bearister said:
The US jobs report was a warning sign even before the Omicron surge
https://www.theguardian.com/commentisfree/2022/jan/09/us-jobs-report-warning-sign-even-before-omicron-surge?CMP=Share_iOSApp_Other
He has no idea what he's talking about.going4roses said:
https://vm.tiktok.com/TTPdMHVavb/
So Robert Reich, the lawyer who masquerades as economist, has a great headline. So the attachment to the article is the jobs report says there was a 3.7% drop in unemployment SEASONALLY ADJUSTED. This during an inflationary time when wages are increasing faster than prices as will be discussed below. You have unanimous consensus that things are good in the economy by pretty much every liberal and conservative on this board, and that the FED should slow down the economy by laying off QE. Never mind there were massive job increases following vaccinations and fiscal infusions when a large part of the county opened-up that resulted in huge jobs increases. Now Reich say a 200K new jobs and 3.7% reduction in joblessness means the sky is freaking falling. Take back that victory lap Messers. Biden and Powell. The economy sucks. The guys on Fox News must be right.DiabloWags said:bearister said:
The US jobs report was a warning sign even before the Omicron surge
https://www.theguardian.com/commentisfree/2022/jan/09/us-jobs-report-warning-sign-even-before-omicron-surge?CMP=Share_iOSApp_Other
Typical opinion piece by Robert Reich.
Never mind that the labor market is extremely tight and jobless claims are still near a 52 year low.
wifeisafurd said:So Robert Reich, the lawyer who masquerades as economist, has a great headline. So the attachment to the article is the jobs report says there was a 3.7% drop in unemployment SEASONALLY ADJUSTED. This during an inflationary time when wages are increasing faster than prices as will be discussed below. You have unanimous consensus that things are good in the economy by pretty much every liberal and conservative on this board, and that the FED should slow down the economy by laying off QE. Never mind there were massive job increases following vaccinations and fiscal infusions when a large part of the county opened-up that resulted in huge jobs increases. Now Reich say a 200K new jobs and 3.7% reduction in joblessness means the sky is freaking falling. Take back that victory lap Messers. Biden and Powell. The economy sucks. The guys on Fox News must be right.DiabloWags said:bearister said:
The US jobs report was a warning sign even before the Omicron surge
https://www.theguardian.com/commentisfree/2022/jan/09/us-jobs-report-warning-sign-even-before-omicron-surge?CMP=Share_iOSApp_Other
Typical opinion piece by Robert Reich.
Never mind that the labor market is extremely tight and jobless claims are still near a 52 year low.
Everyone one us with a Econ or Business degree (and its everyone left or right), agrees with the FED to start to lay off the QE. I'm sure some nimrod will call us cruel and evil because Polisci Bob says real wages are falling. But, the same report Reich quoted for December job growth also shows wage growth was very striking - the average hourly wages rose by 19 cents, the largest increase observed in many years. On an annualized basis, this increase amounts to 7.3%, which happens to greater than annualized rate of inflation for the annualized inflation rate for the same December period. Why did Polisci Bob say It was just the opposite? Reich likes to use different time periods to say different things. This month is good for quoting numbers for employment, but for real wages I better use the past twelve month average figure that includes a time when temporary Covid shortages increased prices, because using the same two time periods doesn't fit my narrative. But I'm sure Bob can get a bunch of polisci majors to believe him than those stupid PHD economists at the FED and in the White House are clueless. Here is the best part of it. We just had a bunch of posts from people on the left and right saying why QE increases asset values and increases wealth concentration and Bearister and polisci Bob are saying don't stop QE.
Good time for that post on economic literacy again.
