Fed Money Pumping Indicates ‘Some Kind of Emergency Is Taking Place’

Oct. 8, 2019 (EIRNS)—One or more of the major U.S. or foreign banks that are “primary dealers” to the New York Fed are in deep trouble, according to Pam Martens and Russ Martens writing in their Oct. 7 article in “Wall Street on Parade.” “That is the only reasonable conclusion that can be drawn from the Fed’s announcement on Friday that it is extending its money pumping program to Wall Street until at least Nov. 4.... So it would certainly appear that there is some kind of ‘emergency’ taking place.”

The Martens’ article is the latest in a series of articles they have published on the looming blowout of the financial system, as it faces a situation similar to that of 2008, or worse. “The Fed’s money sluicing operation that began abruptly on Sept. 17” is all very much like what the Fed secretively did “during the early days of the 2008 crash—a time when it also refused to name the banks that were receiving the money.”

Like everything else in the trans-Atlantic financial sector, in the decade since the last crash there has been growing concentration in fewer banks, while overall insolvency has worsened. The primary dealers conduct open market operations with the New York Fed, and are contractually bound to make purchases in every auction of U.S. Treasuries. “There were 46 primary dealers in 1988. By 1999, that number had shrunk to 30. Today, it stands at 24. A large number of these primary dealers are the securities units of foreign banks.”