As part of the Coronavirus CARES Act, the $2 trillion fiscal stimulus meant to resuscitate the US economy, Congress allocated $454 billion to help underwrite the special lending programs from the Federal Reserve. This could generate up to $4.540 trillion in new lending (assuming 10x leverage for highly-rated assets) likely geared toward small and medium-sized businesses. (Click to enlarge) It now turns out that the first industry to benefit from direct Fed loans is the imploding US energy sector, which for the past decade benefited indirectly from Fed generosity by issuing junk bonds to yield-starved investors who are now facing near-certain bankruptcy in the face, as the price of oil – if it stays at this level – assures they will never be repaid. Speaking at a White House news conference on Thursday, Treasury Secretary Steven Mnuchin said energy companies squeezed by the oil-price war can turn to the […]