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

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

#221

Post by orf »

iancmceachern wrote: post #177
cipheredStones wrote: post #164

Earlier quoted context omitted.

You're not being downvoted because people trust banks; you're being downvoted because commenting "you can't trust the banks" doesn't add anything interesting to the discussion, it's just a bare statement of a common opinion.

And that's not ok why? It's not against the HN policies... And you are incorrect, my point is we can't trust the people currently in charge of much of our financial system. Not a mistrust of the institutions themselves.

It’s perfectly ok to post that, but don’t expect to not be downvoted for it

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

#222

Post by jones6ofMont »

almost_usual wrote: post #6
Findeton wrote: post #3

This 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.

These loans will have special clauses for banks not to pay back, or pay back very much later wothout any consequences for not doing so. Somwtimes Fed as write down these debts. It is QE just the free money parts need some dressing so peasants won't know about it.

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

#223

Post by tommiegannert »

aussiedude wrote: post #151

So why did investors have to loose big time on a 1.8B loss when the bank had 16B in assets? Seems like SVB was scarified

NY Times alleges that the Fed had been telling SVB about the reserve issues since 2021.

It sounds like SVB was a poorly run bank. When it came down, I'm sure a bunch of people said "told you so," but there was ample time to correct before then.

https://www.smh.com.au/business/banking-and-finance/before-c...

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

#224

Post by lillecarl »

dragonwriter wrote: post #220
8note wrote: post #212

Earlier quoted context omitted.

The distinction is dumb. People's main thing they have to pay on a regular basis is rent or mortgage, so the cost of housing should be included in the consumer inflation index. A 10000x increase in rent makes carrots unaffordable even if the price of carrots hasn't changed

> The distinction is dumb. You would be better positioned to make that argument if you could demonstrate a basic understanding of what the distinction is . > People’s main thing they have to pay on a regular basis is rent or mortgage, so the cost of housing should be included in the consumer inflation index. The cost of housing as a consumer good (rent, actual or, for homeowners, imputed) is included in inflation mea…

We've got the same bullshit in Sweden with the housing market boom, free-ish loans have driven prices through the roof. This means we're stuck on low interest rates or everyone and their uncle will default, a better solution must exist!

This makes it very difficult to get into the market since our rules require 15% of your loan in up-front capital. For a 1 room apartment that means about one year of salary saved up. Yay boomer economy...!

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

#225

Post by light_hue_1 »

fosk wrote: post #170
light_hue_1 wrote: post #168

Earlier quoted context omitted.

This doesn't even pass the smell test. > It’s not the Fed that caused inflation, it is: > > * Suspending school debt (extra income) School debt repayments are about $100B per year ($0.1T). > * Injecting real cash into the economy (stimulus checks and PPP loans to small businesses) $800B in stimulus checks. PPP was about $800B as well. So we're talking $1.6T over 3 years, $0.5T/year. The US economy is $23T. Let's put…

Defense spending doesn't contribute not even a little bit to how inflation (CPI) is being calculated, because the DoD is spending money on stuff that doesn't affect the general population. Unless everyone is trying to buy an F22, of course, and that finds its way into the CPI. Not every expense is the same when it comes to the cost of general goods and services.

> Defense spending doesn't contribute not even a little bit to how inflation (CPI) is being calculated, because the DoD is spending money on stuff that doesn't affect the general population. Unless everyone is trying to buy an F22, of course, and that finds its way into the CPI.

That's completely wrong.

When the government spends on defense that money is not put into a large pit somewhere at Lockheed HQ and then lit on fire. It is spent on wages, on buying things from other contractors, etc. It ends up in people's pockets just like stimulus checks do. There's no difference. This is Econ 101 stuff.

You're seriously misleading people in this thread about how CPI, inflation, and the economy as a whole works.

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

#226

Post by antibasilisk »

Retric wrote: post #95
antibasilisk wrote: post #87

Earlier quoted context omitted.

>It’s a loan, not QE QE is literally just funky loans.

No QE is purchasing something not a loan. https://en.wikipedia.org/wiki/Quantitative_easing . QE creates money from thin air when distressed assets fail. This doesn’t because the asset is still on the banks balance sheet and can thus cause the bank to fail. Which is a critical distinction.

The 'something' here being bonds 99% of the time, so... a funky loan.

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

#227

Post by jbverschoor »

Retric wrote: post #86
jbverschoor wrote: post #85

Earlier quoted context omitted.

Bs.. you might be confused with the 0% reserve requirements. QE its strings attached, and this is also QE. They are buying debt from the banks (by giving out a loan)

They are lending on collateral not buying anything. QE is actually buying assets. https://en.wikipedia.org/wiki/Quantitative_easing

A debt security is a financial asset. They can also sell that claim again to a company or country if anyone wants to buy.

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

#228

Post by afpx »

dragonwriter wrote: post #220
8note wrote: post #212

Earlier quoted context omitted.

The distinction is dumb. People's main thing they have to pay on a regular basis is rent or mortgage, so the cost of housing should be included in the consumer inflation index. A 10000x increase in rent makes carrots unaffordable even if the price of carrots hasn't changed

> The distinction is dumb. You would be better positioned to make that argument if you could demonstrate a basic understanding of what the distinction is . > People’s main thing they have to pay on a regular basis is rent or mortgage, so the cost of housing should be included in the consumer inflation index. The cost of housing as a consumer good (rent, actual or, for homeowners, imputed) is included in inflation mea…

Not sure why you were downvoted

https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...

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

#229

Post by afpx »

arcticbull wrote: post #116
lazide wrote: post #114

Earlier quoted context omitted.

No, Japan has had massively crashing population, which offset the massive inflationary impact. https://www.macrotrends.net/countries/JPN/japan/population-g... Despite a massive decrease in population, Japan has been mostly flat, when they should be in a strong deflationary environment due to demand destruction - because, you know, people being dead. So hey, if the US population would decrease .5% a year (doesn’t soun…

That's a funny way of saying that 'supply and demand meet in Japan' which you can do but decreasing demand or increasing supply. It really is that simple. When supply and demand are allowed to meet, prices stabilize. Otherwise please explain to me why you think that this is the one asset on earth not affected by supply and demand. And you could really use a solid citation. Thought exercise. There are 140,000,000 hous…

The price of a house in the middle of nowhere is labor + materials. The closer you get to a population center (where people want to be) it becomes labor + materials + property value, where property value increases non-linearly. At the center it becomes labor + materials + property value + zoning overhead. Zoning overhead grows as more people are involved in the process.

I don't think you'll ever get much cheap housing, unless you build a ton along the periphery of a population center (which people don't want). You'd have to build at least 20% more housing for the price to drop 10%, and most of that housing will be where people don't want to live.

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

#230

Post by cudgy »

fosk wrote: post #45
almog wrote: post #32

Earlier 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…

How does this explain food increases? Everyone decided to eat twice as much food because their student loan payments were paused?
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