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Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

cnbc.com

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Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#161

Post by RIMR »

laughingbovine wrote: post #157

Guys this is low-level plumbing work to keep the market moving. If they DIDNT do this, then people wouldn't be able to make trades, and that would cause trust to be lost in the system, and that would be really bad. Someone correct me if I'm wrong, but I believe this money is for what are effectively loans that will get paid back in a very short amount of time.

Maybe trust SHOULD be lost in this system if it can't withstand the real world without falling into chaos...

This money could do so much good in our society, and yet we're using it to prop up a broken capitalist system that contributes to economic problems for Americans.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#162

Post by ipnon »

kylebenzle wrote: post #139
mamon wrote: post #131

Earlier quoted context omitted.

>> They are providing short-term loans If I want to give my friend a loan, I need to earn that money first by working hard. FED does not conduct any profitable activity that would earn them any money, they DO PRINT that money from thin air.

Why do people keep telling the lie that the FED "does not print money"? As you say, these "loans" are the FED printing $1.5t, no other way to look at it.

The key distinction is that the Fed is trading the new money for high-quality collateral. The original owners of the collateral will return the Fed's money within weeks of months in exchange for the return of the collateral.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#163

Post by paulmd »

newyankee wrote: post #27

What can a retail investor really do ? Is this even a free market. Cannot even do passive investing safely enough.

your retirement fund? do absolutely nothing, you are at extreme risk of selling low and buying high if you attempt to time the market. Just ride it out. That 7% per year average return includes the years you make 15% and the years you lose 15%.

in fact the next few months are probably a great time to sock away a little extra money in your 401k if you can afford it. Think of this as a 25% discount or match. This is not the end of the world, markets will come back in a year or two.

If you needed the money in the near term and you were still heavily invested in equities, uh... that was a mistake.

Daytrader? You do your thing.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#164

Post by polote »

gdubs wrote: post #13

As the joke goes, a trillion here a trillion there and pretty soon you're talking about some real money! But in seriousness, the next week is a critical time in the world. I remember sitting in an airport when news of Lehman Brothers collapse was flashing on the TV screens. I'm reminded of that time. We learned later about how Hank Paulson got down on one knee and begged Nancy Pelosi to go along with is plan to save…

> The lack of testing will maybe turn out to be one of the biggest scandals of my lifetime.

Testing more people is not going to change anything, this virus is so easy to transmit that we should take for granted that we will catch it anyway.

What we can do instead is realize that we are facing something big and protect vulnerable people from it by asking them to stay at home and create a system to send them food safely, it is almost useless to prevent healthy and young people to work as it will just block the economy/transportation/health work/everything

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#165

Post by m0zg »

whatshisface wrote: post #110
tic_tac wrote: post #108

Earlier quoted context omitted.

You can't just conjure the necessary tests up from nothing. Japan has also had problems with testing. No one is trying to "deny testing". It is a work in progress and is indeed ramping up.

The FDA had a ban on tests outside of the CDC's tiny supply for a long time. That's whats being referred to by "denying testing." Not a political issue so much as a typical bureaucratic slowdown with very real consequences.

Could be a political issue as well. The deep state within CDC and FDA is likely sabotaging the first response. I see no other explanation for why, 2 months after things started blowing up in China, we _still_ don't have widespread testing in what I thought was the most technologically advanced country in the world, and moreover, are _refusing to import the working solution_. Heads should most definitely roll for this after things subside.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#166

Post by Loughla »

paulmd wrote: post #140
tic_tac wrote: post #108

Earlier quoted context omitted.

You can't just conjure the necessary tests up from nothing. Japan has also had problems with testing. No one is trying to "deny testing". It is a work in progress and is indeed ramping up.

The WHO actually had tests that worked. CDC refused those and chose to independently redevelop their own. Then those didn't work, they still kept trying, while also blocking states from using their own tests that also worked. https://www.propublica.org/article/cdc-coronavirus-covid-19-... The states with "local outbreaks" (NY, CA, WA) are the ones that told the CDC to get bent and did it anyway. It's everywhere, the…

>The states with "local outbreaks" (NY, CA, WA) are the ones that told the CDC to get bent and did it anyway. It's everywhere, the states with low case numbers just aren't testing for it.

This is what I can't get people around me to understand.

No cases near me simply means no one has been tested for it at this point.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#167

Post by 01100011 »

dev-ns8 wrote: post #17

Speculation on my part as I still don’t fully grok repo markets and only have a vague sense of how the treasuries market impacts equities but I’ll continue. I see some people saying this should alleviate some of the losses incurred by the recent market crash. I however, don’t see how that is the case. To me this seems like a move from the fed to make sure we don’t enter into a liquidity crisis which doesn’t necessari…

Will the fed's move fail to move asset prices higher but also cause inflation? If they're only making funds available for short-term loans, I'd figure neither equities or inflation will be significantly affected by the fed actions today.

I would not be surprised if we see inflation though. The virus is going to lower productivity due to all the extra overhead. Prices in many areas will probably go up even as the economy stalls. Hopefully the governments react appropriately.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#168

Post by paulmd »

mdszy wrote: post #83

Universal healthcare? Too expensive. $1.5T to bail out wall street? Sure!

this isn't spending, it's overnight loans to keep the market from seizing up if everybody's so panicked that nobody will let loose of their cash even for a "sure bet".

but as to your general sentiment, yeah, you're right, we've blown $1.5T on dumb bullshit like new military spending and a wall that mexico is going to pay for and yet we can't find any money for universal healthcare even when people are dying in the streets. Even when it would likely reduce healthcare spending.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#169

Post by cryptica »

munk-a wrote: post #32
taiwanboy wrote: post #30

Earlier quoted context omitted.

This is to help an otherwise very healthy US economy (low unemployment rate, solid gdp growth, income increases) from being taken down by an one time external, expiring event and panic that flows from it. What is the point not supporting crucial companies in the stock market? Are you really better off if target or chevron or Hilton goes under? And tons of people have no jobs and there no access to staples?

Unfortunately the US economy isn't very healthy - it's over-leveraged on debt and has been artificially propped up by cash injections into the market. In actuality this recession may be caused by corvid-19 but it was ready to go at the first serious economic hiccup.

I think if anything, the Fed was probably overjoyed about COVID-19; they were just waiting for an excuse to do a massive cash injection without sparking massive backlash and protests.

The new rules against gathering in large crowds are an added bonus; the Fed is not only excused, they are legally protected from any possible backlash.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#170

Post by breakyerself »

A4ET8a8uTh0 wrote: post #156
tw04 wrote: post #69

Earlier quoted context omitted.

>But if there were ever a time for us not to be partisan and tribal, it's now. You say that like both parties are trying to deny testing and are refusing to provide the social safety net for workers to stay home when they're sick. This is very much not a "both sides" discussion. This is: the GOP needs to stop trying to pretend like nothing is wrong and actually DO SOMETHING to prevent this from becoming an even bigge…

I think you allowed yourself to become overwhelmed with emotions. Both groups, and that is despite news that some of their own are infected, are playing games. It is silly to pretend it is just GOP. edit: spelling

Republicans are playing games to get bailouts for corporations. Democrats are playing games to get people healthcare and paid sick leave.
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