what is going on in American "government"??

6-11-20   Fed printed $2.9 trillion since early March. That’s about $22,000 per household.  But this money wasn’t spread to them.  It was helicopter money for Wall Street. And it went on to multiply.  And most of it ended up with a relatively small number of households.  And their wealth increased by the trillions of dollars….

  And so the Fed bailed hedge funds out through the “backdoor” by buying vast amounts of Treasuries that pushed up their prices and pushed down their yields.  And this action made sure that the people whose money was tied up in these hedge funds didn’t have to pay the price for the risk they took.  They were made whole entirely, even as tens of millions of Americans lost their jobs….

  “As volatility soared, real-estate investment trusts that invest in mortgage-backed securities were forced sellers as they struggled to meet margin calls,” Dudley said.  “Again, the Fed purchases helped limit their losses.”

  And then there is the bailout of “heavily indebted corporations,” as Dudley put it.  “This is significant because many corporations took on lots of debt by choice,” he said.  So the Fed set up these special purpose vehicles, or SPVs, to purchase corporate bonds and leveraged loans, which pushed up their prices, pushed down the yield, and allowed these over-indebted companies to borrow in the market that was suddenly chasing yield as yield was evaporating.

  “These actions also protected investors in high-yield mutual-bond funds,” Dudley said.  “Had the funds been forced to sell amid plunging prices to meet large redemptions, this could have set off a chain reaction in which falling prices begat more sales. Both the asset managers and the retail investors who bought shares in these junk-bond funds escaped bearing the cost of their actions,” he said.

  In central-bank lingo this is called “moral hazard”:  Bailing out the wealthy and asset holders, hedge funds, mortgage REITs, private equity firms, and huge risk takers, and it’s called “moral hazard” because it encourages this risky behavior because they know that they’re going to get a bailout when it hits the fan next time, and so they do the same thing again and take even greater risks, and it blows up again with even bigger consequences, and they get bailed out again with even more trillions.

https://wolfstreet.com/2020/06/11/america-convulses-in-pain-fed-bails-out-the-wealthy/