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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

#251

Post by sg47 »

oxymoran wrote: post #72
asickness231 wrote: post #35

"inject 1.5t" by that do they mean a 1.5t panic bailout for wall street? how can we find 1.5t in the budget but no money for universal healthcare, student loan forgiveness, ubi etc. The markets wouldn't be so important if there were a safety net.

This isn’t a bailout for wall street, it’s an attempt to bailout the economy as a whole because there isn’t enough money in the banking system to cover the institutional sell off. In other words, they had to do this to prevent a run on the banks which would royally fuck everyone.

Yes, because banks are over-leveraged. Regulations that kept leverage in check have been overturned by the GOP.

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

#252

Post by sg47 »

tomp wrote: post #242
munk-a wrote: post #44

Earlier quoted context omitted.

Yea, dollars put into student loan forgiveness actually pay themselves off many times over due to the high velocity of cash in the hands in young people - money injected into the market has a comparatively low velocity and tends to just get exported overseas.

Why would you forgive student loans? That way you reward incompetence. Instead, you should give each young person $300k - some would repay their student loans, others (who were more prudent with their choice of education) would have down-payment for a house or something... Forgiving just the student loans would create massive perverse incentives.

Just like the bank bailout?

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

#253

Post by spaced-out »

rcar wrote: post #147
spaced-out wrote: post #75

Earlier quoted context omitted.

I tried to click your Propublica link because I want to see their numbers, since the wiki article on TARP points out that the "profit" the government made comes out to a 0.6% annualized interest rate, so once you take inflation into account the government actually lost money. https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program

The Propublica link includes both TARP and the government's investments in Fannie/Freddie, which provided heavy dividends and is where a large portion of the profits have come from. That aside, the common misperception of TARP is that the government gave away $400+B of taxpayer money, which is a very, very far cry from a small inflation-adjusted loss.

>the common misperception of TARP is that the government gave away $400+B of taxpayer money

I don't think this is a common misconception, I think it's a strawman argument to deflect criticism of the bailouts.

Regardless of whether or not the government made money, we created a massive moral hazard by allowing banks to engage in shady behavior, avoid any criminal prosecution, get below-rate loans to avoid the market consequences of their actions, and left the common people out in the cold.

On top of that, we supposedly fixed the problem by expanding banks' reserve requirements, but when they got into trouble in the repo market, the FED runs to their rescue with even more below-market-rate loans, which seem to get larger and larger by the week.

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

#254

Post by munk-a »

tomp wrote: post #242
munk-a wrote: post #44

Earlier quoted context omitted.

Yea, dollars put into student loan forgiveness actually pay themselves off many times over due to the high velocity of cash in the hands in young people - money injected into the market has a comparatively low velocity and tends to just get exported overseas.

Why would you forgive student loans? That way you reward incompetence. Instead, you should give each young person $300k - some would repay their student loans, others (who were more prudent with their choice of education) would have down-payment for a house or something... Forgiving just the student loans would create massive perverse incentives.

Because those student loans were made in bad faith to people who were too young to realize how badly they were being exploited and how meaningless their education was - for clarification I've paid off all of mine, and I'm still happy to see zero benefit out of this expenditure because it'll be just and help the economy.

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

#255

Post by spaced-out »

zaptheimpaler wrote: post #241
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…

Slight tangent, but the excessive focus on tests is misguided. The tests give us more data but make little difference unless they are used to rapidly trace outbreaks and quarantine entire areas, which just has not happened. And with something this viral, its only a matter of time before it spreads everywhere. The focus needs to be on slowing the spread and treatment. The treatment is about supporting the body while i…

>Slight tangent, but the excessive focus on tests is misguided.

The issue with our lack of testing is that we have no idea what we're dealing with, which is a big part of why the market's freaking out. If we had been ramping up testing months ago, when it was already a massive disruption in China and should have been clear that it was only a matter of time before it got to the US, then we would have a lot more information now.

This is why we need competent administrators running things like the CDC, the DoE, Homeland Security etc..., not political hacks.