Let this be a warning to everyone how you deflect, and the criticism you get for it. QE equals exactly what the Reich article was talking about.dajo9 said:wifeisafurd said:So Robert Reich, the lawyer who masquerades as economist, has a great headline. So the attachment to the article is the jobs report says there was a 3.7% drop in unemployment SEASONALLY ADJUSTED. This during an inflationary time when wages are increasing faster than prices as will be discussed below. You have unanimous consensus that things are good in the economy by pretty much every liberal and conservative on this board, and that the FED should slow down the economy by laying off QE. Never mind there were massive job increases following vaccinations and fiscal infusions when a large part of the county opened-up that resulted in huge jobs increases. Now Reich say a 200K new jobs and 3.7% reduction in joblessness means the sky is freaking falling. Take back that victory lap Messers. Biden and Powell. The economy sucks. The guys on Fox News must be right.DiabloWags said:bearister said:
The US jobs report was a warning sign even before the Omicron surge
https://www.theguardian.com/commentisfree/2022/jan/09/us-jobs-report-warning-sign-even-before-omicron-surge?CMP=Share_iOSApp_Other
Typical opinion piece by Robert Reich.
Never mind that the labor market is extremely tight and jobless claims are still near a 52 year low.
Everyone one us with a Econ or Business degree (and its everyone left or right), agrees with the FED to start to lay off the QE. I'm sure some nimrod will call us cruel and evil because Polisci Bob says real wages are falling. But, the same report Reich quoted for December job growth also shows wage growth was very striking - the average hourly wages rose by 19 cents, the largest increase observed in many years. On an annualized basis, this increase amounts to 7.3%, which happens to greater than annualized rate of inflation for the annualized inflation rate for the same December period. Why did Polisci Bob say It was just the opposite? Reich likes to use different time periods to say different things. This month is good for quoting numbers for employment, but for real wages I better use the past twelve month average figure that includes a time when temporary Covid shortages increased prices, because using the same two time periods doesn't fit my narrative. But I'm sure Bob can get a bunch of polisci majors to believe him than those stupid PHD economists at the FED and in the White House are clueless. Here is the best part of it. We just had a bunch of posts from people on the left and right saying why QE increases asset values and increases wealth concentration and Bearister and polisci Bob are saying don't stop QE.
Good time for that post on economic literacy again.
bearister and Robert Reich didn't say anything about QE. You have a habit of taking things people say and then adding things that are convenient for the argument you want to make. You shouldn't do that.
Actually Dajo said QE when disagreeing with the points raised in Reich article posted by Bearsiter, to wit:dajo9 said:wifeisafurd said:So Robert Reich, the lawyer who masquerades as economist, has a great headline. So the attachment to the article is the jobs report says there was a 3.7% drop in unemployment SEASONALLY ADJUSTED. This during an inflationary time when wages are increasing faster than prices as will be discussed below. You have unanimous consensus that things are good in the economy by pretty much every liberal and conservative on this board, and that the FED should slow down the economy by laying off QE. Never mind there were massive job increases following vaccinations and fiscal infusions when a large part of the county opened-up that resulted in huge jobs increases. Now Reich say a 200K new jobs and 3.7% reduction in joblessness means the sky is freaking falling. Take back that victory lap Messers. Biden and Powell. The economy sucks. The guys on Fox News must be right.DiabloWags said:bearister said:
The US jobs report was a warning sign even before the Omicron surge
https://www.theguardian.com/commentisfree/2022/jan/09/us-jobs-report-warning-sign-even-before-omicron-surge?CMP=Share_iOSApp_Other
Typical opinion piece by Robert Reich.
Never mind that the labor market is extremely tight and jobless claims are still near a 52 year low.
Everyone one us with a Econ or Business degree (and its everyone left or right), agrees with the FED to start to lay off the QE. I'm sure some nimrod will call us cruel and evil because Polisci Bob says real wages are falling. But, the same report Reich quoted for December job growth also shows wage growth was very striking - the average hourly wages rose by 19 cents, the largest increase observed in many years. On an annualized basis, this increase amounts to 7.3%, which happens to greater than annualized rate of inflation for the annualized inflation rate for the same December period. Why did Polisci Bob say It was just the opposite? Reich likes to use different time periods to say different things. This month is good for quoting numbers for employment, but for real wages I better use the past twelve month average figure that includes a time when temporary Covid shortages increased prices, because using the same two time periods doesn't fit my narrative. But I'm sure Bob can get a bunch of polisci majors to believe him than those stupid PHD economists at the FED and in the White House are clueless. Here is the best part of it. We just had a bunch of posts from people on the left and right saying why QE increases asset values and increases wealth concentration and Bearister and polisci Bob are saying don't stop QE.
