Rolling US Economy Into The Shitbin Thread

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http://bigpicture.typepad.com/comments/2007/10/more-inflation.html

El Tomboto, Thursday, 18 October 2007 23:44 (twelve years ago) link

personally I'm applying for a civil servant position ASAP

El Tomboto, Thursday, 18 October 2007 23:45 (twelve years ago) link

Just FYI, during the 1930s depression, many civil servants were paid with vouchers rather than cash, because local governments were unable to collect property taxes and their receipts fell into the shitbin.

Aimless, Friday, 19 October 2007 00:12 (twelve years ago) link

Economy's doing poorly enough as it stands, why do we deliberately want to roll it into the shitbin?

Abbott, Friday, 19 October 2007 00:14 (twelve years ago) link

Because that way Hillary can rescue us all.

Dandy Don Weiner, Friday, 19 October 2007 00:17 (twelve years ago) link

lol property taxes

El Tomboto, Friday, 19 October 2007 00:18 (twelve years ago) link

shitbin's a great word, BTW.

Dandy Don Weiner, Friday, 19 October 2007 00:20 (twelve years ago) link

you been loving my thread titles lately

El Tomboto, Friday, 19 October 2007 00:26 (twelve years ago) link

i came to this country some time ago with little more than a crippling debt burden in GB Pounds and the shirt on my back. i used to have to send back $1,200 each month to pay off my UK debt, and now I'm sending back over $1,400 to cover the same amount of debt repayment. that's two and a half thousand dollars disappearing from my tiny disposable income every year, for no explicable reason. i *heart* the decline of the US economy.

Roberto Spiralli, Friday, 19 October 2007 00:27 (twelve years ago) link

anyway why start this thread now because the bit where ritholtz points out that domino's pizza can't print new menus fast enough to keep up with inflation was pretty fucking amazing

I wish rasheed wallace was still around to show us the latest and greatest exploding bubble blogs

El Tomboto, Friday, 19 October 2007 00:28 (twelve years ago) link

wow Roberto that was some shitty timing, that sucks

El Tomboto, Friday, 19 October 2007 00:29 (twelve years ago) link

This was in the paper today:

Mortgage defaults

Hit an annual rate of 1.5 million in September. That compares with 900,000 last year from fewer than 800,000 in 2005. At the current rate, more than one million Americans will lose their homes to foreclosure, making this the worst housing recession since the Second World War.

Housing starts

Sank to a 14-year low of 1.19 million in September. Starts are a vital economic engine, creating jobs and growth as people stuff their homes with sofas and TVs. Starts peaked at 2.3 million in early 2006, and the decline will be a drag on the rest of the economy until the slide stops.

Mortgages

A quarter of the roughly 50 million U.S. home mortgages are subprime. That's seven times the number of high-risk mortgages there were in 2001. That means that many more marginal homeowners have mortgages, making it far more likely they'll wind up in default.

House prices

Fell 3.2 per cent in the second quarter. Prices are falling faster and more broadly than they have in decades, according to the closely watched Case-Shiller index.

http://www.theglobeandmail.com/servlet/story/LAC.20071018.IBUSECONOMY18/TPStory/Business

everything, Friday, 19 October 2007 00:29 (twelve years ago) link

where the hell is rasheed anyway?

economic blogs I read (they're all fairly liberal):

http://calculatedrisk.blogspot.com/
http://angrybear.blogspot.com/
http://delong.typepad.com/sdj/
http://www.marginalrevolution.com/marginalrevolution/
http://bigpicture.typepad.com/
http://www.janegalt.net/

Dandy Don Weiner, Friday, 19 October 2007 00:37 (twelve years ago) link

In regard to inflation, in the USA during the past three years inflation has been soaring - but almost entirely in the housing sector. The fact that people are encouraged to see their houses as investments rather than as expenses doesn't mean that skyrocketing housing costs weren't inflationary. They were.

As the bubble market bursts, I predict a recession with an extra added bonus of inflation running close to 10% - before the end of 2008. As it has for the past 30 years, the official CPI will understate the real inflation rate. It was rigged under Reagan so that government entitlement programs indexed to the CPI would not increase at the true pace of inflation.