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

#256

Post by rndmize »

altec3 wrote: post #104
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 what gdubs was trying to get across is that sure, there are problems, people to blame, etc. but now is not the time. We have to get our act together and handle the situation. We can't have petty fighting betweeen parties. Now is the time to unite and act. We can fight, argue and point fingers once this is all behind us.

The fighting between the parties hasn't been petty for years now. It's frequently a disagreement on basic factual information. Solving problems is something that can be done when everyone understands and agrees on what the problem actually is.

I don't expect to be able to craft useful public health policy in discussion with an antivaxxer or space exploration policy with a flat earther – the idea of "unite and act" is be absurd when dealing with people who lack the ability to admit they can be wrong/consider multiple perspectives/think critically. And yet that's basically where we stand today politically.

> Fact-checkers and scientists have scrambled to correct the misinformation coming out of the White House. (No, the virus has not been “contained” in America; no, testing is not available to anybody who wants it; no, people shouldn’t go to work if they’re sick.) But Trump’s message seems to have resonated with his base: A Quinnipiac University poll released this week found that just 35 percent of Republicans are concerned about the virus, compared with 68 percent of Democrats. [1]

If the other side doesn't even agree with you this is a problem that needs serious attention to be solved, how are we going to get our act together?

[1] https://www.theatlantic.com/politics/archive/2020/03/trump-c...

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

#258

Post by gen3 »

TheSoftwareGuy wrote: post #67
adaisadais wrote: post #51

Earlier quoted context omitted.

We have a fiat currency. The Government creates “money” whenever it pleases. The money is “Backed by the full faith and credit of the United States”. I completely agree that in the long term this is completely faulty and just helps to exacerbate the underlying causes of economic crisis. But our government (typically) does not act in long-term interests. We as a people do not hold our politicians accountable.

>The money is “Backed by the full faith and credit of the United States”. I'm pretty sure its treasury bonds that are "Backed by the full faith and credit of the United States". Dollars are backed essentially by what you can buy with them.

The US dollar was at one point backed by a gold and silver standard, meaning that you could always go redeem the cash for a specific amount of the metal. After the Great Depression the US moved away from the standard, backing the money with the faith in the US government.

This is why each note has “Backed by the full faith and credit of the United States” printed on it.

https://en.m.wikipedia.org/wiki/History_of_the_United_States...

https://www.reference.com/business-finance/backs-up-currency...

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

#259

Post by ghufran_syed »

zaptheimpaler wrote: post #241
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…

Slight tangent, but the excessive focus on tests is misguided. The tests give us more data but make little difference unless they are used to rapidly trace outbreaks and quarantine entire areas, which just has not happened. And with something this viral, its only a matter of time before it spreads everywhere. The focus needs to be on slowing the spread and treatment. The treatment is about supporting the body while i…

Funny how many people think "they were too slow with testing" - do any of these commentators have any idea how long it takes to develop a reliable, sensitive and hopefully specific test for a virus that probably didn't exist in its current form until around 3 months ago. Oh, and then also to be able to make a production line capable of producing millions of them while maintaining quality - why not criticize them for not yet developing an effective antiviral treatment and vaccine for the condition too?

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

#260

Post by ceejayoz »

chrisco255 wrote: post #250
ceejayoz wrote: post #195

Earlier quoted context omitted.

Taiwan and Singapore appear to be containing it thus far. China, too, if you can trust their numbers, and South Korea's look positive after a big starting spike. Each of these countries took early (except for China, but they shut down Wuhan with fewer cases than the US has now), aggressive steps that should be considered a model for others.

South Korea has 8,000 active cases, over 114 today alone. Singapore has a population of 5.8M. They've got 178 cases. The U.S. has a population of 320M with 1338 cases. That means their infection rate is nearly 10x higher than the U.S. Meanwhile, we are taking action. Shutting down European travel, Chinese travel, cancelling schools, cancelling NBA season, NHL season, etc, etc...We are taking aggressive steps.

> That means their infection rate is nearly 10x higher than the U.S.

No, it probably doesn't. It probably reflects the fact that we're not finding folks, because we're not testing enough.

Ohio's (Republican, incidentally) governor, for example, is stating that their five confirmed cases likely indicate 100,000 undetected in the community so far: https://twitter.com/GovMikeDeWine/status/1238177953126604801

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