Good time for that post on economic literacy again.
bearister and Robert Reich didn't say anything about QE. You have a habit of taking things people say and then adding things that are convenient for the argument you want to make. You shouldn't do that.
Quote:
I think we should look at zero interest rate policy (ZIRP) and QE separately.
calbear93 said:DiabloWags said:Cal_79 said:
Nothing wrong with wealth discrepancy on its own. But the portion created by loose monetary policy to artificially drive down unemployment rate and stroke the speculative investment will always result in a crash and create massive damage to the late comers and middle class. Don't get me wrong. I have been able to take care of myself and my future generation based on the longest bull market as well as from prior equity grants / hedge fund interests. But loose monetary policies have increased economic risks, increased wealth gap, and increased homelessness. On top of that, when you have inflation created by loose monetary policies and loose fiscal policies (geez, what could go wrong with stimulating demand beyond supply levels with government handouts and flooding the market with cheap money), you create more harm to the poor than to the rich who are asset owners. For example, the asset bubbles impact real estate prices that lead to pricing out middle class and lead to NIMBY behavior, even by those who otherwise profess to care about the poor (always easier to talk about what others should do instead of making actual personal sacrifices - but when the rubber meets the road, most people who profess to debate in favor of liberal policies will argue against actual affordable real estate in their neighborhood that impacts their "wealth"). If people lived the way they talk, you would not have the greatest wealth disparities and homelessness in the most liberal and heavily taxed places.
Diablo - you are absolutely right about rotation and market crash. And you clearly have a lot more experience in the markets than I do, and the way I have been successful is willing to listen to people like you who are smarter than me on specific topics and ignore the morons who are posing.DiabloWags said:calbear93 said:DiabloWags said:Cal_79 said:
Nothing wrong with wealth discrepancy on its own. But the portion created by loose monetary policy to artificially drive down unemployment rate and stroke the speculative investment will always result in a crash and create massive damage to the late comers and middle class. Don't get me wrong. I have been able to take care of myself and my future generation based on the longest bull market as well as from prior equity grants / hedge fund interests. But loose monetary policies have increased economic risks, increased wealth gap, and increased homelessness. On top of that, when you have inflation created by loose monetary policies and loose fiscal policies (geez, what could go wrong with stimulating demand beyond supply levels with government handouts and flooding the market with cheap money), you create more harm to the poor than to the rich who are asset owners. For example, the asset bubbles impact real estate prices that lead to pricing out middle class and lead to NIMBY behavior, even by those who otherwise profess to care about the poor (always easier to talk about what others should do instead of making actual personal sacrifices - but when the rubber meets the road, most people who profess to debate in favor of liberal policies will argue against actual affordable real estate in their neighborhood that impacts their "wealth"). If people lived the way they talk, you would not have the greatest wealth disparities and homelessness in the most liberal and heavily taxed places.
I have enjoyed your posting Calbear '93 and wanted to circle back and touch base on your post above.
There is no doubt that inflation hurts the poor more than the rich. It's obvious, and it flies in the face of people like Robert Reich who dont seem to care about inflation. He just wants more and more cheap money pumped out by the FED so that the unemployment rate can head lower and wages will head higher. Never mind what higher rents, food and energy prices (from inflation) due to the poor.
On another note, I have learned over the years (since I started trading stock-options back in 1980 while living in the dorms at Cal, after having sucked my middle class Dad into opening a small joint-trading account) that markets dont necessarily have to CRASH after a long period of loose monetary policy. One of the primary reasons that this current Bull Market has had such amazing "legs" in my mind, is because of the incredible amount of ROTATION that has occurred.
As you well know, that ROTATION was in full display in February of 2021, when high-tech, high-growth, companies with tremendous cash burn were sold and rotated out of in favor of the economic "re-opening" trades made in the "value" stock universe of cyclical names. I believe that the FAANGs started to be sold in the Fall of 2020 in anticipation of the economy re-opening, but the ROTATION really became apparent in February of 2021. In fact, many of the growth names that I focus on (in Medical Diagnostics) have been in an 11 month Bear Market since February of 2021. These companies are now trading at extremely attractive price to sales multiples and in my opinion and at some point, there will be a ROTATION back into them; perhaps when the economy slows down. They (in my opinion) will actually become another "re-opening" trade as soon as doctor's offices open back up to field reps and patients feel more confidence that Covid is no longer an issue, especially our seniors.