If Bush continues to shovel shit on the dollar right up to the end of his term in January 2009, the inflation rate could hit 15%-20% by 2010.

Aimless, Friday, 19 October 2007 00:55 (twelve years ago) link

There are some good economics articles put up here as well:
http://www.VoxEU.org

stet, Friday, 19 October 2007 01:02 (twelve years ago) link

Which shit on the dollar are you referring to?

Dandy Don Weiner, Friday, 19 October 2007 01:02 (twelve years ago) link

As the bubble market bursts, I predict a recession with an extra added bonus of inflation running close to 10% - before the end of 2008.

lol

aaaaaaaaaaaaaaaaaaaaaaaaaa, Friday, 19 October 2007 06:11 (twelve years ago) link

this is why i live in canada!

J0rdan S., Friday, 19 October 2007 06:13 (twelve years ago) link

oh wait.

J0rdan S., Friday, 19 October 2007 06:13 (twelve years ago) link

Guys, this is a good time stay in academia right?

Catsupppppppppppppp dude 茄蕃, Friday, 19 October 2007 11:51 (twelve years ago) link

It's a good time to learn a European language.

Nubbelverbrennung, Friday, 19 October 2007 13:33 (twelve years ago) link

Prime shit examples:

When Bush was elected in 2000, the federal budget was in surplus and the national debt was being paid down. Had this state of affairs continued, as projected, it would have led both to lower interest rates and a strong dollar, together. Instead, Bush submitted a series of enormous tax cuts to the Republican-controlled Congress and lobbied them through. Immediately, the CBO's projected budget surpluses turned to projected deficits for the next decade.

Bush also initiated a war of choice, not necessity, in Iraq. This war has already cost well over $700 billion. Yet, Bush insisted on making his tax cuts permanent. Overall, the national debt has increased under Bush by about $2 trillion in seven years. This represents a difference of about $3 trillion of debt from what was projected at the start of his first term.

Because, due to Bush's tax cuts and other policies, the Federal government was in a far weaker position to stimulate the economy when the recession started after 9/11, almost the entire stimulus was delivered via lower interest rates. Because these rate cuts were artificial, and not based on a stronger dollar, this stimulus not only inflated the current housing bubble, but it also undercut the dollar even more than the ballooning national debt did.

Now the dollar is at an all-time low against the euro and the canadian dollar. However, the incomes of the top 10% of American households have increased at a good clip, while the lower 50% of households have seen a decrease in income after inflation. This is largely thanks to Bush's shitty policies. I expect more of the same mismanagement until he is gone.

Aimless, Saturday, 20 October 2007 18:36 (twelve years ago) link

I agree with everything you've just said. You're predictions still seem a tad extreme on the downside though, if I may so.

aaaaaaaaaaaaaaaaaaaaaaaaaa, Saturday, 20 October 2007 18:50 (twelve years ago) link

i wonder if income inequality will ever arrive as a political issue in this country. americans tend to not begrudge the rich - so it'll have to be more of a "for everyone's good" type of angle. no?

jhøshea, Saturday, 20 October 2007 18:54 (twelve years ago) link

I remember the 1970s and early 80s quite well. Back then people couldn't belileve it, either. Bush has done a bangup job of recreating many of the same policy errors under Johnson and Nixon that led to raging stagflation back then, except the underlying economy is now weaker than it was in the 1970s and the oil shocks we are likely to get are not political, as when OPEC was formed, but structural.

Oil will exceed $100/barrel some time this winter. The ever-weakening dollar will lead to smaller profit margins and rising retail prices on all imported goods (which means almost everything we buy in the USA). Transport costs will rise with pil prices. Stock prices will erode along with profits. With so many savings tied up in stocks and home equity, consumer spending will be crunched, and personal debt and bancruptcies will rise like a tide. Businesses will retrench and unemployment will rise. No end in sight.

I hope I am wrong.

