That worked for about 45 minutes and then the market dropped right back down again. Incredible. At this rate there won't be enough liquidity to cover these sell-offs if they continue. I don't think that's ever happened before.
Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
91–100 of 367 posts
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#92Earlier quoted context omitted.
Uh what? Fed = Monetary policy == Make sure money can flow "appropriately" Government = Fiscal Policy == "Who gets money" I don't know how your quote is relevant at all.
the part where it says the fed is a government institution...
Specifically, "the fed is a private bank" is a common refrain among goldbugs and currency conspiracy theorists, and it's not true, no matter how often it's repeated.
Not saying the OP is a goldbug or currency conspiracy theorist, but they're the only people I ever see tossing that out so quickly and without any elaboration on what they mean.
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#93"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.
$1.5 Trillion goes into a certain aspect of the money supply to help maintain credit spreads, etc. This is completely different than your agenda list expenses. If you flooded the entire US economy with $1.5 trillion in straight cash it would likely cause inflation, but the Fed isn't injecting it into that level of the money supply.
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#94Earlier quoted context omitted.
The Federal Reserve is not a government entity and has nothing to do with the budget, which is set by the US congress.
The Fed does not set the budget, and is independent of the three branches of government, that's true, but... > The Federal Reserve System is an independent government institution that has private aspects. The System is not a private organization and does not operate for the purpose of making a profit. From https://en.wikipedia.org/wiki/Structure_of_the_Federal_Reser...
Two sentences later in the paragraph your quote came from:
>As an independent institution, the Federal Reserve System has the authority to act on its own without prior approval from Congress or the President.
And later:
>The twelve Federal Reserve banks provide the financial means to operate the Federal Reserve System. Each reserve bank is organized much like a private corporation so that it can provide the necessary revenue to cover operational expenses and implement the demands of the board. A member bank is a privately owned bank that must buy an amount equal to 3% of its combined capital and surplus of stock in the Reserve Bank within its region of the Federal Reserve System.
*edit - Also, the source for your quote is cited as "BoG 2005", with a dead/nonexistent URL
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#95"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.
Folks. Companies listed on the stock market hire average folks who need the money to provide for their spouses and kids. Companies that provide staples to you like food and gas and transportation and medical supplies. These are the companies you are actively shorting. Think about that. This isn’t the same as 2008.
Only when those companies are trying to raise money. In the meantime, it is the speculators and the institutionals that hold a large chunk of what has been floated.
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#96Earlier quoted context omitted.
Folks. Companies listed on the stock market hire average folks who need the money to provide for their spouses and kids. Companies that provide staples to you like food and gas and transportation and medical supplies. These are the companies you are actively shorting. Think about that. This isn’t the same as 2008.
Company's welfare is somewhat connected to their stock price, but it's a really weak relation. The stock market is mostly a gambling simulator that runs beside the economy as it's own little micro-economy - this doesn't make it worthless but it does make this sort of a statement ring really hollow.
The connection with the real world is made whenever a company floats some of their stock.
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#97In times of panic, remember that in the worst likely scenario, this virus will slow consumer spending, increase demand for hospitals, stagnate productivity for about 12 months, and kill about 0.4% of the world's population (using Spanish flu infection patterns for reference, which infected ~25% of the world population). At that point, there will be sufficient herd immunity (and likely effective treatments or vaccines…
Past performance is no guarantee of future success. Using the worst case scenario so far as meaning "worst possible scenario" is a fallacy (consider that the past "worst case" was already surprising to people back then because it was worse than the "past's past").
Not to imply we should panic over a low probability event, just pointing out that we should be careful about Kurtosis.
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#98What can a retail investor really do ? Is this even a free market. Cannot even do passive investing safely enough.
What do you mean? Passive investing has been a sound strategy throughout every other financial crisis we've weathered. There's no reason to believe it won't keep working now.
Just hold the course, and keep investing.
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#99Yet another bailout for wall street. Why couldn't these investors stop buying starbucks every day and save up like the rest of us?
This is not a wall Street bail out. This is a main Street bail out. Every American's life savings is in the stock market... Don't conflate the two please.
>Every American's life savings is in the stock market
First, you are exaggerating. Secondly, why is this a good thing? Maybe the whole damn world should re-evaluate this.
99% of people are not "investing", they are throwing money in something that should magically keep going up over time because everyone wants it to magically go up over time.
Re: Fed to inject $1.5T to prevent ‘unusual disruptions’ in markets
#100"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…
> They are providing short-term loans
They're also buying assets, e.g. Treasuries. This is about increasing liquidity, not printing money.