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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

#311

Post by fragmede »

tropdrop wrote: post #299
Jommi wrote: post #271

Earlier quoted context omitted.

Which test? What kind of distribution did that test have? What kind of distribution capacity did that test have? What kind of false positive rate?

Classic "the [solution] that exists isn't good enough, therefore we can't use it at all!" A pandemic is not the time to be picky - if anything, a high false positive rate helps . Would you rather 10 people quarantined, of whom only 2 are sick, or all 10 released into the wild because no test kit (of any sort) was available?

To be fair, a test with high false-negative rate would be problematic. 10 people released into the wild, who think they don't have it, is worse than 10 people released into the wild who are uncertain about their status.

Not saying that's what happened here (perfect is the enemy of the good!), just that it could be worse. It could always be worse.

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

#312

Post by fragmede »

sequoia wrote: post #207
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…

- We need to unite and overcome tribalist instincts - The GOP (the current ruling party) bears a majority of the blame for the recent screw ups (though _both_ parties are to blame for the decades-long problems with the healthcare system) Both things are true.

The Democrats tried to give us healthcare and the GOP has systematically dismantled it as best they could. I'm not saying the Democrats are perfect, but one of these things is not like the other.

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

#313

Post by kamaal »

34679 wrote: post #145
kylebenzle wrote: post #139

Earlier quoted context omitted.

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.

There is at least one other way to look at it. These loans will primarily, if not exclusively, go to large financial institutions. Due to the wonders of fractional reserve lending, those institutions will get to loan out several multiples of the original $1.5T. Another way to look at it is that they've probably "printed" closer to $15T.

How does this work? Like any government can just print their way to prosperity?

I mean you just magically put $15T into circulation?

Won't this lead to inflation?

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

#314

Post by chrisco255 »

ceejayoz wrote: post #309
chrisco255 wrote: post #295

Earlier quoted context omitted.

Look, we can only debate about confirmed cases. You can speculate as to whether there are more or less undetected in one country or another but that's just going to be a bunch of hypothetical posturing leading nowhere.

A country 1/7 our size has done 25x the testing. If you don't think that affects how our numbers net out, I'm not sure we can have a rational discussion beyond here.

Source?

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

#315

Post by a_tractor »

paulmd wrote: post #168
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 st…

>even when people are dying in the streets

And this is happening where, exactly? Are you talking about heroin addicts or something?

>military spending

You are talking about >the wall

Less than $5B was appropriated for the border wall and border security, which represents an aspect of national defense which is about as basic and fundamental as the concept of an independent nation itself.

So, clearly, the vast majority of the rest of that $1.5 trillion budget is going to other "dumb shit" that is even less important than the most foundational purpose of state government but you haven't bothered to mention what, for some reason...

>Even when it would likely reduce healthcare spending.

For who? How likely? How much would it be reduced? What do we have to give up in exchange? You do know that giving full control of your personal healthcare and a larger portion of your hard-earned income over to a bloated and corrupt bureaucratic state (that has proven time and time again to put the interests of the state over and above that of the nation/people it is mandated to serve, to the extent that the idea of replacing American citizens with a completely foreign population is seen as a viable avenue in pursuit of its own expansion and preservation) isn't the only way to reduce the price of healthcare, right?

Universal healthcare in a country where people like you wish to basically dismantle our national defense and allow open borders is just about the fastest way to national ruin I could ever imagine. Just stone cold stupid.

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

#316

Post by gumbo »

tomp wrote: post #298
gumbo wrote: post #289

Earlier quoted context omitted.

Genuine question here. Any data on the typical duration of these loans? How long typically the Fed holds collateral? I remember 2 years ago the market throwing a tantrum because of the fed unwinding it balance sheet. Doesn’t that mean that typical loans are never repaid and the Fed just let the bonds mature?

I think the "unwinding" was Fed stopping QE, which is slightly different - they were buying bonds on the market (not as emergency liquidity) to prop up asset prices (buy bonds -> reduce interest rate -> investors seek other sources of returns -> buy stocks -> stock prices go up... same with real estate). Bonds mature (literally disappear), so if you want to keep propping up asset prices, you must keep buying new bond…

Got it thanks. Still, any data on how long a typical repo loans is?

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

#317

Post by throwawaymanbot »

another financial Coup ..The tax payer pays for cheap almost free loans for the Richest of the rich. Laughable. They are ruining the system. It will ultimately collapse. CoronoaVirus and its effect on the Western system, is just a coming tiny taste of what will happen when they ruin it totally.

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

#318

Post by nmfisher »

mamon wrote: post #203
ChuckMcM wrote: post #175

Earlier quoted context omitted.

I think it is a bit more nuanced than that. My experience in large enterprises are that there are two kinds of "politics" that get played. In one form, the leadership makes moves or take actions that benefit themselves but also help the company. Often that is called out as "leadership." In the other form, the leadership makes moves or take actions that benefit themselves but hurts the company. That form is called "po…

>> For example a CEO that buys another company, the result of which is hitting a milestone that triggers a big bonus for them but saddles the company with a bunch of debt and expense that drags down its productivity. That is bad. Versus the same example where the CEO buys another company and the combination results both in them getting a bonus as well as the combined company doing better than the sum of the individua…

> Mergers are always risky. CEO can do all the analysis possible but can't know for sure if combined company will do better or worse than individual parts. That part of the job is called "taking calculated risks".

True, but growth-by-acquisition is a lot "easier" than organic (R&D-driven) growth, particularly when money is cheap.

A CEO looking for a quick win - usually quarterly, sometimes annually - will almost always default to an acquisition. It won't be clear for at least 2-3 years whether or not it was worthwhile.

I think a CEO who spurns acquisitions in favour of organic R&D will always, almost by definition, be putting the company's interests ahead of his/her own.

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

#319

Post by rjbwork »

0xcafecafe wrote: post #141

As I understand, they stepped in to bridge the bid/ask spread and act as a temporary market maker to solve a liquidity crunch. Can someone more knowledgeable tell me why the bid ask spread is so wide to begin with?

Probably because the people wanting to loan the money don't think the people wanting to borrow the money are going to be able to pay it back, so they're charging larger interest rates to compensate them for the risk. That's really all the interest rate is.

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

#320

Post by rlt »

nathancahill wrote: post #158
golergka wrote: post #129

Earlier quoted context omitted.

Just a reminder, "bailout" is loans, not gifts. US government got it's 2008 bailout money back with interest.

If we're getting in to the weeds on the ebb and flow of money to and from the government, universal healthcare saves the government money rather than costing it money.

I'm genuinely curious what evidence there is for this?
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