Risky Business for Fed

'Yesterday in the Fed's Swap-O-Rama Gets Crazier I noted that banks and broker dealers are bundling up high-yield, high-risk corporate loans for which there is no market into Collateralized Loan Obligations (CLOs) for the express purpose of swapping with the Fed. This is just the kind of thing that leads to more abuse and more mistrust, and the Fed's balance sheet is rapidly filling up with garbage.'