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Federal Reserve slashes interest rates to zero

washingtonpost.com

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Re: Federal Reserve slashes interest rates to zero

#221

Post by dmix »

ummonk wrote: post #209
sershe wrote: post #181

At this point, I'm actually starting to wonder. If we literally do nothing about the virus, or do the bare minimum, the worst case scenario based on the numbers I hear is 7.7b * 0.6 (total infections) * 0.02-0.03 (presumed mortality rate after the healthcare system collapses MINUS the rate if it doesn't), ~115m people are going to die worldwide. This appears to me to be the absolute worst case scenario given current…

> At this point everybody seems to admit it's beyond containment and the only thing we are trying to do is flatten the curve and prevent the deaths. No. Only the UK is operating on that fatalist assumption. South Korea, China, Taiwan, and Singapore have all successfully contained it, and Italy is starting to do so as well.

I keep hearing this is the UK policy on HN but it’s been repeatedly denied by the authorities? The UK’s reactive containment policy is also what almost every country is doing as well, even in Europe, besides a few exceptions like Italy and Spain who have way higher rates. For one thing the UK has already announced harsher law enforcement policies than what we have here in Canada.

> Matt Hancock insists 'herd immunity' not part of government's plan for tackling coronavirus

> Mr Hancock added: "Herd immunity is not a part of it. That is a scientific concept, not a goal or a strategy. Our goal is to protect life from this virus, our strategy is to protect the most vulnerable and protect the NHS through contain, delay, research and mitigate."

https://politicshome.com/news/uk/health-and-care/illnesstrea...

Re: Federal Reserve slashes interest rates to zero

#222

Post by pdovy »

mcphilip wrote: post #36
aazaa wrote: post #15

The 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…

Interesting that S&P futures have fallen 3% as of 5:00pm in Asia. Are markets interpreting this less as the Fed signaling it will do whatever it takes and more as the Fed is panicked and the financial system is under a huge amount of pressure behind the scenes? Edit: S&P futures limit down at 5:15.

IMO the severity of the situation and the economic fallout has become more clear over the weekend as more states have issued broad orders regarding school/restaurant/bar closures and limits on public gatherings.

Ultimately the Fed can give a lot of help here, but can't fix the underlying problem. Easing credit for businesses will help get some through to the other side but it won't replace lost revenue.

Things are going to be very volatile for the foreseeable future. Non-Farm Payroll data released in a few weeks time would have had the househould sample conducted last week, so we may not know the full impact on unemployment until May, realistically.

Re: Federal Reserve slashes interest rates to zero

#223

Post by shreyshrey »

aazaa wrote: post #15

The 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…

Let us say hypothetically the congress approves FED to buy stocks and ETF. Just curious what will they buy: s&p index, total market index or something else.

Let us say if they buy one index, will it be fair for companies who are not in the index?

Re: Federal Reserve slashes interest rates to zero

#224

Post by deelowe »

Amygaz wrote: post #197
deelowe wrote: post #160

Earlier quoted context omitted.

Didn't one model show over 100M?

No. That would imply 100% infection, at a base reproduction rate of 15 (close to measles), and a mortality rate of 30% (close to Ebola). If left unchecked covid-19 would infect 100-250 millions Americans. The R0 is 2.5-3. The average mortality rate is said to probably be closer to 1% rather the 3.4% previously advanced, so 1-2.5 millions deaths, which we will hopefully never reach if people follow the current social…

Thanks

Re: Federal Reserve slashes interest rates to zero

#226

Post by drcross »

nimblegorilla wrote: post #199
sershe wrote: post #181

At this point, I'm actually starting to wonder. If we literally do nothing about the virus, or do the bare minimum, the worst case scenario based on the numbers I hear is 7.7b * 0.6 (total infections) * 0.02-0.03 (presumed mortality rate after the healthcare system collapses MINUS the rate if it doesn't), ~115m people are going to die worldwide. This appears to me to be the absolute worst case scenario given current…

Sidestepping the issue of how much a human life is worth you are also missing that the death rate would skyrocket if everyone gets sick and needed treatment at the same time.

It's also ignoring the fact that no one can be sick from any other cause during the next nine months because hospitals will be at capacity.

Re: Federal Reserve slashes interest rates to zero

#227

Post by selimthegrim »

rogerthis wrote: post #217
sershe wrote: post #181

At this point, I'm actually starting to wonder. If we literally do nothing about the virus, or do the bare minimum, the worst case scenario based on the numbers I hear is 7.7b * 0.6 (total infections) * 0.02-0.03 (presumed mortality rate after the healthcare system collapses MINUS the rate if it doesn't), ~115m people are going to die worldwide. This appears to me to be the absolute worst case scenario given current…

Poster probably not human.

That’s far from the most inhumane post I’ve seen on HN

Re: Federal Reserve slashes interest rates to zero

#228

Post by selimthegrim »

isignal wrote: post #189
sershe wrote: post #181

At this point, I'm actually starting to wonder. If we literally do nothing about the virus, or do the bare minimum, the worst case scenario based on the numbers I hear is 7.7b * 0.6 (total infections) * 0.02-0.03 (presumed mortality rate after the healthcare system collapses MINUS the rate if it doesn't), ~115m people are going to die worldwide. This appears to me to be the absolute worst case scenario given current…

There's a billion people in India and so far the mortality and spread rates there aren't similar to other countries. There is a theory that humid and warm places will not have these mortality rates (as validated by our common sense that summer time flu is less common). I don't think we have enough information about the virus to generalize to the whole world yet.

We have an explosion of cases in New Orleans. I don’t think we’re off the hook

Re: Federal Reserve slashes interest rates to zero

#229

Post by dcftoapv »

bcrosby95 wrote: post #155
dcftoapv wrote: post #85

Earlier quoted context omitted.

Look, I don't want to be alarmist, but the worst outcome here is not '08. It's the 1930s. This has caused material demand and supply side shocks that we haven't seen in my lifetime or my parents' lifetime. I'm likely on the younger side of the hacker news demographic and I still believe that this is the right action to take at this moment. We might be stuck paying it off for awhile, but I would rather deal with an in…

It's foolish because it's literally impossible to avoid a heavy recession or depression when people are told to stay inside and do nothing. The odds of this action working out well now are slim to none. Then when it's actually needed they will have to do it again. You'll end up with the same non recovery recovery where people are barely getting by but certain asset classes are inflated to the moon.

No, it's not foolish. We need to keep markets liquid to avoid a lending crisis. That's why the fed announced asset purchases. They don't do them all at once. They buy steadily over a period of time to help keep prices stable. That's very important.

They had to do rate cuts now because it takes a long, long time for them to work (measured in years rather than months). That was a preventative measure, not a band-aid.

Look, guys, I promise you the fed knows wtf they're doing. These guys live and breath to be ready to respond to these type of emergencies.

We should be far more worried about (the lack of) policy responses from DC. DC has no idea wtf they're doing, and it shows.

Re: Federal Reserve slashes interest rates to zero

#230

Post by shartshooter »

Stopping production for a significant period of time was the first gut punch covid is throwing. The second one seems to be landing on Europe and third will be North America.

This means China will have a head start on getting supply up and running.

If the ROW is at a standstill in production, China will fill that gap which could further displace a lot of production in the west.

China getting containment in order didn’t bounce back but also bounce ahead in many places.

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