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Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

cnbc.com

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Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#211

Post by sequoia »

jacquesm wrote: post #105
mdszy wrote: post #83

Universal healthcare? Too expensive. $1.5T to bail out wall street? Sure!

I don't think you fully understand the subject. This money did not 'bail out wall street', it made sure the bottom did not drop out of the market which would affect pensions and savings plans of very large numbers of people. The thing to worry about is that it did not work .

Is it impossible to provide a basement/bottom to these pension funds without rewarding/bailing out hedge funds & rich bankers & investors? I have no idea, I'm asking honestly.

I understand both the fact that market crash would negatively impact people's retirement, and that it really rankles to have to prop up/"bail out" rich investors when we claim to not be able to afford healthcare.

It's worth noting that if there were more baseline social services such as healthcare, it would be less necessary to gamble on the stock market for one's retirement.

Also: people nearing retirement should not be highly exposed to the worst market volatility. If they are, either they or their investment manager is mismanaging their money–you're supposed to reduce risk more and more as you approach retirement. I'm 35 & not concerned about this vis-a-vis my retirement as there's lots of time for it to recover.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#212

Post by imcoconut »

RIMR wrote: post #161
laughingbovine wrote: post #157

Guys this is low-level plumbing work to keep the market moving. If they DIDNT do this, then people wouldn't be able to make trades, and that would cause trust to be lost in the system, and that would be really bad. Someone correct me if I'm wrong, but I believe this money is for what are effectively loans that will get paid back in a very short amount of time.

Maybe trust SHOULD be lost in this system if it can't withstand the real world without falling into chaos... This money could do so much good in our society, and yet we're using it to prop up a broken capitalist system that contributes to economic problems for Americans.

I actually tend to agree with you philosophically. But practically the outcome of inaction on the fed's part would very likely be disastrous to regular Americans.

Think about America during the great depression. Modern fed theory and policy is all aimed toward preventing something like that from happening again. It's possible that without TARP, QE, etc. in 2008 (and onward) the great recession would have become great depression 2.0.

While a complete economic reset might be in order, the question is how well would America fare during the transition?

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#213

Post by sytelus »

ipnon wrote: post #59
asickness231 wrote: post #35

"inject 1.5t" by that do they mean a 1.5t panic bailout for wall street? how can we find 1.5t in the budget but no money for universal healthcare, student loan forgiveness, ubi etc. The markets wouldn't be so important if there were a safety net.

The Fed isn't printing 1.5 trillion greenbacks and handing out fat sacks on Wall St. They are providing short-term loans to increase the amount of money in circulation (liquidity). The intent is to increase the total amount of trading occurring so that the market can return to equilibrium sooner than later. The Fed wants to prevent firms from not making trades solely for lack of liquidity in the market. edit: "from m…

There is huge amount of cash sloshing around as it is. Folks like Mark Cuban have already been mostly cash. Big tech have $100B cash lying around. I think it would be disgenuous to say there is no cash available for trading but perhaps right thing to say that I rather not trad with my own cash. I presume if you trad with fed money and go on loss over long term then you can simply declare bankrupcy of your shell company and start a new one.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#214

Post by roenxi »

whatshisface wrote: post #110
tic_tac wrote: post #108

Earlier quoted context omitted.

You can't just conjure the necessary tests up from nothing. Japan has also had problems with testing. No one is trying to "deny testing". It is a work in progress and is indeed ramping up.

The FDA had a ban on tests outside of the CDC's tiny supply for a long time. That's whats being referred to by "denying testing." Not a political issue so much as a typical bureaucratic slowdown with very real consequences.

Not a political issue? The FDA having the power to ban things known to be a good idea sounds exactly like a political issue. A pretty serious one - excessive government regulation magnifying the effect of a crisis.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#215

Post by trymas »

roenxi wrote: post #209
tw04 wrote: post #69

Earlier quoted context omitted.

>But if there were ever a time for us not to be partisan and tribal, it's now. You say that like both parties are trying to deny testing and are refusing to provide the social safety net for workers to stay home when they're sick. This is very much not a "both sides" discussion. This is: the GOP needs to stop trying to pretend like nothing is wrong and actually DO SOMETHING to prevent this from becoming an even bigge…

If the system is reliant on the legislative branch to respond to a crisis then there is no doubt that it will fail. Large voting bodies are no good at all in times of crisis.

