On March 26 Federal Reserve Chairman Jerome Powell went on the Today show to deliver one message: “There is nothing fundamentally wrong with our economy.” Recently U.S. Treasury Secretary Steve Mnuchin has appeared on the White House lawn to tell reporters that this is nothing like the last financial crisis. Fed regional bank presidents have appeared on cable news asserting that the Wall Street banks have plenty of capital and today’s economic distress is caused solely by the coronavirus. Even New York Times columnist and perpetual Wall Street cheerleader, Paul Krugman, was on CNBC this week reassuring viewers that today’s problem was not like the last financial crisis.
And yet – the facts keep getting in the way of this “official” narrative.
The first coronavirus COVID-19 case was discovered in China in December 2019 and didn’t become a major issue in the United States until February 2020. But on October 7, 2019 we reported that Wall Street banks had announced a staggering 68,000 job cuts as the Fed pumped $310 billion more in unprecedented loans to Wall Street. That doesn’t sound like there was “nothing fundamentally wrong with our economy,” the narrative that Powell is pushing.
On October 9 we reported that Powell had appeared at a speaking event in Denver at the National Association of Business Economists and acknowledged that a larger, long-term bailout of Wall Street was on its way. That also doesn’t sound like everything was fine in the financial world before the coronavirus hit.
On January 27, 2020, again before any reported death from coronavirus in the U.S., we reported that Fed Repos Have Plowed $6.6 Trillion to Wall Street in Four Months; That’s 34% of Its Feeding Tube During Epic Financial Crash. Again, that doesn’t sound like there was nothing fundamentally wrong before the coronavirus hit.
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