In the continuing mystery of "agency debt," for which the Fed intends to spend $200B (around $1500 T*Bux) as a part of its quantitative easing program—"agency" we think means the GSE's—but "debt" remains ill-defined other than it probably does not mean mortgage-backed securities since there is a separate $1.25T program for that.
On his blog, Mish showed a robust market for corporate debt over the past month which he attributed to fueling the S&P index.
If this is where the $200B is earmarked—toward buying, insuring, or somehow facilitating corporate debt—we have an explanation for the sustained comeback of U.S. stock indices in the setting of an otherwise deteriorating economy.
But I don't know of any GSE that invests in major corporations so, again, the term "agency" continues to remain non-specific.
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