Washington, DC – In a stunning development, the Fed announced Friday it will expand its asset purchase plan to now include defective COVID-19 testing kits. Initially, the purchases will only involve the “ID NOW”, manufactured by Abbot Labs. The kits have come under heavy scrutiny this week after research showed that “up to 97% of the negative results using ID NOW were actually positive when tested on other devices”.
In a prepared statement, Fed Chair Jerome Powell said “we’re buying everything else – so screw it”. When asked if the bailout of Abbot Labs and their defective kits might create moral hazard moving forward, Powell replied “Look, this is how capitalism works. Sometimes companies risk significant capital, and profit when they succeed. Other times, their risk doesn’t pay off. Our mandate is to ensure these executives and shareholders are getting paid either way”.
Asked where the funding for these purchases would come from, Powell snapped “don’t worry about it – we will find some funds otherwise earmarked for poor people…”. He added, “we also believe we can make a profit for the taxpayers with this plan, by ultimately unloading these tests on some poor, third world country”.
Though initially planning to purchase only the ID NOW tests, Powell didn’t rule out including other testing kits in future rounds of purchases. In order for a test to be considered, it will have to be either touted at a Trump presser – or have been mentioned by Larry Kudlow on CNBC during a pump session – before July 1 of this year. When ultimately proven defective, it may then qualify for the new program. Similar to the “fallen angels” of the bond purchase program, Powell labeled these future defective kits as “floating turds”.
Shortly after the Fed statement was released, both General Motors and Ford announced plans to convert 100% of their manufacturing capacity toward making their own COVID-19 tests. Neither company was available for comment.
Written by Mike Hunt