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What is your point?Others are catching on to my point.
The Fed is Putting Free Markets at Risk
Afraid to tell us how the Fed is putting free markets at risk rather than trying to preserve them????Um, the thread title.what i
What is your point?Others are catching on to my point.
The Fed is Putting Free Markets at Risk
I assumed it would be screamingly obvious. It isn't the Fed's role to jump in, buy trillions of crap securities, and then unwind them every time we need to be saved from ourselves. First the NY Fed pours in over a trillion over the last couple of years to unfreeze short term credit markets, now it's up over FIVE trillion with this.Afraid to tell us how the Fed is putting free markets at risk rather than trying to preserve them????Um, the thread title.what i
What is your point?Others are catching on to my point.
The Fed is Putting Free Markets at Risk
I can tell that within the industry, the opinion is that this is the status quo going forward. No going back now.Very interesting perspective, and much in line with some cogitations of my own. Hopefully, this present situation will last just long enough to confront us all with the necessity of and willingness for fundamental redirection. Not long enough, and too few will be convinced. Too long, and too much damage will have been done.In short, we now have a Federal Reserve that is an ongoing, active, aggressive, and very influential participant in our economic system.
The Fed is going to buy ETFs. What does it mean?
The central bank will use some new tools to help stabilize markets.www.marketwatch.com
While some of the lessons from the Meltdown remain unlearned, ONE thing we clearly DID learn was that the Fed can step in, purchase an ENORMOUS amount of assets to bail us out temporarily, and then unwind their balance sheet by selling those assets back off.
But now, with it coming in to buy huge swaths of specific ETFs, we're in all new territory. We now have a MASSIVE, all-new, and incredibly powerful tactic for buoying the economy. The variable regarding its effectiveness of this approach will be whether it has enough time to unwind its assets before it goes back in to save us by buying NEW assets.
I'll let the wingers from each end play their winger games with this, but this fundamental change in capitalism is going to cut across all party lines, so blaming the other guy is bullshit.
This may have little to do with the 'fed', and much more to do with individual socio-political awareness.
Look, in all honesty, this could turn out to be a good thing, an improvement. A Fed that can swoop in and buy pretty much anything like this could be a handy tool.
The problem is that when we find a shiny new toy, we find a way to break it before long.
you didn’t say what you imagine the feds role is if not lender of last resort during day say a pandemic. Capitalism requires money and it is not clear that that use the money impedes capitalism rather than keeps it running smoothly.I assumed it would be screamingly obvious. It isn't the Fed's role to jump in, buy trillions of crap securities, and then unwind them every time we need to be saved from ourselves. First the NY Fed pours in over a trillion over the last couple of years to unfreeze short term credit markets, now it's up over FIVE trillion with this.Afraid to tell us how the Fed is putting free markets at risk rather than trying to preserve them????Um, the thread title.what i
What is your point?Others are catching on to my point.
The Fed is Putting Free Markets at Risk
I know that, for you guys, it's fine when Trump is in office, but that's not the Fed's mandate, regardless of the President.
The Federal Reserve is now as important to the everyday economy as the consumer. That's not free market capitalism. We should be examining why our system needs this crutch, but we're not.
how man TEA Partiers here do you see talking ill about the President who has spent $5T in 3 years?
In short, we now have a Federal Reserve that is an ongoing, active, aggressive, and very influential participant in our economic system.
The Fed is going to buy ETFs. What does it mean?
The central bank will use some new tools to help stabilize markets.www.marketwatch.com
While some of the lessons from the Meltdown remain unlearned, ONE thing we clearly DID learn was that the Fed can step in, purchase an ENORMOUS amount of assets to bail us out temporarily, and then unwind their balance sheet by selling those assets back off.
But now, with it coming in to buy huge swaths of specific ETFs, we're in all new territory. We now have a MASSIVE, all-new, and incredibly powerful tactic for buoying the economy. The variable regarding its effectiveness of this approach will be whether it has enough time to unwind its assets before it goes back in to save us by buying NEW assets.
I'll let the wingers from each end play their winger games with this, but this fundamental change in capitalism is going to cut across all party lines, so blaming the other guy is bullshit.
It was from the day it was created. And???In short, we now have a Federal Reserve that is an ongoing, active, aggressive, and very influential participant in our economic system.
You clearly don't know what's been happening. Or you're being obtuse for partisan reasons. Play with someone else.It was from the day it was created. And???In short, we now have a Federal Reserve that is an ongoing, active, aggressive, and very influential participant in our economic system.
