Is the Fed breaking the law?

[tsptalk]

The Fed says it is going to start buying individual corporate bonds

The Federal Reserve is expanding its foray into corporate credit to now buy individual corporate bonds, on top of the exchange-traded funds it already is buying, the central bank announced Monday.

https://www.cnbc.com/2020/06/15/the...-start-buying-individual-corporate-bonds.html



On another note, John Hussman of Hussman Funds says this in his latest commentary...

The moment the Fed purchases corporate bonds beyond the amount of CARES funds directly provided by the Treasury, without taking collateral, it violates CARES explicit “requirements relating to loan collateralization, taxpayer protection, and borrower solvency.” The moment any of the Fed’s purchases generate a loss beyond CARES funds directly provided by the Treasury, it will have extended this violation to include Article 1 Section 8 of the U.S. Constitution.

https://www.hussmanfunds.com/comment/mc200608/

 

[Bullitt]

Read Hussman on and off (mostly off) over the years, but he's been off the rails since February. Non-stop updates on the COVID panic, non-stop complaints about the federal reserve, non-stop complaints about rigged markets. The man is smart, but the complaining is too much. He was pretty cheerful during the recent crash, but that quickly turned back into complaints that markets are rigged - a common complaint from those who are under performing.

Old review, but he's been bearish since 2008 or so, and I can't recall him ever being bullish.

...evidence from simple tests does not support belief that John Hussman successfully times the stock market via fund hedging adjustments based on his assessments of market valuation and market action.

https://www.cxoadvisory.com/individual-gurus/john-hussman/

And here are the updated charts of his funds. It's one thing to underperform, but how do you do it by this much? Numbers would be even worse if you bought in 2009.

HSTRX:


HSGFX: