Fed cuts half point in emergency move amid spreading virus • Hacker News Board

Re: Fed cuts half point in emergency move amid spreading virus

#131

Post by thedudeabides5 » Tue, Mar 03, 2020, 3:53 PM UTC

scarmig wrote: post #118

mbesto wrote: post #110

Earlier quoted context omitted.

> For those saying the Fed is running out of ammunition, study what the Bank of Japan has done. Oh you mean the economy that has been stagnate for 20 years?

If I were a Japanese retail investor in 1990 in his 30s, what would have been the best strategy? Just stay out of domestic markets and focus on areas with potential for growth?

Buy as many levered Japanese Government Bonds (JGBS) as possible!

0.67 Sharpe Ratio from government bonds in local currency from 1990 to 2000.

Re: Fed cuts half point in emergency move amid spreading virus

#132

Post by Retric » Tue, Mar 03, 2020, 3:53 PM UTC

rsync wrote: post #97

airstrike wrote: post #27

From what I gather after spending more time than I'm willing to admit listening to every finance talking head out there, the consensus on the street seems to be that this will result in a temporary market recovery followed by the continued deterioration of stock prices given that fiscal or monetary* policy can't really affect the real economy in the near term* i.e. if the supply chain is indeed impacted due to COVID-…

" ... I'm still slightly bearish on the whole situation due to the combination of the virus' absurdly high infection rate[0] and its ridiculous ~25-30 day incubation period ..." You're right to highlight those aspects of the virus and I find them noteworthy as well. However, the statistics I am most interested in is mortality rate and rate of asymptomatic infections. I note with interest that among the 700+ infected…

The cruse ship had 135 infected on February 10th, jumping to 634 on February 20th. So, most of those 700 are recent infections. The actual long term death total for the cruse ship is unknown, but should include people who died in their home country after returning.

The good news is assuming you trust China’s numbers new infections are down massively from a February 2nd peak. Deaths in China are also down significantly but less so, again assuming you trust their numbers.

Re: Fed cuts half point in emergency move amid spreading virus

#133

Post by airstrike » Tue, Mar 03, 2020, 3:54 PM UTC

rsync wrote: post #97

airstrike wrote: post #27

From what I gather after spending more time than I'm willing to admit listening to every finance talking head out there, the consensus on the street seems to be that this will result in a temporary market recovery followed by the continued deterioration of stock prices given that fiscal or monetary* policy can't really affect the real economy in the near term* i.e. if the supply chain is indeed impacted due to COVID-…

" ... I'm still slightly bearish on the whole situation due to the combination of the virus' absurdly high infection rate[0] and its ridiculous ~25-30 day incubation period ..." You're right to highlight those aspects of the virus and I find them noteworthy as well. However, the statistics I am most interested in is mortality rate and rate of asymptomatic infections. I note with interest that among the 700+ infected…

According to my fancy math based on numbers from Johns Hopkins COVID-19 dashboard[0][1], we're closer to a 7% mortality rate

[0] direct link: https://www.arcgis.com/apps/opsdashboard/index.html#/bda7594...

[1] posted to HN: https://news.ycombinator.com/item?id=22475060

Re: Fed cuts half point in emergency move amid spreading virus

#134

Post by A4ET8a8uTh0 » Tue, Mar 03, 2020, 3:54 PM UTC

aazaa wrote: post #51

For those saying the Fed is running out of ammunition, study what the Bank of Japan has done. It owns close to 80% of the Japanese ETF market currently, with no end to the expansion of balance sheet in sight. After buying long treasuries, it's not unreasonable to imagine the Fed buying stocks, either individual issues or ETFs. The President would be for it, and it would be hard to drum up any opposition to it in cong…

It is weird for me to read this. On the surface, it is factually correct, but I am not absolutely certain the conclusions drawn are valid.

Your initial paragraph seeks to address point raised by others that FED is running out of ammunition and you list of Japan as an example with other pointing out the price Japan paid for that pollicy.

I suppose FED could buy all US equities on national credit card ( and if you think about it, something similar to it happened only few months ago ), but do you think it is a prudent move?

Re: Fed cuts half point in emergency move amid spreading virus

#135

Post by lawrenceyan » Tue, Mar 03, 2020, 3:55 PM UTC

airstrike wrote: post #114

lawrenceyan wrote: post #100

Earlier quoted context omitted.

> given that fiscal policy can't really affect the real economy i.e. if the supply chain is indeed impacted due to COVID-19, no amount of fiscal stimulus can make up for the time / productivity losses The fact that you don't know the difference between fiscal and monetary policy, FYI changing interest rates is monetary policy , makes me strongly doubt that you know what you're talking about.

I've edited the post accordingly, it was a brain fart moment... But thanks for your sincere feedback

I'm 100% understanding of brain farts. It's just that to do so on something as fundamental and basic as monetary versus fiscal policy, to me feels like, a mistake a non-layman wouldn't make.

