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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

#321

Post by a_tractor »

yumraj wrote: post #14
bryanlarsen wrote: post #11

Earlier quoted context omitted.

The answer would be something like "Increasing the money supply has been very successful at mitigating previous recessions without causing inflation." Unfortunately, previous recessions were caused by demand-side shocks. So increasing the money supply increases demand and mitigates the deflation that usually accompanies a demand driven recession. It's not clear whether the upcoming recession is supply or demand drive…

> If it's a supply shock recession, they usually come with significant inflation and more money will make it a lot worse. Surely in the beginning, with just China impacted, that was the case. But right now with a global pandemic it's not clear if its a supply shock, or both. Curious, if supply is lower and the demand lowers more, then what does it mean. A depression??

>Curious, if supply is lower and the demand lowers more, then what does it mean. A depression??

Seems like break even?

Its kind of like how a person who normally works out everyday and is very active might reduce their caloric intake if they break their leg. From 4000 calories a day to maybe 2000 very suddenly might sound like a problem if he wasn't just gonna be sitting at home all day for a while.

But obviously its more complicated than that, and the system we are talking about is not even close to organic, and in a more equivalent scenario the guy with the broken leg sitting at home is also no longer able to harvest his crop for the season to provide the food a local village depends upon, so...

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

#323

Post by ksec »

ChuckMcM wrote: post #175
A4ET8a8uTh0 wrote: post #156

Earlier quoted context omitted.

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

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…

So what is the term for leadership makes moves that benefits the company but not gain interest on their own or even hurt their own reputation / interest ?

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

#324

Post by amznthrowaway5 »

RobRivera wrote: post #25
glofish wrote: post #2

If you print $100 in your basement it is counterfeiting, punishable with 25 years in prison. If you print 1 trillion as a banker it is called" "a bold initiative to calm market tumult".

This is a misrepresentation of the complexities of financial services, monetary, and fiscal policy. Say what you will about the carelessness of risk-taking, shortterm thinking of the banks, but please don't misrepresent reality

Same nonsense we were told in 2008. The financial stuff is far too complicated for us mere mortals to judge, leave it all up to the bankers. All of this despite the fact that economics is a corrupt pseudoscience.

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

#327

Post by dchyrdvh »

kamaal wrote: post #313
34679 wrote: post #145

Earlier quoted context omitted.

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?

As long as other countries use dollars, it's the US that's got 15T worth of goods more. These 15T buy entire tankers of oil, metals, minerals and goods from other countries and this is what matters.

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

#328

Post by aliswe »

lisper wrote: post #19
aliswe wrote: post #10

Not saying that fiat money is necessarily a good idea, and not clamping down on gold standard currency, or anything, but the article doesn't say that the money would be printed. If I'm not mistaken. If what the mostly conspiratpry documentaries say is true, then the Fed lends "the state" money (at interest) which is then needed to be paid back. That would mean that the Fed probably has money reserves on its own.

I think you may have some basic misunderstandings of how money works in today's world. All money is debt, which is to say, it's a ledger entry that gives the holder a claim on future productivity. Whether that ledger entry is purely electronic or rendered onto a physical artifact (a coin or a bank note) is irrelevant. At the end of the day it's all just bookkeeping. The national debt is the money supply. The key to n…

That may very well be. So correct me where I'm wrong here.

The Fed prints (or issues) currency, lends it to "the state" at interest.

The state eventually pays at least a part of that money back.

All I'm assuming is that if that paid money doesn't vanish, then the Federal reserve will have a Federal reserve containing that money.

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

#329

Post by HSO »

nie100sowny wrote: post #244

Coronavirus is not a cause, but it is just an igniter. The true cause of a crisis is pumping money into institutions which should bankrupt years ago. Pumping because we were too much afraid of normal crisis back then and now we get that crisis, but multiplied by 10 in terms of impact and time period. Crisis is good in economy. It let big, old and damaged trees to fall and to give more sun light to small healthy trees…

Finally.

I agree with you!

Need to see wood not just trees.

That's also why I'm so triggered all the time when some bozo talks about "recession risk" again as if that was the problem.

This is a systemic crisis (in fact, my bet is on system collapse) and it's been years in fact decades in the making. If it hadn't been "coronavirus" hysteria it would have been something else to ignite the tinderbox.

Good riddance. It's kind of inconvenient for me personally but I think the system is stupid, evil and not accessible to reason or even pleading for change. As long as some portion of people can happily profit from status quo, they ride roughshod over everybody else and compensate their conscience with meaningless social wokeness and virtue signaling on IG/Fakebook.

Let the system burn down, maybe then people will listen to reason.

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

#330

Post by tzm »

spaced-out wrote: post #255
zaptheimpaler wrote: post #241

Earlier quoted context omitted.

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 inform…

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

During H1N1 in 2009, within 30 days we tested 1 million people. This led to a vaccine developed within 6 months. Testing is core to understand spread.

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