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U.S. Fed accepts $756B in daily reverse repo operation

reuters.com

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Re: U.S. Fed accepts $756B in daily reverse repo operation

#161

Post by imtringued »

throwawaycities wrote: post #40
enraged_camel wrote: post #14

This might be an unpopular opinion, but the economy we have right now feels quite fake, for lack of a better word, in the sense that the official numbers that are reported don't seem to reflect its actual health. I find it deeply concerning that every warning sign is summarily dismissed as "transitory" and the government and the Fed continue to drive full speed ahead.

Not sure why you are down voted, everyone (when it benefits them) takes credit for the “greatest economy the world has ever seen” and “record stock market”, simultaneously they ignore record wage stagnation, record income gaps, record homelessness, record student loan defaults, record debt defaults of nearly every kind, record young people living at home to record high ages…I’d say record high unemployment, to which…

Student loans increase the supply of money. If those students don't take on loans then the government would have to do it. It's very deliberate. And no, someone has to take on those loans. It's just the way things are.

Re: U.S. Fed accepts $756B in daily reverse repo operation

#162

Post by imtringued »

Geee wrote: post #78
enraged_camel wrote: post #14

This might be an unpopular opinion, but the economy we have right now feels quite fake, for lack of a better word, in the sense that the official numbers that are reported don't seem to reflect its actual health. I find it deeply concerning that every warning sign is summarily dismissed as "transitory" and the government and the Fed continue to drive full speed ahead.

This is what happens when a central authority is controlling the economy. Everyone should know that free markets can allocate resources better than any central planner, but still somehow those economists think that we need central bank policies to control the whole thing. Central planning might be appeling idea especially for those who benefit from it, and provides unlimited avenues for complex economic theories, but…

No, this is what happens when demographic realities make rational behavior impossible.

Old people want to keep their pensions and savings with 0% inflation or even deflation. The one thing they don't want to do is spend money, for obvious reasons. They'd burn through their pension very quickly.

An economy that is not spending money will die. Someone has to spend to keep it going. Interest rates must go to 0% or lower so that someone finally spends their money.

Re: U.S. Fed accepts $756B in daily reverse repo operation

#163

Post by imtringued »

tibbydudeza wrote: post #99

Definitely not an economist so reading stuff like this makes me think "heck just give everybody a million dollars".

Stupid idea: Let people mail invoices to the Fed and the Fed will pay for them.

If people start spending money again things will go back to normal. The hope is that the pandemic makes people realize that money is not a perfect risk free asset that you can hold onto forever.

Re: U.S. Fed accepts $756B in daily reverse repo operation

#164

Post by Geee »

andrekandre wrote: post #126
Geee wrote: post #78

Earlier quoted context omitted.

This is what happens when a central authority is controlling the economy. Everyone should know that free markets can allocate resources better than any central planner, but still somehow those economists think that we need central bank policies to control the whole thing. Central planning might be appeling idea especially for those who benefit from it, and provides unlimited avenues for complex economic theories, but…

Everyone should know that free markets can allocate resources better than any central planner for the most part yes, but market failure is a thing... 1929 being the best example... and what the fed is doing is reacting to trends to prevent the system from tilting out of control, not centrally planning things (when the fed starts making 5-year plans then we can talk)

Great Depression was caused by the Fed and government policies: https://mises.org/library/great-depression

Re: U.S. Fed accepts $756B in daily reverse repo operation

#166

Post by throwawaycities »

imtringued wrote: post #161
throwawaycities wrote: post #40

Earlier quoted context omitted.

Not sure why you are down voted, everyone (when it benefits them) takes credit for the “greatest economy the world has ever seen” and “record stock market”, simultaneously they ignore record wage stagnation, record income gaps, record homelessness, record student loan defaults, record debt defaults of nearly every kind, record young people living at home to record high ages…I’d say record high unemployment, to which…

Student loans increase the supply of money. If those students don't take on loans then the government would have to do it. It's very deliberate. And no, someone has to take on those loans. It's just the way things are.

> It's just the way things are.

No, it’s not “just the way things are”. Student loans are official government policy codified into law. There is certainly a much better way for the system to have been designed, instead it was designed to allow tuition to be completely unrelated to market conditions. The government could have easily placed a cap on tuition prices/increases to protect students, instead the government allowed universities to set any tuition they want while supplying the loans to the detriment of students.

