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China to inject $174B of liquidity on Monday as markets reopen

reuters.com

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Re: China to inject $174B of liquidity on Monday as markets reopen

#41

Post by loyukfai »

jmnicolas wrote: post #21
cagenut wrote: post #15

Earlier quoted context omitted.

deaths are absolutely the wrong metric to focus on at this point. as you said, the normal flu is plenty deadly. even if we assumed that variable was break-even, what matters now is the rate of infection transmission and growth. right now it is still exponential. we can only hope for the bend in a sigmoid curve to come soon, but we haven't seen it yet. now on top of the fact that it is still exponential is the greates…

> what matters now is the rate of infection transmission and growth I don't think it's the right metric to focus either. The survivability rate once infected is probably the most important. I believe that medias business model (pay per click) force them to jump on and exaggerate any threat so as to get more views. It's not the first time and sadly not the last that we see such a thing. I could be wrong but I don't th…

Aren't both the rate of infection transmission and survivability important?

1. High infection rate + High survivability

2. High infection rate + Low survivability

3. Low infection rate + High survivability

4. Low infection rate + Low survivability

#2 would be disastrous, but we're not there now, and hopefully won't.

Re: China to inject $174B of liquidity on Monday as markets reopen

#42

Post by MR4D »

moneywoes wrote: post #23

For the economists out there, how much will this help?

Not much. Might even have the opposite effect.

This is like China’s 9-11. They have fear, a travel shutdown, and effectively shut down their businesses for at least a week.

The economic impact just driven by the fear is huge. The magnitude probably won’t be truly understood until the second half of the year.

Re: China to inject $174B of liquidity on Monday as markets reopen

#43

Post by MR4D »

cltsang wrote: post #24

Pardon my lack of economics knowledge. They may be able to keep the stock afloat for a few days, then what's next? Where will the money eventually go? How can this help when economic activities halt?

This is a liquidity event, not a stock market problem. They have to be solved differently.

So you are right that they may help the market for a day or two, but that won’t solve the underlying issue as you suspected.

More will be needed. Much, much more.

Re: China to inject $174B of liquidity on Monday as markets reopen

#45

Post by bitxbit »

QuesnayJr wrote: post #37
notyourwork wrote: post #26

> It will do the exact opposite. Hasn’t the Chinese government been doing this for years in one form or another to artificially stimulate the market?

I don't understand this obsession with "artificial" stimulus. If the economy naturally grows at 2% a year, but "artificial" stimulus causes it to grow at 3% a year, why wouldn't you do it? It's like refusing to get vaccines because they are unnatural.

In a way you’re assuming no inflation which has been the case for the past decade. BUT. What happens when China goes offline and takes low cost labor with it? For the record, I believe this situation will resolve within the month but it will certainly reveal global over-reliance on China (this is meant as a positive comment that China has been the single driving force behind economic recovery which they don’t get enough credit for).

Re: China to inject $174B of liquidity on Monday as markets reopen

#46

Post by totalZero »

mrscottson wrote: post #10
wyxuan wrote: post #4

Wilbur Ross's comments come off as a little callous but whatever. Anyway, these repo operations are meant to stabilize the markets in the event of a flash crash where there is a major dislocation on the price of equities, due to the coronavirus. Still might be a major downside move, but it should stave any long term move downwards.

The emergency repo operations were required long before the coronavirus, we have liquidity issues in the US. Economy will start to collapse shortly... Fed can't expand the balance sheet without exacerbating the problems.

In the US, cost of money for institutions is already so low that effective interest rates could absorb a lot of demand without going haywire. It might actually be healthy for the economy.

I do agree that the Fed has been unwise in buying debt just to bolster Donald's bull market.

Re: China to inject $174B of liquidity on Monday as markets reopen

#47

Post by notyourwork »

grey-area wrote: post #40
notyourwork wrote: post #26

> It will do the exact opposite. Hasn’t the Chinese government been doing this for years in one form or another to artificially stimulate the market?

The entire world has been doing it for the last decade, and there’s been another uptick recently. The US recently resumed buying treasuries. This is not isolated to China.

My understanding was the US was not doing this to the extent China was. There construction projects to build ghost cities.

Re: China to inject $174B of liquidity on Monday as markets reopen

#48

Post by jmnicolas »

londons_explore wrote: post #36
jmnicolas wrote: post #16

Earlier quoted context omitted.

I wouldn't travel to China now, but I wouldn't hesitate to travel anywhere else in the world (I'll gladly accept any donations to prove my point ;-)

I'd even happily travel to china. My worry would be the risk of being stuck somewhere when my planned transport is cancelled rather than being infected and dying. 300 deaths out of over a billion people is nothing.

https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.h...

According to this link there was 14451 cases in China, even if statistically insignificant (something like 0.001%) it's a bit much for my taste, especially if we consider that the Chinese authorities could have massively downplayed the number of infected persons.

Re: China to inject $174B of liquidity on Monday as markets reopen

#49

Post by notyourwork »

bitxbit wrote: post #45
QuesnayJr wrote: post #37

Earlier quoted context omitted.

I don't understand this obsession with "artificial" stimulus. If the economy naturally grows at 2% a year, but "artificial" stimulus causes it to grow at 3% a year, why wouldn't you do it? It's like refusing to get vaccines because they are unnatural.

In a way you’re assuming no inflation which has been the case for the past decade. BUT. What happens when China goes offline and takes low cost labor with it? For the record, I believe this situation will resolve within the month but it will certainly reveal global over-reliance on China (this is meant as a positive comment that China has been the single driving force behind economic recovery which they don’t get eno…

The lost lives of their blue collar work force deserve the credit.

Re: China to inject $174B of liquidity on Monday as markets reopen

#50

Post by norrius »

jmnicolas wrote: post #33
wwwtyro wrote: post #2

Here's a map with the latest coronavirus data: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.h...

According to your link the survivability rate is almost 98% (305 deaths for 14628 cases). (I'm trying to inject a bit of optimism here, people are so gloomy).

Given what appears to be exponential growth, the calculation seems to ignore potential future deaths in the currently known cases. Pardon the morbidity and cynicism, but maybe some of these 14628 people haven't had the time to die yet?

Wouldn't it be more appropriate to compare deaths (305) to the number of people successfully recovered (348 as per the same page)? This gives the survivability rate of 53%, which does sound scary (and I'd love to be proven wrong here).

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