Good stuff. Three points:The OP raises an important point and the linked article is informative. It inevitably goes over the heads of people who see the world in only “Democratic vs. Republican” partisan terms. The new “Modern Monetary Theory” postulate that the state (semi-private) bank (our Federal Reserve) and treasury of the the U.S. can and should essentially create unlimited credit and fiat money to backstop American capitalism when it is in crisis — this is a dramatic move towards U.S. state capitalism.
Unlike in 2008, the purchasing of corporate credit assets probably will never be “unwound” successfully, just as U.S. budgets will probably never again be “balanced” through taxation. The problem — besides the obvious ones of “crony capitalism” and “moral hazard” — is that greater financial bailouts of ridiculously over-leveraged institutions will make the real productive efficiency of the economy and real profitability of corporations less important. This may “save” corporations and Hedge Funds and asset values, but it will have negative influence on our competiveness in world markets in the long run.
Of course the greatest U.S. (mostly internet-based) world corporations do not need funding and will continue to grow at the expense particularly of basic and small-scale industry. Because for now neither the U.S. government nor the Federal Reserve nor a divided Congress is considering planning or financing long-term strategic investments, or appropriate infrastructure and education Investments, or apparently even necessary state bankruptcy avoidance (due to party-partisan interests), and because social-democratic reforms in taxation and healthcare are also verboten, a continuing (probably dramatic) increase in inequality is inevitable.
I can’t discuss here the inevitable international ramifications this will have, nor do I have a very good idea how this new economic stage will finally end.
You clearly don't know what's been happening.
Good stuff. Three points:The OP raises an important point and the linked article is informative. It inevitably goes over the heads of people who see the world in only “Democratic vs. Republican” partisan terms. The new “Modern Monetary Theory” postulate that the state (semi-private) bank (our Federal Reserve) and treasury of the the U.S. can and should essentially create unlimited credit and fiat money to backstop American capitalism when it is in crisis — this is a dramatic move towards U.S. state capitalism.
Unlike in 2008, the purchasing of corporate credit assets probably will never be “unwound” successfully, just as U.S. budgets will probably never again be “balanced” through taxation. The problem — besides the obvious ones of “crony capitalism” and “moral hazard” — is that greater financial bailouts of ridiculously over-leveraged institutions will make the real productive efficiency of the economy and real profitability of corporations less important. This may “save” corporations and Hedge Funds and asset values, but it will have negative influence on our competiveness in world markets in the long run.
Of course the greatest U.S. (mostly internet-based) world corporations do not need funding and will continue to grow at the expense particularly of basic and small-scale industry. Because for now neither the U.S. government nor the Federal Reserve nor a divided Congress is considering planning or financing long-term strategic investments, or appropriate infrastructure and education Investments, or apparently even necessary state bankruptcy avoidance (due to party-partisan interests), and because social-democratic reforms in taxation and healthcare are also verboten, a continuing (probably dramatic) increase in inequality is inevitable.
I can’t discuss here the inevitable international ramifications this will have, nor do I have a very good idea how this new economic stage will finally end.
1. We clearly have a shiny new toy now, and while that's fine in a vacuum, the question going forward will be whether the Fed can unwind quickly enough from the LAST time it saved our butts to the NEXT time it has to save our butts. Otherwise its balance sheet becomes a joke, much like our debt. So we've now created a "Fed intervention cycle" to keep an eye on.
2. I very much agree that there is no way to know how this will play out. On one hand, we may actually have discovered a missing link within capitalism, one that runs counter to the regular business and debt cycle. On the other, we may end up becoming so dependent on it that it distorts markets (which is already happening) and becomes a debt-like behemoth.
3. As usual, when the shit hits the fan, we run around in a panic looking for the nearest band-aid -- without seriously examining why the shit hit the fan in the first place. Why do our credit markets keep freezing? Has our debt cycle become "too big to fail"? If we don't start looking seriously at this, those who are attacking capitalism will have even more ammo to work with.
whether the Fed can unwind quickly enough from the LAST time it saved our butts to the NEXT time it has to save our butts.
we may end up becoming so dependent on it that it distorts markets (which is already happening) and becomes a debt-like behemoth.
1) hit fan in this case because of Coronawhy the shit hit the fan in the first place. Why do our credit markets keep freezing? Has our debt cycle become "too big to fail"? If we don't start looking seriously at this, those who are attacking capitalism will have even more ammo to work with.
Care to tell us what you called???Did I call it?
Why, yes. Yes I did.