Because the Fedâa actions stink of desperation and they problem have seen the numbers that a massive margin call / credit event is about to happen and theyâre trying to get in front of it. If that event plays out, banks will be squeezed.
Also an interesting watch/read: why massive central bank QE and more demand-side policies would create the opposite effect in a pandemic shock.
https://www.dlacalle.com/en/emergency-smes-face-a-global-crunch-drowned-in-liquidity/
Just been watching the screens with our Treasury traders. Liquidity crunch not helped by end of quarter - if this carries on into early April, things are going to get far more ugly for banks in particular for 6 months (at a guess).
Spreads blown out - crazy markups.
What do you do?
Not just banks. Things will play out in a months time or so when companies will have to report their Q1 performance, and will like start to downgrade their forecasts for the rest of the year. We will also see employment going up then, as airlines and oil companies have already started to lay off people and this will only be the start.
Jeez!
I sold out at ÂŁ4.26 - no idea they had dropped like that!
Thankfully a very small part of my portfolio
Regulatory Compliance at a Commercial Bank.
Agreed. Focusing on my own backyard for now 
So obviously itâs easy being an armchair Central Bank chairman, but it strikes me as evident that you canât fix a health pandemic with quantitative easing and rate cuts.
It strikes me as even odder that given a decade of QE and near zero interest rates, they have rolled the last dice now, as after yesterdayâs announcement thereâs very few tools left in their arsenal.
Wouldnât it have made more sense to wait with fiscal stimulus until the pandemic has peaked, as now we are just trying to inflate a bubble that is deflating quicker than you can pump money in it. All itâs doing is bailing out companies that couldnât cover their debts, or for years have been using capital to buy back billions $ of shares in a vain attempt to keep artificially inflating their share prices, rather than using their money to prop up their balance sheets in a frugal fashion.
Ultimately it will be the little man on the street that pays for all this through either taxes or by losing their jobs, whilst the big boys walk away in tact. Big corporates donât like socialism, except in times of crisis it strikes me.
ABF down big due to primark closing 30 stores outside UK. So much for a defensive play, although I still like it and need to revisit my valuation to see if It is worth adding to
Central banks are trying to prevent a credit crunch. That is a more damaging possibility then simply a fall in aggregate demand as it will feed into the banking sector and weaken it which, in turn, will slow or prevent the recovery.
I get what they are trying to do, I am doubtful it will help.
Pumping in liquidity during a potential crunch helps large and indebted companies, not the smalls caps or frugal ones who make up 90% of the corporate fabric.
Itâs like throwing bad money after bad money as proposed measures donât help small companies and risk zombifying large indebted companies. No-one wins. The modern day definition is doing the same thing and expecting a different outcome - the Fed is falling in this trap.
This is an interesting read, albeit perhaps some what contrarian:
https://www.dlacalle.com/en/emergency-smes-face-a-global-crunch-drowned-in-liquidity/
He is from Canada 
Was waiting for crash but this is not fun.
I had two shitty positions in FT and they bot caught virus and now on deathbed.
Central banks will extend facilities to banks which will provide them cheap credit providing it is lent out. I do agree with you that this will probably just go towards asset purchases rather than actual SMEs.
Just a clarification; QE is monetary stimulus and not fiscal stimulus.
Right now, whatâs becoming extremely clear is that the real economy needs immediate life support and in practise this means both, though arguably QE might not be the best type of monetary stimulus as first response, as this isnât rooted in a financial crisis.
A secondary, but perhaps more important side effect is that meaningful support to the real economy should in theory boost confidence. Unfortunately, Christine Largardeâs poor messaging didnât help as at this stage this is about âwhatever it takesâ and the real economy and financial system need to hear and see this.