In any event, I'm not surprised that some of those "stimulus" checks found their way into a Robinhood trading account and wound up sending highly speculative companies with crappy management teams (like Gamestop and AMC) to the Moon. When you hand-out free money to people (some of my younger restaurant worker friends) already sitting on the couch watching Netflix all day long who are making $55,000 annually from additional supplemental unemployment benefits during Covid (thank you Golden State!), it's just human behavior to want to explore maximizing your earnings. Unfortunately, those who participated in this bubble using margin (which Robinhood pushed) got a very expensive lesson taught to them.
My point is that this kind of speculation was a primary result of FISCAL policy and not monetary policy.
PS. My BA-133 Investments course taught by Professor Hoag at Haas was a waste of time. We used a book on Modern Portfolio Theory and the Efficient Market Hypothesis by William Sharpe to learn about how everything was already "priced" into the market. What a horrible class. There is no better way to learn about the markets than actually having a little bit of "skin" in the game and reading the WSJ every day. I'm eternally grateful for my Dad giving me that chance at such a young age.
Not sure why you think QE and controlling the Fed Funds rate have different outcomes. QE is usually reserved for when zero interest rate is not having enough stimulus on economy, but is intended for the same outcome. When you reduce interest rate to zero, you will artificially discourage bonds and encourage investments in equity, the same result you will see when you flood the market with liquidity, with equity winning out and people like Musk and Bezos gaining wealth from their equity ownership.dajo9 said:
Here is how I began my discussion of QE on page 8 of this thread:Quote:
I think we should look at zero interest rate policy (ZIRP) and QE separately.
QE and controlling the Fed Funds rate are, in fact, two separate actions. The distinction is important because they have different outcomes. Reich is talking about the Fed Funds rate. You put words into Reich's mouth about QE. You did the same thing to me upthread about income taxes. That is true, no matter how many paragraphs you write attacking me and rewriting what I wrote.
calbear93 said:dajo9 said:
Here is how I began my discussion of QE on page 8 of this thread:Quote:
I think we should look at zero interest rate policy (ZIRP) and QE separately.
QE and controlling the Fed Funds rate are, in fact, two separate actions. The distinction is important because they have different outcomes. Reich is talking about the Fed Funds rate. You put words into Reich's mouth about QE. You did the same thing to me upthread about income taxes. That is true, no matter how many paragraphs you write attacking me and rewriting what I wrote.
It may be "intended" for the same outcome but QE directly inflates assets primarily held by the wealthy, while Fed Funds interest rate adjustments changes the cost of financed consumption and / or investment. There is no way that such different mechanisms are going to have the same outcome.Quote:
Not sure why you think QE and controlling the Fed Funds rate have different outcomes. QE is usually reserved for when zero interest rate is not having enough stimulus on economy, but is intended for the same outcome.
Changes to the Fed Funds interest rate have impacts beyond just what happens with assets. It has a much broader impact on the economy and more direct impacts on the poor and middle class. I also take issue with your use of the word "artificial". Let me rephrase what you said in a way that I think is more correct:Quote:
When you reduce interest rate to zero, you will artificially discourage bonds and encourage investments in equity, the same result you will see when you flood the market with liquidity, with equity winning out and people like Musk and Bezos gaining wealth from their equity ownership.
The number zero is just a number. The equilibrium interest rate is usually above zero but from the time of the Great Recession until sometime in 2021 it was negative. Therefore a zero interest rate was still too high during that time, which is why it was not providing enough stimulus to the economy. The appropriate response in that situation is not QE, in my opinion, it is fiscal spending - which we finally did in 2020 / 2021 and we finally brought the equilibrium interest rate above zero.Quote:
When you reduce interest rates to below the equilibrium interest rate*, you will artificially discourage bonds and encourage investments in equity,
OK, agree with what you wrote.dajo9 said:calbear93 said:dajo9 said:
Here is how I began my discussion of QE on page 8 of this thread:Quote:
I think we should look at zero interest rate policy (ZIRP) and QE separately.
