Thanks to reader Wesley..

Lynda

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Another product of this illegal lockdown is people loosing their homes.

By Tyler Durden

While markets remain on edge over the sudden tension between the Treasury and the Fed, following Mnuchin’s surprise notice to Powell that the Treasury would let 8 of the key 13(3) “emergency” programs currently in place (including the critical for the bond market Corporate Credit facilities, PMCCF and SMCCF) at the Fed expire on Dec 31

… which also threatens the continuation of Helicopter Money into 2021 as the only reason the Fed has been able to monetize all US issuance this year while sending stocks soaring has been the close cooperation between the Fed and Treasury, another, more important “expiration” will take place on Dec 31, and will likely have far more profound consequences for the broader US population.

Here’s why: on Dec 31 is when many of the key provisions in the CARES Act are set to expire if there is no action from Congress. All else equal, some 12 million American will likely lose access to their Emergency unemployment benefits activated in the aftermath of the covid pandemic, which alone could be a drag of up to 1.5% to growth in 1Q according to Bank of America. Additionally, the concurrent expiration of eviction moratorium, mortgage forbearance programs, and suspension of student loan payments could all be headwinds early next year, creating further obstacles.

Some background

The CARES Act expanded unemployment insurance eligibility and duration during the pandemic. Of this, the Pandemic Unemployment Assistance (PUA) program was the largest component, giving unemployment benefits to workers who are normally ineligible for regular state UI programs such as contract and self-employed workers. The PUA gave these workers 39 weeks of unemployment benefits. Meanwhile the Pandemic Emergency Unemployment Compensation (PEUC) program provided 13 additional weeks of benefits to those that exhausted regular state UI benefits. These programs will expire on December 26th.