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Square to acquire Afterpay for $29B

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Re: Square to acquire Afterpay for $29B

#281

Post by annamargot »

fauigerzigerk wrote: post #272
andruby wrote: post #260

Earlier quoted context omitted.

Still a huge jump in M2 in Feb 2020: https://fred.stlouisfed.org/series/M2NS

Yes, but this 32% increase was not initially new money in anyone's pocket. The Fed simply replaced some treasuries and other debt on banks' balance sheets with reserves, which don't have to be backed by equity. This gave banks more wiggle room to sit out the pandemic without reducing lending at the exact wrong time. So the Fed has done its job on the way down. Now they just have to do their job on the way up as well,…

Potentially? Seems to me that potential is already being realized.

Re: Square to acquire Afterpay for $29B

#282

Post by skohan »

bluecalm wrote: post #273
jl6 wrote: post #209

Earlier quoted context omitted.

Can someone explain why x4’ing the money supply hasn’t ÷4’d the value of the dollar? Yet?

Imagine everyone gets 1000 USD loan, freshly printed USD from the government. Money supply just increased by 300billion (assuming it's for US citizens). Does it mean inflation follows? Probably not because people know they have to pay the money back. The price of assets people really need/want or those that are undervalued is going to go up though. I believe the situation is the same with stocks. They were criminally…

What's your reasoning for concluding that stocks were substantially undervalued?

Because another way to read the situation is that stocks are simply the asset of last resort. In a world with no interest, you can't park money in bonds (or CD's etc.) so you've basically got stocks, real-estate and commodities left as options.

Large-scale asset managers are not going to park billions of dollars under the mattress, so basically it has to go to stocks.

Re: Square to acquire Afterpay for $29B

#283

Post by RobertoG »

fauigerzigerk wrote: post #272
andruby wrote: post #260

Earlier quoted context omitted.

Still a huge jump in M2 in Feb 2020: https://fred.stlouisfed.org/series/M2NS

Yes, but this 32% increase was not initially new money in anyone's pocket. The Fed simply replaced some treasuries and other debt on banks' balance sheets with reserves, which don't have to be backed by equity. This gave banks more wiggle room to sit out the pandemic without reducing lending at the exact wrong time. So the Fed has done its job on the way down. Now they just have to do their job on the way up as well,…

>>"or this money will eventually end up as new money in someone's pocket (via new loans) and potentially create inflation. "

For that to happen you need enough credit demand in the economy.

It could happen, and, as you say, the Fed would increase the interest rate making reserves less available (credit more expensive), but the number of reserves in the system doesn't cause directly more money in the economy. It depends of the type of recovery.

Re: Square to acquire Afterpay for $29B

#284

Post by sleepyhead »

pjerem wrote: post #275
Khaine wrote: post #132

In Australia millennials, are allergic to credit cards. Credit card usage in that demographic is really low. Instead they prefer BNPL services as a credit mechanism. Banks have also responded and offer credit cards that don’t act like normal credit cards[1] [1] https://www.commbank.com.au/credit-cards/commbank-neo.html

Maybe I’m wrong but I have the feeling that credit cards as a norm is really just an American thing. In Europe where I live, I know nobody who buys anything with a credit card or barely if there is a 0% rate promotion. Credit cards do exists here but they are the card some shop gave you for whatever reason that you’d better never use. What is interesting is that we use the term « credit card » to speak about our debi…

> In Europe where I live, I know nobody who buys anything with a credit card or barely if there is a 0% rate promotion.

Do you live in Germany? Here in Norway credit cards are quite common for various reasons (safer to use online, pay later, bonus points).

Re: Square to acquire Afterpay for $29B

#285

Post by sleepyhead »

ZephyrBlu wrote: post #135
Khaine wrote: post #132

In Australia millennials, are allergic to credit cards. Credit card usage in that demographic is really low. Instead they prefer BNPL services as a credit mechanism. Banks have also responded and offer credit cards that don’t act like normal credit cards[1] [1] https://www.commbank.com.au/credit-cards/commbank-neo.html

I'm an early 20s Kiwi zoomer, so somewhat similar demographic. I don't have a credit card and see no point in it. I use a debit card for everything. I don't think most of my friends have credit cards either, but maybe they do and I don't notice.