QE and controlling the Fed Funds rate are, in fact, two separate actions. The distinction is important because they have different outcomes. Reich is talking about the Fed Funds rate. You put words into Reich's mouth about QE. You did the same thing to me upthread about income taxes. That is true, no matter how many paragraphs you write attacking me and rewriting what I wrote.It may be "intended" for the same outcome but QE directly inflates assets primarily held by the wealthy, while Fed Funds interest rate adjustments changes the cost of financed consumption and / or investment. There is no way that such different mechanisms are going to have the same outcome.Quote:
Not sure why you think QE and controlling the Fed Funds rate have different outcomes. QE is usually reserved for when zero interest rate is not having enough stimulus on economy, but is intended for the same outcome.Changes to the Fed Funds interest rate have impacts beyond just what happens with assets. It has a much broader impact on the economy and more direct impacts on the poor and middle class. I also take issue with your use of the word "artificial". Let me rephrase what you said in a way that I think is more correct:Quote:
When you reduce interest rate to zero, you will artificially discourage bonds and encourage investments in equity, the same result you will see when you flood the market with liquidity, with equity winning out and people like Musk and Bezos gaining wealth from their equity ownership.The number zero is just a number. The equilibrium interest rate is usually above zero but from the time of the Great Recession until sometime in 2021 it was negative. Therefore a zero interest rate was still too high during that time, which is why it was not providing enough stimulus to the economy. The appropriate response in that situation is not QE, in my opinion, it is fiscal spending - which we finally did in 2020 / 2021 and we finally brought the equilibrium interest rate above zero.Quote:
When you reduce interest rates to below the equilibrium interest rate*, you will artificially discourage bonds and encourage investments in equity,
* The equilibrium interest rate is a theoretical interest rate at which the demand for money equals the supply of money.
The opportunities for 2022 must be limitlesscalbear93 said:OK, agree with what you wrote.dajo9 said:calbear93 said:dajo9 said:
Here is how I began my discussion of QE on page 8 of this thread:Quote:
I think we should look at zero interest rate policy (ZIRP) and QE separately.
QE and controlling the Fed Funds rate are, in fact, two separate actions. The distinction is important because they have different outcomes. Reich is talking about the Fed Funds rate. You put words into Reich's mouth about QE. You did the same thing to me upthread about income taxes. That is true, no matter how many paragraphs you write attacking me and rewriting what I wrote.It may be "intended" for the same outcome but QE directly inflates assets primarily held by the wealthy, while Fed Funds interest rate adjustments changes the cost of financed consumption and / or investment. There is no way that such different mechanisms are going to have the same outcome.Quote:
Not sure why you think QE and controlling the Fed Funds rate have different outcomes. QE is usually reserved for when zero interest rate is not having enough stimulus on economy, but is intended for the same outcome.Changes to the Fed Funds interest rate have impacts beyond just what happens with assets. It has a much broader impact on the economy and more direct impacts on the poor and middle class. I also take issue with your use of the word "artificial". Let me rephrase what you said in a way that I think is more correct:Quote:
When you reduce interest rate to zero, you will artificially discourage bonds and encourage investments in equity, the same result you will see when you flood the market with liquidity, with equity winning out and people like Musk and Bezos gaining wealth from their equity ownership.The number zero is just a number. The equilibrium interest rate is usually above zero but from the time of the Great Recession until sometime in 2021 it was negative. Therefore a zero interest rate was still too high during that time, which is why it was not providing enough stimulus to the economy. The appropriate response in that situation is not QE, in my opinion, it is fiscal spending - which we finally did in 2020 / 2021 and we finally brought the equilibrium interest rate above zero.Quote:
When you reduce interest rates to below the equilibrium interest rate*, you will artificially discourage bonds and encourage investments in equity,
* The equilibrium interest rate is a theoretical interest rate at which the demand for money equals the supply of money.
dajo9 said:
Here is how I began my discussion of QE on page 8 of this thread:Quote:
I think we should look at zero interest rate policy (ZIRP) and QE separately.
QE and controlling the Fed Funds rate are, in fact, two separate actions. The distinction is important because they have different outcomes. Reich is talking about the Fed Funds rate. You put words into Reich's mouth about QE. You did the same thing to me upthread about income taxes. That is true, no matter how many paragraphs you write attacking me and rewriting what I wrote.
