Lot of opining going on from self-interested CNBC pundits down to #fintwit randos on the wrong side of a trade (me) re #fed actions. Spent some time reviewing Section 13 of the Fed Reserve Act and notes in thread. I’m no lawyer or fed specialist so welcome critique/additions...

Can the #fed really involve itself with corp debt? In ‘exigent’ circumstances: yes, as long as there is documented evidence the participants couldn’t get credit elsewhere.

How do you price that which the market cannot price? 
Not really clear from the referenced 14 (d) beyond the fact that it must be done by class and reviewed every 14 days.

Why was junk debt such a shocker to include? 
In no uncertain terms these facilities cannot be used to ‘aid a failing company’ and security for these loans must be ‘sufficient to protect taxpayers from losses’. Collateral must be established of a lendable value.

Why does 2008 QE experience matter?
Also in no uncertain terms these facilities are to be terminated in a timely and orderly fashion. As many have pointed out with FRED charts, 'timely' may be a relative term.

Why is Mnuchin so involved if the #fed is meant to be an independent body? In these exigent circumstances, for better or worse, his sign-off is required.

How does the #fed validate solvency/credit worthiness? at the very least (presumably where prior referenced documented collateral is difficult to validate) a CEO must certify solvency in writing with requirement to update if this changes.

Are controls in place to ensure the standards laid out in Section 13: “Powers of Federal Reserve Banks”? Yea, lots, see attached. But probably most importantly, with a stroke of Powell’s pen they can all be hidden.

Can the #fed establish broad-based rules of eligibility? In pretty clear language, no. This raises a lot of questions about the Blackrock SPVs, PMCCF (direct to companies) and SMCCF (secondary purchases)

How does the Blackrock PMCCF work? Companies that want money get money as far as I can tell with pretty blind faith in Blackrock to pick the winners.
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a5.pdf

How does the Blackrock SMCCF work? Eligible sellers here seem to be any US company. Again seems like much is left up to Blackrock but I must be missing something here.
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a2.pdf