It's not like you can chalk it up to an issue with similar spelling either. 'Monetary' and 'fiscal' are written completely differently.

Re: Fed cuts half point in emergency move amid spreading virus

#136

Post by elicash » Tue, Mar 03, 2020, 3:55 PM UTC

thedance wrote: post #76

elicash wrote: post #48

Earlier quoted context omitted.

The entire point of housing policy at the local level, where it matters, is to make housing more expensive because people's wealth is in their homes and they're relying on housing prices to rise steadily. Renters have less political power.

Local policy is broken but I’m not convinced that it dominates. The Feds have the mortgage interest deduction and Fanny, which both stimulate the demand side very greatly.

Aren't significantly fewer (tens of millions?) people taking the mortgage interest deduction due to tax reform that doubled the standard deduction? Doesn't seem to have driven a collapse in housing costs.

We need more density in low-density areas of cities. Allow people to have multi-family homes if they choose it.

Re: Fed cuts half point in emergency move amid spreading virus

#137

Post by stanfordkid » Tue, Mar 03, 2020, 3:55 PM UTC

airstrike wrote: post #27

From what I gather after spending more time than I'm willing to admit listening to every finance talking head out there, the consensus on the street seems to be that this will result in a temporary market recovery followed by the continued deterioration of stock prices given that fiscal or monetary* policy can't really affect the real economy in the near term* i.e. if the supply chain is indeed impacted due to COVID-…

It reduces volatility due to a unknown and unquantifiable risk in the short term to prevent panic. Obviously if the apocalypse hits the market will still tank, but if catastrophe doesn’t happen then the unneeded loss is prevented.

Re: Fed cuts half point in emergency move amid spreading virus

#138

Post by heartbeats » Tue, Mar 03, 2020, 3:55 PM UTC

A4ET8a8uTh0 wrote: post #134

aazaa wrote: post #51

For those saying the Fed is running out of ammunition, study what the Bank of Japan has done. It owns close to 80% of the Japanese ETF market currently, with no end to the expansion of balance sheet in sight. After buying long treasuries, it's not unreasonable to imagine the Fed buying stocks, either individual issues or ETFs. The President would be for it, and it would be hard to drum up any opposition to it in cong…

It is weird for me to read this. On the surface, it is factually correct, but I am not absolutely certain the conclusions drawn are valid. Your initial paragraph seeks to address point raised by others that FED is running out of ammunition and you list of Japan as an example with other pointing out the price Japan paid for that pollicy. I suppose FED could buy all US equities on national credit card ( and if you thin…

Prudent move? It's the only move. If it's either that or a recession, then they will do it, consequences be damned.

Re: Fed cuts half point in emergency move amid spreading virus

#139

Post by airstrike » Tue, Mar 03, 2020, 3:56 PM UTC

ithinkinstereo wrote: post #67

airstrike wrote: post #27

From what I gather after spending more time than I'm willing to admit listening to every finance talking head out there, the consensus on the street seems to be that this will result in a temporary market recovery followed by the continued deterioration of stock prices given that fiscal or monetary* policy can't really affect the real economy in the near term* i.e. if the supply chain is indeed impacted due to COVID-…

> if the supply chain is indeed impacted Is there any question? 80% of the Chinese workforce has been sitting on the sidelines since mid-January. Production is just barely ramping up and I don't think we'll see full capacity until well into April, provided that COVID19 is truly contained/managed. Edit: not sure about the downvotes. Here's a source about Foxconn production: https://twitter.com/onlyyoontv/status/123485…

The question at the moment is whether the impact is prolonged enough to affect more than 1-2 quarters worth of business, and how quickly we can recover from this. Can Foxconn plants in China work double time to make enough iPhones for Fall / Winter sales? Your guess is as good as mine...

Re: Fed cuts half point in emergency move amid spreading virus

#140

Post by bryanrasmussen » Tue, Mar 03, 2020, 3:56 PM UTC

rsync wrote: post #97

airstrike wrote: post #27

From what I gather after spending more time than I'm willing to admit listening to every finance talking head out there, the consensus on the street seems to be that this will result in a temporary market recovery followed by the continued deterioration of stock prices given that fiscal or monetary* policy can't really affect the real economy in the near term* i.e. if the supply chain is indeed impacted due to COVID-…

" ... I'm still slightly bearish on the whole situation due to the combination of the virus' absurdly high infection rate[0] and its ridiculous ~25-30 day incubation period ..." You're right to highlight those aspects of the virus and I find them noteworthy as well. However, the statistics I am most interested in is mortality rate and rate of asymptomatic infections. I note with interest that among the 700+ infected…

there's still 36 serious/critical. I have a hard time believing all of them will be fine. https://www.worldometers.info/coronavirus/#countries