Good stuff, Diablo.DiabloWags said:
Well said Calbear 93
My learning "curve" started out with penny mining stocks (on the pink sheets) during the end of the inflationary boom when Paul Volker decided to jack rates up to kill off inflation in 1980. It was the tail-end of all kinds of speculation in the market (ie. Gold, Silver, the Hunt Brothers, Oil & Gas Drilling, etc), and some of these penny mining stocks were still "popping". I would buy something called XYZ Oil & Gas at 0.47 cents and try and sell it at 0.85 cents on a "spike" that most likely came from some rumor in a Denver bar. I believe that the FED actually got the Fed Funds rate as high as 20% in June of 1981. Inflation wound up peaking at 14.9% in March of 1980 and it fell below 3% a few years later by 1983. - - - I actually heard of people that had Auto Loans at 21% back then!.
Once a week, the William O'Neill chart books were delivered from Los Angeles to the brokerage office that I hung out at and I would run to the copying machine to make copies of my favorite stocks and their charts. As an undergrad, I carried these charts around as though they were my school books. I was trying to soak up as much technical analysis as I could. I was camping out in my Dad's broker's office during every summer vacation and school holiday while I was an undergrad at CAL trying to learn as much as I could. My broker didnt mind, cause he was just as enthusiastic about "trading" as I was (as opposed to pure money management and running the typical conservative "balanced" portfolio of 60/40 bonds to stocks) - - - AND he was making some commissions off of me. - - - This was back in the days when everyone was tracking the M1 and M2 money supply measures to figure out if Fed Chairman Volker was done with his "tightening" phase. We would all sit there in front of the little floor mounted News Tape machine and wait till 1:10PM on every Thursday for the Money Supply numbers to be announced. Of course, there was still 5 minutes of stock-index futures trading left (they traded 15 minutes after the NY close) and the Value Line, S&P 500, and NYA futures would invariably go BONKERS in those last 5 minutes reacting to the Money Supply numbers. This was my first lesson of just how powerful the FED was.
When I graduated in 1982, we were in a terrible recession and the only firms that were hiring back then were the Big 8 accounting firms. I hated accounting and didnt concentrate on it at Haas. My roommate had emphasized Accounting and places like Touche-Ross were starting people out at $19,000 a year. My roomie was tall and had played on a Championship team over at Campolindo High in Moraga, so they offered him close to $21,000 because they also wanted him on their Basketball Team. Through a friend of my broker, I was able to get a job on the Pacific Coast Stock Exchange (Los Angeles) as a clerk for a market-maker, making $1,000 a month. I was literally sleeping on the couch of a friend of mine's Mom's place in Westwood. She was in management in IBM and working 60+ hour weeks. But it dawned pretty quickly on me that I wasnt going to be able to find a place of my own in LA that fit my budget, so within just a few months I packed it in and high-tailed it back up I-5 and to my parents place in NorCal.
One day, I read an interview in Barrons about a trader in NYC named Victor Sperandeo, aka Trader Vic.
I called him up out of the blue and introduced myself. He loved mentoring people and told me to stay in touch. He was actually in the mode of hiring a bunch of young guys and placing them in various stock-option pits on the AMEX and in the stock-index futures pit of the NYFE in NYC. It wasnt before long, that I had more stock-index futures trading under my belt. I may have done just a tad better than break-even over the course of 6 months, but he liked what he saw and invited me to move to NYC and start working for him as a trader in a 50/50 deal. - - - I wound up spending the next 14 years in NYC.
Fast forward and after a decade or two of "trading" I eventually got to the point of getting away from short-term scalping and swing trading. Some of it had been successful. And some of it had not been successful. Mistakes were made along the way and I definitely underwent a learning "curve". But as I got older, I began getting more involved in a "fundamental" approach and away from the technical analysis that I had grown up on. I realized that the only real way to genuinely generate wealth was to take a page out of the book of Stanley Druckenmiller and put a lot of eggs in one basket, and watch that basket carefully. It was the complete opposite of investing in a well-diversified portfolio. Of course the risk was exponentially higher doing so, but if you did the homework there was also the opportunity for great reward.