I guess OP meant that this ignorance is systematic and long term. Current pandemic just very clearly shows how ridiculous it is not to provide a social safety net.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#216

Post by A4ET8a8uTh0 »

tw04 wrote: post #177
allovernow wrote: post #118

Earlier quoted context omitted.

>Ahh, the old cowardly downvote without comment because you don't like the reality of the situation that there is one party that's very much to blame People are probably downvoting silently this time because explaining to you that you're obliviously consuming propaganda is one step deeper into flamewar territory which is unpopular on HN (and against the rules). Case in point? Media reports that bill forcing employers…

>Case in point? Media reports that bill forcing employers to provide sick leave failed to pass because of evil Republicans. What you won't see on the news is the nuance that such a bill can't be passed without possibly bankrupting small businesses. The bill literally includes the funding to pay for sick leave. That's why it's a FUNDING bill - I think you're confused about who is being mislead by propaganda. Meanwhile…

Duh. Babies cost money and parents will do almost anything to keep it alive. Or at least bare minimum mandated by law. In either case, it is a sacrifice to the god of economy./$

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#217

Post by LatteLazy »

When the problem is confidence, an injection of cash fixed the issue.

When the problem is the a bleak economic outlook because of coronavirus, oil prices, trade wars and structural issues, you're just spending money to make a number look good for a few more weeks.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#218

Post by mamon »

zaroth wrote: post #173
gdubs wrote: post #13

As the joke goes, a trillion here a trillion there and pretty soon you're talking about some real money! But in seriousness, the next week is a critical time in the world. I remember sitting in an airport when news of Lehman Brothers collapse was flashing on the TV screens. I'm reminded of that time. We learned later about how Hank Paulson got down on one knee and begged Nancy Pelosi to go along with is plan to save…

I'm sorry, I simply don't understand the thought process here... Question 1) Is the spread inevitable, or can we achieve containment? Question 2) If it can't be contained, and worldwide spread is inevitable, approximately how many new cases per day do you want to see for the next 6 months? I would say the answer to #1 is that spread is absolutely inevitable. There are way too many vectors, and it is way too virulent.…

>> "Test everyone!" To what end? You don't need to test people in order to know if they need an ICU. The ICUs are not full - and you don't need more testing to tell you that. The main benefit to more testing would be that people who are self-quarantining due to potential exposure could maybe stop self-quarantining earlier. That's a fairly marginal benefit.

You underestimate human stupidity :) People self-quarantaing is a sign of great awarenes of the danger. Meanwhile there are millions of people who ignore symptoms because "it's just a common flu, not coronavirus, don't be paranoid". Testing everyone would help identify and quarantaine those people (against their will, if necessary).

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#219

Post by jovial_cavalier »

sytelus wrote: post #198

So here's the thing: 80% of the population doesn't own stock. When fed pumps such massive money to prep the stocks, where does that money end up? I guess the idea is that then we pump the stock so companies continue to hire people so unemployment remains low. Considering the vast majority of jobs are low paying, if not outright minimum wage jobs, this means these trillions of dollars of fed charity is basically meant…

The fed doesn't pump stocks. It buys bonds and gives good deals on loans. It merely increases liquidity. It doesn't just give money to people.

Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets

#220

Post by malandrew »

asickness231 wrote: post #35

"inject 1.5t" by that do they mean a 1.5t panic bailout for wall street? how can we find 1.5t in the budget but no money for universal healthcare, student loan forgiveness, ubi etc. The markets wouldn't be so important if there were a safety net.

> The markets wouldn't be so important if there were a safety net.

The markets literally pay for the entirety of any safety net. Without the markets there are no jobs, so no payroll or income tax revenue. Without tax revenue, there are no safety nets.

Without the markets, there are no investments, so no capital gains tax revenue.

Without the markets, there is nothing to sell, so no sales tax revenue.

Without the markets, there is capacity for charity.

If you don't understand how critical the markets are to the functioning of the country, you don't understand how countries function.

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