41–50 of 60 posts
Yen carry trade unwind, inflation in Japan, hit to the NASDAQ, AI bubble pops, Japanese investors pull money back home and Treasuries lose its largest foreign creditor. Who knows what happens next.
US Treasury just bought about $10 billion worth of Yen
Is the US Treasury now on the hook every time Japan feels a bit antsy about its finances?
Earlier quoted context omitted.
Well, actually they have a new model. I call it the "Apple" model. Low volume sales on high value items where you can charge more. Even NVidia has moved to this model: make your money from selling high-end GPUs for Data Centers and forget the low-profit margin (GeForce) GPUs for gamers/consumers. The whole economy is moving to that model for many things.
Apple has low volume sales? You might have picked the wrong company for that example. Nvidia in the consumer market might fit, I would agree there.
In comparison. Android phones (in total) outsell iPhones because they are cheaper/more affordable. Sure Macs and iPhones may sell more than an individual non Apple brand, but collectively all together, the non-apple brands outsell Apple.
But it is certainly true that making high quality products doesn't necessarily mean low sales.
Earlier quoted context omitted.
Apple has low volume sales? You might have picked the wrong company for that example. Nvidia in the consumer market might fit, I would agree there.
>Apple has low volume sales? In comparison. Android phones (in total) outsell iPhones because they are cheaper/more affordable. Sure Macs and iPhones may sell more than an individual non Apple brand, but collectively all together, the non-apple brands outsell Apple. But it is certainly true that making high quality products doesn't necessarily mean low sales.
Rates up, rates down, I'm so confused. Too much liquidity supposedly means inflation, too little liquidity means deflation. Would not lower rates mean more consumer spending, thereby injecting more spending and fluidity in the system? I can't help but shake the feeling that the federal reserve is here for the wealthy, the bankers, and not for the rest of us, and anything they do is ultimately not for our benefit, but…
> Would not lower rates mean more consumer spending > the feeling that the federal reserve is here for the wealthy In a sense, the disconnect between these two things is also the explanation. The behavior of consumers is not directly coupled to the fed rate. What you or I do with our money won't change if the rate goes up or down a percent, because we just don't have enough money for it to make a difference to our da…
Most of the changes from high interest rates are indirect to me. Because rates are up my company is selling less product - our customers have to pay for loans and in turn that means some of them decide to keep/maintain an old product that they would replace if the cost (mostly interest rates, but we can also play with our price) was a little less. In turn this means that my cost of living raise this year was pretty bad (didn't meet inflation), so I've been forced to cut something small (or take from savings).
Now I do have friends who were laid off because of the economy and having trouble finding a job. As always things are worse for those people.
Rates up, rates down, I'm so confused. Too much liquidity supposedly means inflation, too little liquidity means deflation. Would not lower rates mean more consumer spending, thereby injecting more spending and fluidity in the system? I can't help but shake the feeling that the federal reserve is here for the wealthy, the bankers, and not for the rest of us, and anything they do is ultimately not for our benefit, but…
> Rates up, rates down, I'm so confused. You're making a lot of strong assertions for someone who acknowledges they don't understand pretty basic concepts in macroeconomics. > Would not lower rates mean more consumer spending, thereby injecting more spending and fluidity in the system? If managing the economics of a country was as simple as recognizing a relationship like, "when we move this number up, then things ge…
Rates up, rates down, I'm so confused. Too much liquidity supposedly means inflation, too little liquidity means deflation. Would not lower rates mean more consumer spending, thereby injecting more spending and fluidity in the system? I can't help but shake the feeling that the federal reserve is here for the wealthy, the bankers, and not for the rest of us, and anything they do is ultimately not for our benefit, but…
Lower rates does increase spending. However it does this by adding money: inflation - which in turns makes prices go up. So in the long run this makes things worse despite the short term gain. This is just one part of the full consideration, there are lots of other effects from any interest rate that they need to work out.
> Corporate earnings are through the roof. They’re doing great. The consumer is hanging in there. The labor market is hanging in there. Are we though? Thank god corporate profits are ok...
Don't corporate profits depend on the 99% (the poors) spending? If the consumers fail, and stop spending, how long before the corporations feel mildly inconvenienced?
Earlier quoted context omitted.
Don't corporate profits depend on the 99% (the poors) spending? If the consumers fail, and stop spending, how long before the corporations feel mildly inconvenienced?
I'm not sure about the 99%, but I think we've established in the last few years that the economy can keep humming along quite nicely in the short term with only 10% of the population increasing their spending significantly in real terms. I doubt it would work with 0.1%. 1% might be enough.
I'm unsure why people still believe we need the middle class to lead consumption for our economy to be "good"? At this point I feel like there is a lot of evidence out there directly contradicting that belief.
Do I think that's good for the nation? Not at all.
But I think fixing the fact that such an economy is terrible for the nation should be a separate discussion. Obviously we need to do something to support the 90%, and I support doing something in service of that goal. We should do it as soon as possible.
But I think people like Kashkari are thinking only about the economy itself. Which is kind of his job. It's the job of our elected officials to fix issues arising from the inability of the 90% to take advantage of the economy as well as they had historically.
Yen carry trade unwind, inflation in Japan, hit to the NASDAQ, AI bubble pops, Japanese investors pull money back home and Treasuries lose its largest foreign creditor. Who knows what happens next.
What happens next is that US Treasury yields go to the moon, making previously bought treasuries nearly worthless. Most bank deposits in the US are instantly used to buy treasuries, so severe devaluation of those less-than-mature bonds on the secondary markets means that money held by banks is not really there. Should there be a larger than average number of people making withdrawals, bonds would be dumped on the sec…