Aimless, Saturday, 20 October 2007 19:07 (twelve years ago) link

Anyone want to join my modern-day James Gang? We shall ride across the lower Midwest, robbing and pillaging.

milo z, Saturday, 20 October 2007 19:09 (twelve years ago) link

sounds fun

jhøshea, Saturday, 20 October 2007 19:13 (twelve years ago) link

Sorry, I don't want to relocate. But this scheme sounds ripe for franchising.

Aimless, Saturday, 20 October 2007 19:14 (twelve years ago) link

Oil will exceed $100/barrel some time this winter. The ever-weakening dollar will lead to smaller profit margins and rising retail prices on all imported goods (which means almost everything we buy in the USA). Transport costs will rise with pil prices. Stock prices will erode along with profits. With so many savings tied up in stocks and home equity, consumer spending will be crunched, and personal debt and bancruptcies will rise like a tide. Businesses will retrench and unemployment will rise. No end in sight.

I hope I am wrong.

-- Aimless, Saturday, 20 October 2007 19:07 (14 minutes ago) Link

The coming of $100/barrel oil is not Bush's fault. It's yours and mine and everyone else's for using too damned much energy. I agree Bush could and should have done a lot more with policy to encourage energy efficiency, but there's little he could have done to stop oil's eventual rise to that price level.

Hurting 2, Saturday, 20 October 2007 19:26 (twelve years ago) link

Part of the pricing of oil represents the weakness of the dollar. This hurts the USA more than it does other countries. US citizens are paid in dollars and the US government collects revenue in dollars, so they are stuck. EU countries can use euros to buy increasingly cheap dollars, so they don't see the same rise in prices as we do. The weakness of the dollar is mainly Bush's fault.

Aimless, Saturday, 20 October 2007 19:31 (twelve years ago) link

The US also uses way more oil than other countries.

Hurting 2, Saturday, 20 October 2007 19:33 (twelve years ago) link

he could have done to stop oil's eventual rise to that price level.
Not starting a war in Iraq would definitely have helped here.

stet, Saturday, 20 October 2007 19:57 (twelve years ago) link

arrgh, if that won't work then
http://calculatedrisk.blogspot.com/2007/10/imf-mortgage-reset-chart.html

El Tomboto, Monday, 22 October 2007 17:47 (twelve years ago) link

tombot u r freakin me out

gff, Monday, 22 October 2007 17:50 (twelve years ago) link

i hope my small apartment + modest savings plan + job in "information services" is enough to weather the shitstorm, if it comes. i got myself out of credit card debt a few months ago, at least

gff, Monday, 22 October 2007 17:53 (twelve years ago) link

well if you can hold down a job and don't have to worry about an ARM reset you should be okay, it's the homeowner with kids and a subprime loan and two cars who ought to be shitting themselves

El Tomboto, Monday, 22 October 2007 17:58 (twelve years ago) link

apart from some student loans and binging on credit cards over a few years, i'm kind of debt phobic.

which has actually made me lose out over the past several years, i realize, since i pay for EVERYTHING with a debit/check card... i could have just paid that balance on a credit card with some rewards scheme and has some air miles or something

gff, Monday, 22 October 2007 18:00 (twelve years ago) link

rolling gff personal finances into the shitbin thread, ha

gff, Monday, 22 October 2007 18:01 (twelve years ago) link

This will give you a boner Tombot

http://nymag.com/guides/money/2007/39952/

Dandy Don Weiner, Wednesday, 31 October 2007 11:30 (twelve years ago) link

the economy increased by 3.9% this quarter! bull market forever, baby. economy's better than ever. golden age.

yet me and so many people I know are getting laid off next month. granted we're all in the writing/design field, but urhhhhh. gggg.

burt_stanton, Wednesday, 31 October 2007 14:58 (twelve years ago) link

http://nymag.com/guides/money/2007/catastrophist071105_560.jpg
http://nymag.com/guides/money/2007/catastrophist071105_2_560.jpg

^^^ lol

most of that guy's scenario is not really news to regular bigpicture/CR readers I don't think. But #5, the "we don't pay attention" thing, yeah, well, evidently the awareness campaign is underway, but hell if the big players are paying attention.