Using a debit card online is not wise. If there is an issue you could end up with an empty bank account temporarily. Much better to be able to deal with such issues when you get an invoice at the end of the month.

Re: Square to acquire Afterpay for $29B

#287

Post by bserge »

Sander_Marechal wrote: post #239
hnick wrote: post #164

Earlier quoted context omitted.

Insurance, points, cashback, chargebacks. It's also a one month interest free float of your funds if you pay in full each month, meaning you earn some interest. I know some debit cards are getting closer to credit cards in these areas but at least when I first got one, they were just plastic cash. You spend it you lose it, the bank won't support you with clawing it back.

> Insurance, points, cashback, chargebacks Dutch here. We don't have points or cashback. Purchases are insured with standard bank debit payments as well, as are chargebacks. I do own a credit card but that is purely for the occasional (usually US) webshop that doesn't accept European debit cards, or as a backup payment method on vacation (my debit card once broke on vacation and my family had to send me money through…

What kind of store doesn't accept "European" debit cards, but accepts credit cards?

Visa and MasterCard debit should work anywhere online regardless of origin.

Re: Square to acquire Afterpay for $29B

#288

Post by dalmo3 »

depereo wrote: post #244
ZephyrBlu wrote: post #174

Earlier quoted context omitted.

> Insurance, points, cashback, chargebacks The first 3 don't really seem to exist in relation to CCs in NZ, and wanting/needing to do a chargeback seems unlikely. There are probably mild benefits to me having a CC over a debit card in NZ, but it doesn't seem to be anything like the US.

In NZ there are some solid benefits to paying with a CC - I generally toss a direct-debit authority to pay it off automatically monthly. I've got reasonable travel insurance protections when I pay with the CC, I get airpoints, and some chargeback options, as well as fraud detection. Additionally, it's been easier and more reliable to set up online payments with a credit card.

What's so easier about a cc for online payments vs a regular VISA debit card?

Re: Square to acquire Afterpay for $29B

#289

Post by bserge »

matkoniecz wrote: post #206
systemvoltage wrote: post #165

Earlier quoted context omitted.

That's not the main benefit of using a credit card. The primary benefit of a CC is decoupling it from your bank account - if there is an issue, CC company will fight the charge for you and almost always side on your side. I bought a pair of speakers costing $2500. I tried to reach to the company for a return but no one would answer. No phone, no email, nada. 1 month return deadline was coming up and I called American…

Then why not us debit card? Chargebacks are also available and risk of ending with spiral of debt is removed. (Yes, it is a real risk. Yes I know that you and me are not going to e so stupid. But I am not trusting this belief.)

In my experience, chargebacks with a debit card (in Europe) are a pain in the ass.

The banks themselves seem to be against it so they made me write emails explaining the situation, give the seller more time (1 month not enough) and then wait another few weeks for processing.

With a credit card (British), they just did it -_-

And let me mention how a SEPA payment means your money is gone unless the seller themselves agrees to refund.

Re: Square to acquire Afterpay for $29B

#290

Post by bserge »

refurb wrote: post #261
matkoniecz wrote: post #206

Earlier quoted context omitted.

Then why not us debit card? Chargebacks are also available and risk of ending with spiral of debt is removed. (Yes, it is a real risk. Yes I know that you and me are not going to e so stupid. But I am not trusting this belief.)

If someone fraudulently or mistakenly charges my debit card $5,000, that's $5,000 gone from my bank account until I get it fixed. If someone charges $5,000 to my credit card in error, I've got 30+ days plus to resolve with zero financial impact to me. If it doesn't get resolved in that time, I have the option to not pay the bill (or that portion of the bill), knowing that if the error is fixed, the penalties and inte…

Have you experienced that? There's limits on charges on debit cards, usually ~2000 Euros. Credit cards are higher but then again they also have the credit limit and won't go beyond that in most cases.
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