The intervention of the State in the economy and markets to stabilise the system has gained huge proportions in the US. Some may have missed that in the $2 trillion package, most of a #500 bn part is assigned to give guarantees to FED´s SPVs that buy securities 1/4
Only with that first-loss backstop can the FED legally purchase private securities, giving credit to the issuers. Powell mentioned that 1 dollar of guarantees allows 10 of purchases. Mnuchin said that the FED could lever the guarantees to provide 4 trillion of purchases. 2/4
The FED is already buying corporate bonds, commercial paper, bond ETFs, municipal bonds, asset-backed securities, and also announced future support for small firms loans. The FED balance-sheet already exceeds 5 trillion and will continue to increase 3/4 
Some conservatives are reacting and talk about “nationalization of financial markets,” or “The FED is giving money creation to the Treasury.” They don´t want to understand the fragility of the lightly regulated financial markets that don´t self-equilibrate and need the State.4/4
