Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Federal Reserve lent $300B in emergency funds to banks in the past week

pbs.org

Post reply on HN
Print view View original

201–210 of 262 posts

Re: Federal Reserve lent $300B in emergency funds to banks in the past week

#201

Post by spaceman_2020 »

phailhaus wrote: post #155
paxys wrote: post #7

I 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.

There is a long lag between taking on excessive risk and failure.

In that period, your excessive risk taking will likely show excessive growth, which will likely lead to stronger stock prices. If you’re a banking exec, your salary is linked to stock performance. You can easily run up 5-8 years before the whole edifice crumbles, pocketing fat bonuses in the interim.

Who cares if Joe Shareholder gets left with nothing at the end? You and all your exec buddies can make off like bandits in the interim.

Re: Federal Reserve lent $300B in emergency funds to banks in the past week

#202

Post by spaceman_2020 »

overthrow wrote: post #40
monero-xmr wrote: post #30

Earlier quoted context omitted.

[flagged]

> Fiat is trash I'll gladly take that trash off your hands if you hate it so much

Statistically, the majority of the world’s fiat IS trash. Most of the world’s currencies are not worth holding at all.

You just happen to be born in a country that doesn’t have trash fiat - yet.

But if you were born in Pakistan, Lebanon, Argentina, or even Turkey, you’d probably say that your fiat was trash.

Re: Federal Reserve lent $300B in emergency funds to banks in the past week

#203

Post by dragonwriter »

spaceman_2020 wrote: post #202
overthrow wrote: post #40

Earlier quoted context omitted.

> Fiat is trash I'll gladly take that trash off your hands if you hate it so much

Statistically, the majority of the world’s fiat IS trash. Most of the world’s currencies are not worth holding at all. You just happen to be born in a country that doesn’t have trash fiat - yet. But if you were born in Pakistan, Lebanon, Argentina, or even Turkey, you’d probably say that your fiat was trash.

> Most of the world’s currencies are not worth holding at all.

No currencies are worth holding (lending at interest isn’t holding.) Holding isn’t what currency is for.

Re: Federal Reserve lent $300B in emergency funds to banks in the past week

#204

Post by spaceman_2020 »

dragonwriter wrote: post #203
spaceman_2020 wrote: post #202

Earlier quoted context omitted.

Statistically, the majority of the world’s fiat IS trash. Most of the world’s currencies are not worth holding at all. You just happen to be born in a country that doesn’t have trash fiat - yet. But if you were born in Pakistan, Lebanon, Argentina, or even Turkey, you’d probably say that your fiat was trash.

> Most of the world’s currencies are not worth holding at all. No currencies are worth holding (lending at interest isn’t holding.) Holding isn’t what currency is for.

Most currencies are also not worth lending at prevailing local interest rates.

Currently, that also applies to apparently non-trash currencies like Euro and to some degree, USD.

Re: Federal Reserve lent $300B in emergency funds to banks in the past week

#205

Post by arcticbull »

lazide wrote: post #197
arcticbull wrote: post #154

Earlier quoted context omitted.

You’re fighting a straw man, nobody is arguing you need to do what Japan did verbatim. The only argument I’m making is when you allow supply and demand to meet prices stop going up. All the rest is narrative. The answer to where is “up.” Also the prices in Tokyo aren’t insane at all they’re super affordable by any standard.

That is not at all reflective of reality. https://japanpropertycentral.com/tag/tokyo-apartment-prices/ Tokyo prices are running 908k yen/square meter, or $685 square foot. While manhattan real estate is $1.5k/sq Ft and San Francisco $1k/sq ft - median incomes are dramatically lower in Japan, as is purchasing power, with the median Tokyo income being only $66k/yr. There is a reason the stereotypical apartment in Tokyo…

So at $685 (1/3 of Manhattan and 1/2-1/3 of SF) there are also units that are somewhat smaller. Just like in Europe. Sounds pretty darn affordable. Meanwhile in SF if you can’t afford the units that are larger by regulation you can live 2h outside of town. The whole point is folks can live in the metro, and live well. And despite that prices haven’t changed in nominal terms in 30 years - meaning slightly cheaper each year. Not everyone can afford the home of their dreams right now but it shouldn’t be between that and homelessness or a 2h commute.

Re: Federal Reserve lent $300B in emergency funds to banks in the past week

#206

Post by dragonwriter »

prasadjoglekar wrote: post #55
fosk wrote: post #45

Earlier quoted context omitted.

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…

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…

> Inflation was there all along in asset prices

“Inflation”, unqualified, means consumer price inflation. Asset price inflation is a completely different thing, with slightly overlapping potential causes, and completely different effects.

> 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.

Systemic firesales that drop asset prices aren’t “a deflation”, because, like inflation, unqualified “deflation” refers to consumer price deflation.

Re: Federal Reserve lent $300B in emergency funds to banks in the past week

#207

Post by lamontcg »

yaacov wrote: post #171
symlinkk wrote: post #153

This is one of those rare threads on HN where I can’t understand a single thing people are talking about

It’s okay, neither can the people posting

Be fair, they've laughed at uncountably many "money printer go brrrr" memes, so they're board certified as economists now.

Re: Federal Reserve lent $300B in emergency funds to banks in the past week

#208

Post by upsidesinclude »

arcticbull wrote: post #111
lazide wrote: post #93

Earlier quoted context omitted.

Demand was increasing because money was very easy to get.

Then why didn't it happen in Japan? Same easy money, no increase in house prices. It's not the interest rates, it's the zoning rules. [1, 2] [1] https://fred.stlouisfed.org/series/JPNCPIHOUAINMEI [2] https://fred.stlouisfed.org/series/INTDSRJPM193N

Homes are not assets in Japan, they are liabilities.

They only depreciate

Post reply on HN