Bank runs are coming. We are witnessing financial collapse and possibly the early failure of the American empire. Futures trading was halted today. Market will tank tomorrow. That's after a $1.5T stimulus. This is it.
Federal Reserve slashes interest rates to zero
141–150 of 319 posts
Re: Federal Reserve slashes interest rates to zero
#142Earlier quoted context omitted.
Ironically, much of the tax advantage of owning vs renting is embodied in the mortgage interest tax deduction. If there were no interest, obviously it would be a good deal, but would not have the additional benefit of tax avoidance that it does at present.
Much of the tax avoidance from primary residence property has been removed from the tax code already due to the TCJA. Not all of it, but most of it. It also makes no sense to have a mortgage for the tax break. Rentals have depreciation and the interest remains deductible as an expense on them there, so that isn't really an issue.
Regarding tax avoidance from primary residence, what specifically? I can still deduct mortgage interest. Are you talking about not itemizing some home ownership expenses (like what?) because standard deduction increase? Just wondering what I’m missing..
Re: Federal Reserve slashes interest rates to zero
#143Earlier quoted context omitted.
Came here to reply with the same thing. Not sure who is downvoting me but my guess is people who weren't around back in '08 or are significantly out of touch with US economic policy (or general econ policy, that is). If you've downvoted me then you probably need to watch this: https://www.youtube.com/watch?v=PHe0bXAIuk0 . This is a wet band-aid.
We really need band-aids now, like in 2008. The problem is not the band-aid now, the problem is that we did not rip it off in the good times but instead spent all the money in irresponsible tax cuts for people that didn't need them.
No. We don't. We need more emphasis on value vs. growth. In what world is WeWork's valuation sustainable.
Also who the hell is downvoting me? LOL. If you downvote, please comment here so we can debate. I'm dying to see you defend the bull market case (even sideways to slightly up which would be best case scenario).
Re: Federal Reserve slashes interest rates to zero
#144Earlier quoted context omitted.
> Do you have a source for 80-90% collapse in China? That sounds way high I live in Shanghai. It normally takes about two weeks for things to go back to normal after Lunar New Year ends, which was two months ago. Things are not yet back to normal. Maybe 30% of office workers are back at work, 50% maximum. Gyms, bars, restaurants are almost all still closed. The dental hospital is still closed. You can basically write…
If you write off 2 months out of 12 months, that's a 17% decrease.
I said China’s economy collapsed 80-90% in the LAST month
Re: Federal Reserve slashes interest rates to zero
#145The Fed can, and will do much, much more. The signal here should be read as "whatever it takes to avoid a depression." Among other steps, this is likely to mean: - Negative-yielding long-term treasuries - Direct purchase of stocks or ETFs, which would require congressional approval. Expect the discussions to start soon. The steps already taken and the ones to be taken will create financial manipulation on a scale nev…
If the Fed loses this fight, game over. This isn't the Fed's fight. Monetary policy won't fix this.
I'm sort of surprised they didn't try to push the issue from the bottom. give every tax filer some amount of money say, $200. A bonus for each dependent, say, $100.
pulled numbers absolutely out of thin air.
I thought the issue was money sloshing around at the bottom, a couple hundred bucks can be a big deal when you're out of work.
Ah well, I'm sure the experts have it well in hand.
Re: Federal Reserve slashes interest rates to zero
#146Earlier quoted context omitted.
Game over is an exaggeration. There’s 3.4 trillion sideline cash. China’s economy collapsed 80-90% in the last month and will take months to recover, on top of exploding debts. Japan and Germany was in recession before coronavirus hit. On the other hand, US was growing a steady 2% and had record low unemployment before this. If US can flatten the curve, with only ~3000 cases thus far, US will recover quickly and come…
Do you have a source for 80-90% collapse in China? That sounds way high. Also 3000 confirmed cases does not mean 3000 actual infections. Depending on the model, the expected number is orders of magnitude higher.
> Also 3000 confirmed cases does not mean 3000 actual infections.
That's exactly what it means. 3000 cases of positively identified infections in individuals, if you want to get more wordy. Some of those have recovered, some have died. Still the number is over that today.
Re: Federal Reserve slashes interest rates to zero
#147Earlier quoted context omitted.
The feds mandate is to maximize employment, stabilize prices, and moderate long-term interest rates. A big part of that is trying to avoid the 'bust' part of a boom-bust cycle. As evidenced by your post, the fed should not be accountable to the public because the public cannot be expected to spend anytime trying to understand what they do and their methods of action.
The Fed should just hire all citizens in the country as employees. That would be a more efficient way to maximize employment.
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Re: Federal Reserve slashes interest rates to zero
#148My "high interest" savings accounts already took a recent haircut and this will accelerate that. I understand that's the idea: make investing attractive and savings unattractive. But for a regular joe like me, this is exactly the time I want to be saving more so it stings.
I moved some of my high yield savings account into a 12 month CD recently to maintain a more tolerable interest rate for the next 12 months while the savings account interest rate inevitably tanks. That means I can't touch it for 12 months if I want the interest, but I was careful with the amount I put in the CD so that I will most likely not have to touch it. This should in no way be construed to be advice because I…
Some banks have “no penalty” CDs that allow you to close them in the event that you need the money without taking a hit on any accrued interest. And this can happen as early as 7 days after opening the account. So the risk is very low. They’re slightly less yield than regular CDs, but not much.
A really good option during this time. My bank actually sent an email prior to the last interest rate drop, and I moved most of my savings (that I didn’t think I’d need to touch for a year) into an 11-month CD before the rates dropped.
Re: Federal Reserve slashes interest rates to zero
#149Earlier quoted context omitted.
If a bank had reserves before now is the time to use them. In a few months they need to rebuild those reserves for whatever is next.
If they didn't use them before, why would they use them now? Pushing the string. Can't fix fiscal policy issues with monetary policy. Helicopter money is all that's left, but that requires a functioning legislature, so we’ve already lost.
They didn't use them before because it would have been illegal. The Fed has mandated a 10% liquidity for all major banks.
See: https://www.federalreserve.gov/monetarypolicy/reservereq.htm
Re: Federal Reserve slashes interest rates to zero
#150Earlier quoted context omitted.
Don't know why this is downvoted. Cutting interest only benefits the wall street in the next couple months. Basically this admin only knows two things: 1, Cut interest rate 2, Cut tax And it doesn't care if the world explodes after they step down.
Most republican administrations have displayed that "get mine and get out" behavior--causing recessions--since Teddy Roosevelt.
Well Clinton did preside over the dot com boom, leaving Bush to clean that up. He was the first democrat to be president since Carter. Not sure your thesis is very strong there as it depends upon an arbitrary duration, a nebulous criteria and an implication that democrat admins have behaved differently (based on same nebulous criteria). In reality, policies of presidents can be very loosely coupled to outcomes during their time in office. Clinton’s policies, for instance, are not insignificantly indicted by the mortgage crisis as well, but just because the chickens didn’t come home to roost before he left office doesn’t prevent us from seeing that. There’s a long tail to policy decisions for better and worse.