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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

#241

Post by allovernow »

HenryKissinger wrote: post #237
allovernow wrote: post #141

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.

This comment won't age well. No bank run is coming, and we are not witnessing financial collapse, nor the failure of the American empire.

The fed had now pushed one $1.5T stimulus package and lowered rates to zero in an absolutely desperate attempt to prop up a market when the entire country is about to shut down - what are they propping up when no one is going to spend any money?

Don't believe me? China. Iran. Italy. Spain. Austria. Multiple Nordic countries. Nationwide shutdown. Coming to a state near you.

300MM people just panicked at the same time, and the stores have been empty for two days. Imagine what's going to happen when they all discover fractional reserve banking.

Re: Federal Reserve slashes interest rates to zero

#242

Post by jpster »

jfoutz wrote: post #145
inferiorhuman wrote: post #43

Earlier quoted context omitted.

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.

Yes. I hope Powell (who seems bad at his job) has Bernanke on speed dial. Ben understood helicopter money. https://www.investopedia.com/articles/personal-finance/08221...

Re: Federal Reserve slashes interest rates to zero

#243

Post by webninja »

shreyshrey wrote: post #223
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?

They’d sooner shift from buying treasury bonds to other bonds before they’d go into equities. But what do I know. It’s be better if they went into the student loan market.

Re: Federal Reserve slashes interest rates to zero

#244

Post by webninja »

js2 wrote: post #240

SARS-CoV-2 doesn't care about monetary policy. Why not give money directly to the people who need it? They'll spend the money right away. I'm willing to sacrifice my 401(k) and retire on just SS if need be if my government is willing to help everyone worse off than me.

There’s thousands of rich bourgeoisie in this world that don’t think like you. But your comment gives me hope that there’s more people out there that are driven by things other than fear and greed.

Re: Federal Reserve slashes interest rates to zero

#245

Post by webninja »

js2 wrote: post #239
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…

I'll burn karma for this: Shit hacker news says.

It’s worth exploring every angle and weighing the pros and cons.

He brings up the Statistical Value of a Human Life (SVHL) which is a valid point yet uncomfortable to people who are new to learning how our world functions.

Also some of us are old enough to still remember the swine flu (H1N1) and the bird flu (H5N1).

Re: Federal Reserve slashes interest rates to zero

#246

Post by LeoTinnitus »

superkuh wrote: post #16

Not only that but they've removed the reserve requirements entirely for "thousands" of banks. There are only ~4500 commercial banks in the USA total. So that's at least a good fraction of them. These banks can now create money out of nothing as much as they want.

That is also contingent upon state policy as well. It's kinda weird but in my state, WI, State law trumps federal law because our state laws are more stringent. It has something to do with our laws being grandfathered in before the federal government ever did anything about commercial lending.

Re: Federal Reserve slashes interest rates to zero

#247

Post by [deleted] »

taiwanboy wrote: post #59
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…

The government can simply ban shorts, much like 2008, and what other European stock markets have done already. That would kill the shorts dead in its tracks. Then the stock market would stabilize, in time for businesses to stabilize and hopefully by summer everything will be recovery focused.

[deleted]

Re: Federal Reserve slashes interest rates to zero

#248

Post by steveeq1 »

xxpor wrote: post #7
bluedevil2k wrote: post #4

Earlier quoted context omitted.

The Fed rate is the interest rates that the Fed pays banks for their deposits in the Fed. By lowering it, they’re incentivizing the banks to loan the money and provide liquidity into the market. Since banks need to make a profit on everything, they’ll loan the money out at a higher rate for things like mortgage, car loans, and credit cards. Depending on the credit worthiness and the collateral, the rates will differ…

>but you’ll never get to 0% as a consumer. Unless we see negative fed rates. Not that I think going so negative we see consumer level 0% mortgages is likely.

if the consumer rate is 0%, what is the stop the consumer from borrowing an unlimited amount of money?

Re: Federal Reserve slashes interest rates to zero

#249

Post by LeoTinnitus »

matt_the_bass wrote: post #213
kshacker wrote: post #188

Earlier quoted context omitted.

It maybe works for mortgage as government deals with banks regularly. But what if you rented from an individual owner who needs your rent? Liberalized (without proving that you are looking for a job for let us say next 3 months) unemployment insurance may be a better solution that keeps the economy churning.

I agree it’s not as simple as only mortgage freeze. But if the land lord needs the rent, probably that’s for their mortgage. But yes, I agree better unemployment insurance is a good idea.

A mortgage freeze would save the landlord and they wouldn't need the rent. If they need the rent when their mortgage payment is frozen, then they're not a good landlord. Chances are, they won't be a landlord for long when the lender calls the loan due as well.

Let's not offload the onus on landlords personally responsibility to manage their finances. If they don't have a mortgage to pay, they'll get by just fine if they can't collect rent.

Re: Federal Reserve slashes interest rates to zero

#250

Post by LeoTinnitus »

wideasleep1 wrote: post #129
thebeardisred wrote: post #11

Earlier quoted context omitted.

You'll never get zero on _some_ products. Retailers utilize low interest rates to provide "direct" financing to incentivize purchases at their stores. This is often provided as a "promotional"[1][2] rate with the hope that it will spur purchasing in the short term and then make money on the financing in a longer timeline. Often this is done at stores which sell "durable goods" (e.g. appliances or automobiles). The ta…

Back in '95, Wachovia ran a short credit card promo, called 'Prime For Life'. The account changed hands a few times, and is currently with Chase, but it remains nailed to prime, albeit an $88 annual fee. No, they have never raised my $7K limit, the effers. https://www.questia.com/magazine/1G1-16441751/wachovia-claim...

I glossed over "credit card" at first and now I'm 100% jealous. That is single highhandedly the greatest credit card ever haha! I'd pay $88 for that. You garner barely any interest as it stands!
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