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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

#231

Post by sg47 »

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…

"But if there were ever a time for us not to be partisan and tribal, it's now" - Completely agree. I think GOP should ask Trump to step down and have someone responsible in charge.

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

#232

Post by A4ET8a8uTh0 »

qayxc wrote: post #33
ivankolev wrote: post #28

That smells a lot like panic move and I am not sure it will move the needle much. Economy will severly shrink no matter what Fed do.

It's not a panic move at all. It's a required reassurance to investors and companies to prevent actual panic moves (i.e. complete market crash). I agree that the economy will shrink nonetheless, but there's a difference between a small recession and a full blown depression.

I would normally agree with you, but whatever the intentions were, the market pointedly shrugged it off. I might even suggest that this FED move along with last week cut is part of the reason for the panic..

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

#233

Post by strbean »

jovial_cavalier wrote: post #219
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.

Giving Person A a "good deal" on loans so they can loan that money to Person B at a great profit isn't so different from just giving money to Person A.

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

#234

Post by xbmcuser »

malandrew wrote: post #229
ShroudedNight wrote: post #225

Earlier quoted context omitted.

I was referring to yours. I edited the original in the hopes of improving clarity.

My suspicion is that it is because I wrote "I honestly don't understand why the Democrats are so consistently anti-business in so many things they do", which I will admit is a tad bit flamebait-y on a forum that leans heavily Democrat. Non-Democrat positions are heavily downvoted across Hacker News.

I dont understand one thing though in my life time I am in my late 30s. Us has done well economically under Democrats compared to Republicans. But Republicans are considered pro business and Democrats anti business. Republicans talk about fiscal conservation but run up huge bills. Democrats talk about spending on healthcare etc but actually improve the deficit.

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

#235

Post by wonderwonder »

altec3 wrote: post #104
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…

I think what gdubs was trying to get across is that sure, there are problems, people to blame, etc. but now is not the time. We have to get our act together and handle the situation. We can't have petty fighting betweeen parties. Now is the time to unite and act. We can fight, argue and point fingers once this is all behind us.

You are right. Unfortunately we need good strong leadership focused on protecting not just numbers on a candlestick chart but actual real people. Our current president has proven completely incapable of that and should immediately step aside. I am no fan of Pence but he at least likely capable of listening to experts and following their recommendations. The markets reaction to last night Oval office speech is reason enough to prove the nation has lost confidence in its current occupant.

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

#236

Post by yc-kraln »

altec3 wrote: post #104
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…

I think what gdubs was trying to get across is that sure, there are problems, people to blame, etc. but now is not the time. We have to get our act together and handle the situation. We can't have petty fighting betweeen parties. Now is the time to unite and act. We can fight, argue and point fingers once this is all behind us.

You act like we aren't capable of doing two things at once.

Sorry, I am perfectly capable of acting while still pointing my finger at the people who are actively trying to make this worse.

Maybe you can afford to play kum-bay-yah but perhaps it's not your life or the lives of your loved ones which have been doomed by this ineptitude. Civility is poison to irrational discourse.

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

#237

Post by undersuit »

ShroudedNight wrote: post #223
malandrew wrote: post #180

Earlier quoted context omitted.

Lamar Alexander was not against providing this support. He blocked it based on how it was going to be paid for. It's very much a partisan issue because the Democrats want companies to foot the bill. The GOP thinks that if Washington DC thinks companies should do something then Washington DC should foot the bill. Neither side disagrees that people should have this support. All the Democrats had to do is introduce the…

As a non-American that's somewhat ignorant of the current states of the US legislative houses on this matter, could someone provide some context as to why the comment directly parent to $self is being maligned?

I downvoted because I disagree with the way they are arguing.

The gp's(grandposter) comment uses the word companies. Which companies? Well we're talking about the US and health care so it has gotta be the health insurance companies? No, the bill Lamar disagreed with was to make employer's provide sick time to their employees.

Also, pp(parentposter) is what I use. OP is reserved for poster of the content.

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

#238

Post by wonderwonder »

breakyerself wrote: post #171
aaomidi wrote: post #123

Earlier quoted context omitted.

They're literally blocking COVID emergency budget bills getting passed in the Senate This is time to fall in line or be thrown out of your job.

Why don't Republicans need to fall in line when Democrats pass much needed relief for coronavirus?

That's who he is talking about, the republicans are blocking it.

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

#239

Post by tomp »

cryptica wrote: post #184
ipnon wrote: post #162

Earlier quoted context omitted.

The key distinction is that the Fed is trading the new money for high-quality collateral. The original owners of the collateral will return the Fed's money within weeks of months in exchange for the return of the collateral.

No matter how you look at it, somebody who is not the Fed benefits from this. If market participants didn't think that they will benefit financially from this, they would not participate. This kind of "zero-sum temporary money" theory doesn't add up. The situation is exactly as kylebenzle inferred; the Fed is injecting new fiat money into the economy and it's going straight into the pockets of rich financial institut…

No, the way this works is this (as I understand it): I'm a bank, I need some cash to operate (people withdrawing money, trading, making payments, etc.), but I have no cash. I have $10B in US Treasury bonds, but - well, they're notionally worth $10B, but nobody want to exchange them for money, because noone else has money to spare (i.e. liquidity crisis). So here comes the Fed, takes my $10B in bonds, gives me $10B of cash so that I can run my business... In a week or so, I need to return $10B in cash, I get my $10B in bonds back ("collateral") and the cycle continues again.

The alternative is, the bank collapsing, taking some part of the economy with it.

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

#240

Post by jovial_cavalier »

strbean wrote: post #233
jovial_cavalier wrote: post #219

Earlier quoted context omitted.

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.

Giving Person A a "good deal" on loans so they can loan that money to Person B at a great profit isn't so different from just giving money to Person A.

Yes it is, because they have to pay the money back...

The money they make isn't "fake" in some sense, like you're making it out to be. It's real utility that they have generated by providing liquidity. Loaning money is not a get rich quick scheme. There is risk involved.

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