He also leaves out the approaching demographic catastrophe as millions of inexperienced thirtysomethings and even some late-twenties kids are forced to move into arguably tougher jobs that the boomers have been holding for two decades. Beyond the social security and healthcare costs associated with mass retirement, I don't really know if this generation has the work ethic and definitely not the rolodex to just start filling in and not fuck up royally. too busy updating their linkedin pages.

El Tomboto, Wednesday, 31 October 2007 15:11 (twelve years ago) link

can someone explain what "being upside down on your mortgage" means, in plain English?

Tracer Hand, Wednesday, 31 October 2007 16:14 (twelve years ago) link

essentially, owing more than your home is worth.

Dandy Don Weiner, Wednesday, 31 October 2007 17:10 (twelve years ago) link

also Tombot I'm not going to blame this generation as much as I blame their parents.

Dandy Don Weiner, Wednesday, 31 October 2007 17:11 (twelve years ago) link

isn't that the way people buy homes? by paying for the privilege of a loan?

Tracer Hand, Wednesday, 31 October 2007 17:12 (twelve years ago) link

When you enter into a contract with a bank for a mortgage, both you and the bank assume that the property value will not plummet. The bank doesn't want you to default any more than you want to default. But if for whatever reason you need to sell your home, and you can't get what you owe on it, then you will owe the difference to the bank. And the bank knows that when that happens, you probably will not have enough assets to cover the difference.

Predatory-type loans (which seems like a nebulous description to me) typically compound the problem because they have higher transaction rates (points, etc.)

Dandy Don Weiner, Wednesday, 31 October 2007 17:17 (twelve years ago) link

oh certainly! well played baby boom letting healthcare slide for the 20 years you've owned the electorate

El Tomboto, Wednesday, 31 October 2007 17:18 (twelve years ago) link

yeah Tracer it's also called "negative equity"

El Tomboto, Wednesday, 31 October 2007 17:19 (twelve years ago) link

shoulda been called YouWorkWithoutBenefits

a Mets fan who gave up on everything in the mid '80s (Dr Morbius), Tuesday, 1 October 2019 18:02 (one month ago) link

https://www.fastcompany.com/90285552/the-most-powerful-person-in-silicon-valley

Returning to this article nine months later reminds me what the real gambit was

WeWork’s potential lies in what might happen when you apply AI to the environment where most of us spend the majority of our waking hours. I head down one floor to meet Mark Tanner, a WeWork product manager, who shows me a proprietary software system that the company has built to manage the 335 locations it now operates around the world. He starts by pulling up an aerial view of the WeWork floor I had just visited. My movements, from the moment I stepped off the elevator, have been monitored and captured by a sophisticated system of sensors that live under tables, above couches, and so forth. It’s part of a pilot that WeWork is testing to explore how peopule move through their workday. The machines pick up all kinds of details, which WeWork then uses to adjust everything from design to hiring.

I ask what else we can spy on. He taps the screen and calls up a large map displaying each of the 83 cities in which WeWork operates. From here, we can drop down into any of them: Around the world in 80 nanoseconds.

“Basically, every object will have the potential to be a computer,” adds David Fano, WeWork’s chief growth officer, who is overseeing development of this new technology. “We are looking at, what does that world look like when the office is this highly connected, intelligent thing?”

This is why Son is investing billions in WeWork.

Milton Parker, Tuesday, 1 October 2019 18:38 (one month ago) link

First paragraph quote should end in ellipsis (i should cop to snipping the bit where the We guy promises no identity data is captured - but of course that promise is absolute nonsense)

The recent bit where people were mockingly saying 'why were people treating them like a technology company?' - well, in the long run, the idea was that the real money was going to come from the data

Milton Parker, Tuesday, 1 October 2019 18:41 (one month ago) link

The machines pick up all kinds of details, which WeWork then uses to adjust everything from design to hiring.

