[quote=gzz]Phaster the PBGC is not economically significant. It pays reduced pensions to old industrials whose defined benefit pension plans went bust. It will likely be bailed out if it becomes insolvent, but it won’t be that much money.[/quote]
unto itself the failure of PBGC might not be economically significant,… BUT what I am pondering is something akin to the expression “death by a thousand cuts”
IOW let’s first consider a failure of PBGC,… 10 million workers who bitch to politicians they are screwed, are going to demand taxpayers make them whole
here we have another issue which it is assumed local taxpayers are the financial backstop (i.e. the california rule),… AND these two potential failures are only first order taxpayer burden effects,… what of all the various negative feed backs if/when the economic house of cards falls???
speaking of a potential house of cards
[quote] Repo glitches expose flaws in Fed’s approach
Central bank might have acted more quickly if the repo market were its primary target
Overnight repo rates — the interest rate paid to borrow cash in exchange for Treasuries for just 24 hours — began rising on Monday, September 16. But it was not until after 9am the next day that the New York Fed, which is responsible for implementing the Federal Reserve’s monetary policy, stepped in to try to ease the strain.
According to John Williams, president of the New York Fed, the announcement was timed to coincide with the release of data showing a rise in the effective federal funds rate. That makes the mandate for intervention clear.
…But the Fed’s sortie into the repo market — since repeated several times — has stirred conversations about whether policymakers are focused on the right short-term rate. Fed funds was once the driving force of cash markets. Now it is a back-seat passenger and repo is at the wheel.
…fed funds is hardly representative of the dynamics affecting short-term lending markets. As was seen in September, its basic function — to track the Fed’s target rate — has broken down, because it is now susceptible to movements in other rates such as repo rather than driving them.
…Since the Fed has started reversing QE, reserves have fallen and some — but not all — players have consequently run short of cash again. Such shortages are threatening the ability of the Fed to maintain control of the effective fed funds rate
[quote] Fed to Keep Pumping Liquidity Into Repo Market Through October
By Alex Harris
October 4, 2019, 11:02 AM PDT Updated on October 4, 2019, 11:37 AM PDT
…The Federal Reserve Bank of New York said Friday that it will conduct operations for overnight repurchase agreements through Nov. 4, having previously only scheduled them through Oct. 10. The central bank also announced eight new term offerings to provide additional funding through this month.
…These measures are officially aimed at keeping the fed funds rate within the central bank’s target range. While those measures did bring the market more in line with this, there was a brief move upward in repo rates at the end of September as participants fulfilled quarter-end funding needs.
just saying w/ all the various issues not being directly addressed or well understood by those at the controls, I think we’re going to see a yuge example of murphy’s law in action
