S&P downgraded Boeing to just one notch above junk, or BBB-, as a result of the company's massive debt load which was  a record $38.9 billion  as of the end of Q1... ... the Baa2/BBB- company added  another $25 billion  in debt to its balance sheet, effectively assuring that it will be downgraded to junk in the coming months. But what is fascinating is how easy it was for the soon-to-be fallen angel to issue the debt. Fed's Powell Says Now Is Not the Time to Worry About Federal Debt According to Reuters, Boeing approached the market targeting a $10BN in new debt. However, after a brief but successful roadshow, Bloomberg reported that the company had received $70BN in orders for its offering. The massive, 5x oversubscribtion meant that the c...

As Steven Mnuchin previewed last week when he said he's considering an additional lending facility for troubled U.S. energy companies, at 10am on Thursday the Fed - which is now joined at the hip with the Treasury - announced that it is expanding the scope and eligibility for the Main Street Lending Program which was developed "as part of its broad effort to support the economy" and "to help credit flow to small and medium-sized businesses that were in sound financial condition before the pandemic." Specifically, the central bank said businesses with up to 15,000 employees or up to $5 billion in annual revenue are now eligible, compared to the initial program terms which were for companies with up to 10,000 employees and $2.5 billion in revenue, doubling the revenue limit from previous guidelines and raising the employee limit by 5,000. The maximum loan size would be limited to 4x adjusted 2019 EBITDA while the minimum loan size was lowered to $500,000 from $1 m...