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A single best idea, and since we've had two hours sleep, I think two nights in a row is a collective team here at Bloomberg's Surveillance that we're gonna make this quick today, but we can't because the guest quality today was so much. I can't say enough about the conversation with ed El Husseini and Ira Jersey. We broke a rule at the beginning of the nine o'clock hour and we talked very sophisticated short term paper fixed income stuff
like what pros in the street talk about. We really try to stay jargon free, and ed ed L. Husseini of Columbia Thread Needle was actually quite good about that. I can't say it about Ira Jersey. He was on fire. He is a true expert for Bloomberg Intelligence on the short term market, what I call the trust market. And you know who's looking at that right now, the Fed. Here's Ira Jersey on the FED.
I think the Federal Reserve has a job to do here, and it's more of a traditional job that we've kind of forgotten about over the last seventeen or eighteen years, and that's that they are the lender of last resort and who are they going to lend to at this point. Well, they've created some liquidity programs that just haven't worked the
way that they had hoped. So there's the standing REPO facility that they thought would be able to replace the traditional open market operations, liquidity operations that they had done every day. They used to do these operations every single day prior to two thousand and eight. But it's not working because it's design. It has design flaws, and you know that's probably too wonky for most of your listeners.
But let's think about the Federal Reserve as a first step doing traditional open market operations, just like it did after the REPO hiccup in twenty nineteen. So they do overnights, they do one week repos. They basically they basically allow balance sheets to expand a little bit for people to take advantage of relative value opportunities in the treasury market. And I agree with Ed that is the you know,
that would be a beneficial outcome. The second thing that's very easy to do that you know, I hope that the FSOC, the Financial Stability Oversight Council, gets together in an emergency meeting soon and says, hey, let's do something that we were thinking about doing anyway, and just get rid of the supplementary leverage ratio from treasury. So exempt treasuries from some of the bank capital rules, that allows balance sheets to expand. It incentivizes dealers and banks to
actually buy some treasuries. Those are two easy things that could be done today, right, So it's not And those aren't things that are unusual either. We did do them in March of twenty twenty.
The advantage of a podcast, you can rewind it and listen to that again. That is a window into the adult perspective of Bloomberg Intelligence. There unfixed income our Jersey, but Gina Martin Adams today, inequities, Damien Sassauer and em these people are grizzled Wall Street pros. We rarely do that, but you just got a window into the inside baseball and the trust market. That's what we try to do here at Bloomberg Surveillance. We also like to look at
people's biography. Pat Haskell is at Blackrock and yes it's municipal bonds, but far more than that, he has decade of experience out of Union College of being on desks and with a tension we saw this morning at four am, five am to worry about hedge funds and all. It was a joy to have Pat Haskell with us, just to give perspective across previous crises. Here the gentleman from Blackrock.
If we step back, one of the great traders I work with early in my career and a client of mine, always said, first rule of trading always fade emotion. So if we step back, now we think about this and we're like, all right, what's going to happen? Is a recession likely to result from this?
Yes?
Is the FED likely to have lower rates a year end?
Yes?
So when I think about that and I back into my market and you look at some of the levels that are available today, super attractive. And if you're going to take a CounterPunch at this market and you're going to buy something with a little bit of some high quality spread, you're going to do something that's not affected by global supply chains. What's that essential services immunities.
He repeated that a number of times, I don't have the exact piece in front of me, but he mentioned Pat mentioned a New York City muni that has been so beat up and he believes it's of quality. He said, it's been so beat up it generates a ten percent equivalent return in that old triple text free New York state. This is single best idea across nation and our commute. Thank you so much for listening on YouTube and on YouTube podcasts. It is single best idea.