The U.S. Federal Reserve said it will buy an unlimited amount of government debt, as well as corporate and municipal bonds, in the biggest expansion of its balance sheet in history.
The Fed said it will buy Treasury bonds and mortgage-backed securities, which form the basis of its traditional quantitative easing program, in "in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy", a massive increase from the $700 billion in announced last week. It will also add purchases of corporate debt, municipal bonds, and other assets as its balance sheet looks set to balloon from its current $4.7 trillion level.
Well, look, I think the Fed... Every single CEO is weighing in, right? I'm sorry. You want me to stay closed. If you're watching the call, you have to understand the reason why I do this is because when a big CEO weighs in, and there are big CEOs and I don't mind calling that, they're all weighing in with the idea of offering helpful ideas that obviously give me in summation. And there's someone who just now runs a company of 300,000 people, gave me some ideas. The Fed... If you had to figure out what needed to be done for all the different markets, whether it be the money market, commercial real estate market, the mortgage market, the market for, what I would regard as being even stocks, whatever, which would mean credit from banks, the line of credit market is a big industry.
They're doing it. And what we keep hearing... It's whack a mole. We'll hear that, "Oh my God. Well, the real problem is commercial mortgage." Tom Barrack from Colony Capital put out a very reasoned note this weekend about the... I don't know. He throws around a $2 trillion number of commercial real estate. Everything's 2 trillion. And I come back and I say, "Well, you know what? The Fed response... The fed says, "You're fine," and they want you to go about leading your life and doing what you're doing, but they cannot create demand. And that's why I keep saying we have to have a deadline where we are back. And we are not back if we just, to me, say, "Let's wait. Let's keep waiting. Let's hope and let's wait." No, that's not the way we need to think. What we need to think is we're going to be back in some form or another so let's keep it together while we're back at forbearance. Don't demand it.
Your rent... I have a couple of tenants, right? And I hope they pay. I want them to pay. Every tenant, every landlord wants people to pay. If they have a special circumstance where they've lost their job or something, well, I'm not Scrooge. We do need... Another one, geez. We do need to do something that is bugging the heck out of me, which is we need to have a president... Really? We need to have a president who, very calmly, not attacking that report, very calmly says, "Okay, look. I was in real estate," and then instead of just asking... The reporters endlessly ask him about his business. I don't really care. I'm waiting for him to say he didn't go bankrupt three times of casinos.
What we really want is we want something which just says, "Okay, we're going to solve this. It's going to be not that long until we solve it, so why doesn't everybody forbear as much as they can. And if they can't, we're going to have a small business... Don't do it for big business. We're going to have a small business loan that is going to be put in your pocket and you will be able to survive so that when we get to the other side, not if, but when, you'll be in business." And that's what's needed. Sometimes I feel like a [inaudible 00:13:03] to do it. Sometimes I think there might have to be a new commission because everyone's so busy, but we cannot just say, "All right, my business, my kids have sold it and our kids run the business."
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