Earlier quoted context omitted.
Egg prices are up mostly because of a shortage caused by avian flu.
You’re not even close to being right. https://modernfarmer.com/2023/01/record-breaking-egg-profits...
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Federal Reserve lent $300B in emergency funds to banks in the past week
181–190 of 262 posts
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#182Earlier quoted context omitted.
Sounds like an unbiased and reliable source
https://www.ft.com/content/151cb429-d024-4d5c-9edf-5b4a2b104... How about this one ? https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1... As unbiased as it can be. Hopefully you can stomach the direct quotes from the companies themselves.
As long as there aren't any eggs going unsold, this is irrelevant to the price of eggs. If anything, the opposite is happening: sporadically there are limits on how many eggs one customer can buy in my grocery store.
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#183Earlier quoted context omitted.
I don't know who R&M is. I don't know anything about the slavery reference. Feel free to explain what you're talking about. I read press releases from the federal financial agencies and look at their balance sheet. The similarity here is that money is being created and injected into the balance sheets of private participants in the economy, money that wouldn't have seeped out to purchase things now will, overlapping…
" with extra steps" is from a show called "Rick & Morty" [0]. Surprising how you picked up on the phrase without even knowing what the show is. As for your comment itself, it seems like you gloss over the similarities and ignore the differences. For example, you say "money is being created" but this is objectively false. As is your claim that this money is "seeping" anywhere; it isn't doing anything other than ensuri…
My thoughts are that some money was going to be parked at the banks. Some of that money wasn't going to be redeemed, some of it would have been impossible to redeem because the banks were sitting on losses.
Now that everyone is woken up to that reality, they want to move it around now into other banks and other assets, and actually can. It is impossible to stop at just ensuring bank solvency.
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#184Earlier quoted context omitted.
It's a loan whose collateral is taken at par value rather than market price, which essentially increase the Fed's balance sheet. As of Wednesday last week, 4 months of QT have been reverted in a single week: https://fred.stlouisfed.org/series/WALCL
As long as the regular Joe doesn’t get extra money to spend, inflation will be check. Banks won’t go buy eggs anytime soon. We had close to 0% interest rates for almost a decade, and inflation was in check. It’s not the Fed that caused inflation, it is: * Suspending school debt (extra income) * Injecting real cash into the economy (stimulus checks and PPP loans to small businesses) * Supply chain bottlenecks after Co…
> * Injecting real cash into the economy (stimulus checks and PPP loans to small businesses)
That's kind of hard to believe when inflation went up worldwide.
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#185I assume banks went ahead and bought subprime mortgage bonds with that $300B. And at this point why not? Everyone knows that the government will print an unlimited amount of money to keep the system going no matter what risks you take and how careless you are.
SVB and Signature banks both failed , their shareholders walked away with nothing. This does not encourage risk-taking on the part of the banks.
Shareholders aren’t the ones deciding the bank’s risk tolerance.
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#186Earlier quoted context omitted.
" with extra steps" is from a show called "Rick & Morty" [0]. Surprising how you picked up on the phrase without even knowing what the show is. As for your comment itself, it seems like you gloss over the similarities and ignore the differences. For example, you say "money is being created" but this is objectively false. As is your claim that this money is "seeping" anywhere; it isn't doing anything other than ensuri…
My thoughts are that some money was going to be parked at the banks. Some of that money wasn't going to be redeemed, some of it would have been impossible to redeem because the banks were sitting on losses. Now that everyone is woken up to that reality, they want to move it around now into other banks and other assets, and actually can. It is impossible to stop at just ensuring bank solvency.
But that doesn't track; they may want to move it around, but there's no place to move it to. Nothing not-absolutely-insane would return positive yields in the time it would need to before the loan matured. That's the whole point of the borrowing rate it's set to.
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#187Earlier quoted context omitted.
Inflation was there all along in asset prices - why else have home values gone up disproportionately relative to average Joe's income? What the Fed is doing with this move is patching the balloon and preventing a deflation. That is, bank has a run on deposits because people want their money back; bank is out of liquid cash; bank sells bonds/MBS that have mark-to-market less than par thus realizing losses. The downstr…
Housing prices were going up because of supply/demand and not necessarily because of systemic high inflation. By the way just with regular Because homes cost a lot of money to begin with, the compounding effects of “healthy” inflation is going to be noticeable, and that doesn’t even factor in the low supply in the market.
> Housing prices were going up because of supply/demand
I don't think that's the case. Development was occurring so quickly, supply exceeded demand, and new houses sat or became entangled in bad mortgages. Property values increase as a function of population, which sounds the same as supply and demand but isn't quite. Housing prices increased because labor, builder and materials rates increased.
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#18813 years of QE. You don't have to be an economist to see the coming recession or even worse depression. Better prepare for the worse.
How do we prepare?
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#189I assume banks went ahead and bought subprime mortgage bonds with that $300B. And at this point why not? Everyone knows that the government will print an unlimited amount of money to keep the system going no matter what risks you take and how careless you are.
If they haven’t yet, they will eventually. Once banks realize that utilizing BTFP is kosher, they’ll run it all the way to its cap (which encompasses a little over $4T of distressed assets [0]) and reinvest the cash wherever they can. The mortgage rate will become pegged to the one-year rate and the housing market will resume its climb. Banks will still take a massive hit but they’ll bleed out slowly instead of crashing violently causing widespread panic in the process.
Re: Federal Reserve lent $300B in emergency funds to banks in the past week
#190This is another QE/Quantitative Easing, even if they don't call it that way. I hope inflation doesn't come back/get higher again because then we'd likely see the kind of second wave inflation people saw in the 70s.
It’s a loan, not QE. QE is no strings attached money injected into the market. QT is still ongoing as of last week, however, I don’t see it lasting. I do think a .25 rate hike will still happen.
I'd rather get .25 and hover there