This quickly glosses over whether the practical benefits produced by all that gee-whiz technology were ever valuable enough to offset its cost. Although it obviously was impressive eye candy to show to investors and journalists.

A is for (Aimless), Tuesday, 1 October 2019 18:45 (one month ago) link

worker 823-B seems to retire to the bathroom stall in a 10th percentile-trafficked hallway and makes motions their hand 99.99% match with "jerking off" 7.4 times per month while only once visiting the restroom on the way back to module 25

It is my great honor to post on this messageboard! (Karl Malone), Tuesday, 1 October 2019 19:04 (one month ago) link

recommend employee termination and powerhose purchase order, automatic notification to finance team...ok

It is my great honor to post on this messageboard! (Karl Malone), Tuesday, 1 October 2019 19:05 (one month ago) link

the fancy tools probably were mostly eye candy, with benefits that seemed to underline that promise that they weren't gleaning personal data but only overall trends

But the people who read Fast Company were sharp enough to realize that this is Google & Facebook's business model applied to the physical world in the form of identity data gleaned from identifiable bodies who both live and work near the same biosensors 24 hours a day, and were able to connect the dots

So the money was coming from people who absolutely recognized this as a tech company. Had they been given another 5-10 years to collect data, it is very likely the money would not have had to come from rent, but from the life data of their customers. They couldn't exactly brag about this in their IPO roll out, but for all the people dunking on them for 'not being good at math', the real question is why we allow Google & Facebook's business models to remain legal in the United States

Milton Parker, Tuesday, 1 October 2019 19:13 (one month ago) link

Because advertising is the second best thing America is best at, after military technology

El Tomboto, Tuesday, 1 October 2019 19:19 (one month ago) link

So, you're saying the idea was not that the data would in any way be used to improve "everything from design to hiring". That was just a smokescreen. The idea was that reams of data about their tenants would be collected and sold to outside companies.

A is for (Aimless), Tuesday, 1 October 2019 19:22 (one month ago) link

I imagine all that data gathering would make anyone concerned about business confidentiality a little hesitant to work there.

longtime caller, first time listener (man alive), Tuesday, 1 October 2019 19:30 (one month ago) link

🤟

El Tomboto, Tuesday, 1 October 2019 19:33 (one month ago) link

not a smokescreen, I imagine they trusted those machines to help with design & hiring -- but the real money is in gleaning personal data for AI to learn from. the trends lead to predictions, and accurate predictions can be sold. it doesn't have to be the kind of spying we've already grown acclimated to on gmail, though seeing as we've somehow learned to accept that -- you can see why investors were ready to gamble on what could happen if We became normal

about business confidentiality -- man alive's point is well taken, even given the fact that they're clearly after a different kind of data. I mean it all sounds insane & like I'm connecting one too many dots, but you really have to take Son at his word when he's discussing planet-sized ambitions like these. WeWork failed, but SenseTime is real

Milton Parker, Tuesday, 1 October 2019 20:10 (one month ago) link

it doesn't have to be the kind of spying we've already grown acclimated to on gmail

I don't use gmail, what is this a reference to?

Οὖτις, Tuesday, 1 October 2019 20:13 (one month ago) link

gmail searches your email for keywords in order to more effectively target advertising to you on other websites

Li'l Brexit (Tracer Hand), Tuesday, 1 October 2019 20:16 (one month ago) link

I just wouldn't really trust a company like that to not also be harvesting info off wifi connections, maybe even zooming in on screens with AI-assistance. I don't think my local Stumptown provider is doing that.

longtime caller, first time listener (man alive), Tuesday, 1 October 2019 20:16 (one month ago) link

Not yet, not for their own purposes

El Tomboto, Wednesday, 2 October 2019 01:14 (one month ago) link

WeWork/SoftBank thread:

You haven’t even begun to see the anger that will be unleashed on Adam Neumann. He has 15,000 people right now who are stuck cleaning up. They feel like circus clowns shovelling the shit. He has taken $750M & left a toxic waste cleanup.