Re: U.S. Fed accepts $756B in daily reverse repo operation

#167

Post by throwawaycities »

jandrewrogers wrote: post #122
throwawaycities wrote: post #40

Earlier quoted context omitted.

Not sure why you are down voted, everyone (when it benefits them) takes credit for the “greatest economy the world has ever seen” and “record stock market”, simultaneously they ignore record wage stagnation, record income gaps, record homelessness, record student loan defaults, record debt defaults of nearly every kind, record young people living at home to record high ages…I’d say record high unemployment, to which…

Canceling debt creates a taxable event for the person with the debt under the tax code. Transferring money to a person and then voiding the liability is indistinguishable from unearned income, and is taxed as such. People aren't going to be very happy when they get hit with an unexpected $10k tax bill due immediately. Similarly, the people with the largest student loan debt tend to be affluent. Gifting the affluent m…

> Canceling debt creates a taxable event for the person with the debt under the tax code.

Under the current tax code, a forgiven debt isn’t always taxable. I have represented student loan holders and had their student loans forgiven (6 figure debts), and they had no tax liability.

And if student loans were forgiven it would be through the passing of a law, and it would be pretty trivial to include a provision that would remove any tax liability from student loan forgiveness.

And if people had a $10k tax bill due immediately (which you completely made up), they would not be mad if they had $100k or $200k in loan forgiven. It’s funny how the $10k tax bill is your concern on one hand then you shift to saying it would be deeply unfair because the people with the biggest loans tend to be affluent.

Affluent people don’t have student loans because their parents pay for their school. Otherwise the people with the most amount of debt are the biggest victims of the poorly designed system intended to indebt them for their entire lives.

Re: U.S. Fed accepts $756B in daily reverse repo operation

#168

Post by Geee »

imtringued wrote: post #162
Geee wrote: post #78

Earlier quoted context omitted.

This is what happens when a central authority is controlling the economy. Everyone should know that free markets can allocate resources better than any central planner, but still somehow those economists think that we need central bank policies to control the whole thing. Central planning might be appeling idea especially for those who benefit from it, and provides unlimited avenues for complex economic theories, but…

No, this is what happens when demographic realities make rational behavior impossible. Old people want to keep their pensions and savings with 0% inflation or even deflation. The one thing they don't want to do is spend money, for obvious reasons. They'd burn through their pension very quickly. An economy that is not spending money will die. Someone has to spend to keep it going. Interest rates must go to 0% or lower…

People will spend when they want to spend. It's utter horseshit that economy would die and we need government which forces people to spend.

Re: U.S. Fed accepts $756B in daily reverse repo operation

#169

Post by emkemp »

logicalmonster wrote: post #108
bob33212 wrote: post #32

Earlier quoted context omitted.

It is fake in the sense that billions of dollars are being minted by crypto without any real use case other than theoretically fixing the financial system "someday". But fake stuff has always been a big part of the economy. Realtors extract 6% of most real estate transactions, but provide minimal "real" value, for example. The important thing is that inflation isn't running away and also businesses are not shutting d…

No running away inflation? According to what? CPI? Many people who live in the real world know that CPI is a garbage measure of inflation and life is increasing in price faster than they say. CPI doesn’t even measure the right thing: inflation is a monetary, not a price phenomenon. It’s not things getting more expensive, it’s the value of money growing less. But they don’t publish the m2 money stock charts any more.…

"But they don't publish the m2 money market stock charts anymore. Wonder why?"

Because they moved savings deposits into M1. So the old M1 and M2 charts are retired and replaced with M1SL and M2SL.

Re: U.S. Fed accepts $756B in daily reverse repo operation

#170

Post by curation »

camnora wrote: post #114

The podcast Making Sense by Jeff Snider and Emil Kalinowski dig into how the Fed functions and how dollars/collateral affect the (world) economy. Very interesting if you're looking to learn more about this. Jeff also has some very informative blog posts. https://share.transistor.fm/s/b33f1c10

Yes! This. Consideration of the repo markets without understanding Eurodollars means the entire conversation is meaningless. There is not enough GOOD collateral. Treasuries are the only thing banks trust because they know how fragile everything is (rehypothecations, nake shorts). This is the continuation of the '08 crash, not a new one.
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