interview @nymag https://t.co/dEb19Qjdjl

— Scott Galloway (@profgalloway) October 1, 2019

... (Eazy), Wednesday, 2 October 2019 02:15 (one month ago) link

Also the longer interview with Galloway linked in that tweet:

http://nymag.com/intelligencer/2019/10/marketing-expert-scott-galloway-on-wework-and-adam-neumann.html

... (Eazy), Wednesday, 2 October 2019 02:37 (one month ago) link

i've heard it's a fun read about things out of hand

Tart Prepper (Sufjan Grafton), Wednesday, 2 October 2019 02:43 (one month ago) link

At least it’s a ~13 hour gap this time, not the ~7 hour loop that happened to xyzzzz on the UK politics thread today

El Tomboto, Wednesday, 2 October 2019 02:45 (one month ago) link

Whoops, my bad

... (Eazy), Wednesday, 2 October 2019 02:58 (one month ago) link

> The machines pick up all kinds of details

And yet they can't tell who is swiping all the candy bars...

koogs, Wednesday, 2 October 2019 05:11 (one month ago) link

It's probably worker 823-B, I don't trust him.

koogs, Wednesday, 2 October 2019 05:13 (one month ago) link

https://www.bloomberg.com/news/articles/2019-10-01/toyota-typifies-ugly-month-with-16-slide-auto-sales-update

The severity of the slide stokes fears that a long-anticipated car sales collapse may be arriving. The slowdown puts auto dealers already struggling with shrinking profit margins in an even more precarious position.

El Tomboto, Wednesday, 2 October 2019 15:47 (one month ago) link

Hope so.

president of deluded fruitcakes anonymous (silby), Wednesday, 2 October 2019 16:04 (one month ago) link

By Lucy Bayly (NBC)

Wall Street took another slide on Wednesday, just two days into the new quarter, as disappointing employment data and a contraction in manufacturing activity fueled fears of a recession.

The Dow Jones Industrial Average dropped by around 525 points, or 1.97 percent, on Wednesday morning, wiping out all gains for the third quarter. The S&P 500 suffered a similar fate, falling 1.85 percent and erasing any yield for the last quarter. The tech-heavy Nasdaq lost 1.75 percent as Amazon, Apple, and Microsoft fell.

President Donald Trump blamed the Democrats for the market sell-off, tweeting that "impeachment nonsense" was driving down "the Stock Market, and your 401K’s."

a Mets fan who gave up on everything in the mid '80s (Dr Morbius), Wednesday, 2 October 2019 16:05 (one month ago) link

congratulations to the FTSE100 btw

𝔠𝔞𝔢𝔨 (caek), Wednesday, 2 October 2019 16:55 (one month ago) link

In other news, the market is apparently not too sanguine on $2000 exercise bikes that cost another $40/month to operate

longtime caller, first time listener (man alive), Wednesday, 2 October 2019 17:10 (one month ago) link

What now?

☮ (peace, man), Wednesday, 2 October 2019 23:23 (one month ago) link

oh peloton.

☮ (peace, man), Wednesday, 2 October 2019 23:26 (one month ago) link

oh pelotonpaws

Tart Prepper (Sufjan Grafton), Thursday, 3 October 2019 00:37 (one month ago) link

Good stuff in this (long) essay: http://bostonreview.net/forum/lenore-palladino-american-corporation-crisis%E2%80%94lets-rethink-it

DJI, Thursday, 3 October 2019 00:49 (one month ago) link

My 1-year old nephew who lacks basic language and object permanence will get bored and stop playing after two or three rounds of peekaboo, you know. https://t.co/DeSphYS8iE

— Quantian (@quantian1) October 11, 2019

𝔠𝔞𝔢𝔨 (caek), Friday, 11 October 2019 18:31 (one month ago) link

anecdotally, it seems like the market is more volatile these days - so many swings of 1% or more, in either direction. but maybe it's not?

https://fred.stlouisfed.org/series/VIXCLS

is ^that^ a decent indicator?

It is my great honor to post on this messageboard! (Karl Malone), Friday, 11 October 2019 18:40 (one month ago) link

That’s a measure of expected future volatility, but I think it tracks historical vol pretty well.

o. nate, Friday, 11 October 2019 18:42 (one month ago) link

it seems like it should be easy to find historical volatility data, but for some reason i keep running across the VIX instead

It is my great honor to post on this messageboard! (Karl Malone), Friday, 11 October 2019 18:49 (one month ago) link

but let's face it, i'm a rookie

It is my great honor to post on this messageboard! (Karl Malone), Friday, 11 October 2019 18:49 (one month ago) link

Look for S&P 500 realized volatility index. Realized is the more common term.

o. nate, Friday, 11 October 2019 18:58 (one month ago) link

thanks!

It is my great honor to post on this messageboard! (Karl Malone), Friday, 11 October 2019 19:19 (one month ago) link

every part of this graf is amazinghttps://t.co/IYkNJTn8ho pic.twitter.com/hfsCCdGm14

— rat king (@MikeIsaac) October 22, 2019

mookieproof, Tuesday, 22 October 2019 15:00 (three weeks ago) link

mr neumann's work sure is worth a lot of money, he must have really good ideas

It is my great honor to post on this messageboard! (Karl Malone), Tuesday, 22 October 2019 15:49 (three weeks ago) link

meritocracy

El Tomboto, Tuesday, 22 October 2019 16:02 (three weeks ago) link

someone who gets stuff decrypt this for me

What is the Fed not telling us?
I'm asking for a friend. pic.twitter.com/BZK0XuLloV

— Sven Henrich (@NorthmanTrader) October 23, 2019

Simon H., Sunday, 27 October 2019 18:30 (two weeks ago) link

That graph is in HOLY SHIT!!! territory. Some truly enormous financial institution(s) is hemorrhaging money in great, gushing multiple-firehose outflows and coming to the Fed to paper it over. Doesn't matter if it is a US bank or not, because in a dire emergency that other (think EU) central bank can't handle, the Fed is now willing to backstop them to the hilt. Timing suggests this may have more to do with Brexit than anything happening in the USA.

A is for (Aimless), Sunday, 27 October 2019 18:52 (two weeks ago) link

Repos are cash injections into investment banking. Very short term (usually, overnight) loans to increase liquidity and drive interest rates down.

Clearly the Fed sees lenders becoming cautious, and more astute market observers than myself have already declared we're presently in a recession which began late-summer.

The Fed has pumped hundreds of billions into the market through 'repo' offerings. Here's what they are, and why they're back for the first time since the financial crisis.

Self Disabuse (Sanpaku), Sunday, 27 October 2019 18:56 (two weeks ago) link

Unless the Fed is somehow driving banks to take repos they don't want or need, those repos are being actively sought by banks to address a need for liquidity that cannot be addressed by regular markets. Generally speaking, no bank wants to be pegged as a glutton for repos, because as soon as this appetite is known to the open markets, their reputation for safety and stability goes into the toilet - at least until the reason for the repos is driven into the open and can be assessed directly.

A is for (Aimless), Sunday, 27 October 2019 19:10 (two weeks ago) link

That's an interesting chart. I'd be also curious to understand why the Fed's repo operations went to zero in 2009 and stayed there for 10 years. From the graph, it looks like it was normal for the Fed to have 20-40 billion in repos outstanding in years before 2008.

o. nate, Monday, 28 October 2019 02:05 (two weeks ago) link

This is a guy who draws lines on charts

Based on the implications of this chart odds are very high the Fed will stop raising rates at or before the 1993 lows.
They are after all the lower highs team chasing the fantasy only dot plot. pic.twitter.com/1qxP63cz3Q

— Sven Henrich (@NorthmanTrader) August 15, 2018

𝔠𝔞𝔢𝔨 (caek), Monday, 28 October 2019 02:35 (two weeks ago) link

The guy's chart that bothered me was just the raw numbers from the Fed, without his overlaid slanty lines that are supposed to be predictive.

A is for (Aimless), Monday, 28 October 2019 02:48 (two weeks ago) link


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