They can have the same and different outcomes. Both reduce the effective interest rate, and the interest does not have to be zero. The FED has been using QE during C-19, even when rates were positive. The history was QE originally was implemented as a policy, when the interest rate approached zero. Dajo is right that it went below zero, thus banks arguably could arbitrage just borrowing and going to their best customers and giving them "points' to borrow at nominal rates. Know this first hand. Dajo is right when he says the different methods to increase liquidity and reduce the effective rates for stimulus have different impacts besides their impacts on interest rates.calbear93 said:Not sure why you think QE and controlling the Fed Funds rate have different outcomes.dajo9 said:
Here is how I began my discussion of QE on page 8 of this thread:Quote:
I think we should look at zero interest rate policy (ZIRP) and QE separately.
QE and controlling the Fed Funds rate are, in fact, two separate actions. The distinction is important because they have different outcomes. Reich is talking about the Fed Funds rate. You put words into Reich's mouth about QE. You did the same thing to me upthread about income taxes. That is true, no matter how many paragraphs you write attacking me and rewriting what I wrote.
It is commendable you were able to retire at such a young age. I went a different direction which included a stint as CFO of a NYSE company and law, and then into real estate. Real estate is something from which you never retire, and it is amazing how much it it impacted by economic and other governmental polices. But I'm still working. My wife is a Republican, we both dislike Trump, and my wife hates it when I vote for a Democrat, which happens, and screams at me every time that I just increased our taxes! While I love the country and the economic freedom it still provides, I'm willing to admit our county isn't always fair. Both my wife and I have family members who are minorities. My wife's family now has a more latin flavor and believe it or not, LDS/Poly, while mine is now in part Asian and Black. We both find abhorrent what seems to be a growing tolerance of prejudice is some circles, and perhaps overstating things, blame Trump.calbear93 said:
Love this country, love the Constitution, hate Trump and my former party, but also hate socialism and entitlement. Not sure where I belong anymore, but I just know that I want to leave a better world for others than what I found.
No matter whether you or I call ourselves Republicans or Democrats, we seem to have similar views on government and economics.wifeisafurd said:It is commendable you were able to retire at such a young age. I went a different direction which included a stint as CFO of a NYSE company and law, and then into real estate. Real estate is something from which you never retire, and it is amazing how much it it impacted by economic and other governmental polices. But I'm still working. My wife is a Republican, we both dislike Trump, and my wife hates it when I vote for a Democrat, which happens, and screams at me every time that I just increased our taxes! While I love the country and the economic freedom it still provides, I'm willing to admit our county isn't always fair. Both my wife and I have family members who are minorities. My wife's family now has a more latin flavor and believe it or not, LDS/Poly, while mine is now in part Asian and Black. We both find abhorrent what seems to be a growing tolerance of prejudice is some circles, and perhaps overstating things, blame Trump.calbear93 said:
Love this country, love the Constitution, hate Trump and my former party, but also hate socialism and entitlement. Not sure where I belong anymore, but I just know that I want to leave a better world for others than what I found.
I want the next generations of my family to not be shackled by a Sanders like socialist government. Much of this board when it talks about inequality, sees only two ways of governing a country. One is the Sanders Socialist way in which what matters is not the people but the government in which decisions affecting people's lives are taken from them, instead of being taken by them. A government, borrowing here from a former politician, in which property, profit and savings are taken from the people instead of being held among them, even in the most absurd ways of taxing are contemplated such as taxing phantom income. A place in which directives from EU-like technocrats replace incentives and make decisions as to which elites will be allowed to thrive and who will not. It is sold to people who look at individual success and achievement with disdain. The other is a free economic system which not only guarantees the freedom of each individual citizen, it has historically been the way to increase the prosperity of this nation as a whole, even while providing some form of safety net, whether that be private of government funded. It is not perfect, but it is better than the socialist alternative.
The enemy of life… is indifference. Let's stand together and share our gifts so as many of us as possible get it right!calbear93 said:
Not sure where I belong anymore, but I just know that I want to leave a better world for others than what I found.
wifeisafurd said:
Latest on the FED:
CCAiC0tqbW1DMmtuSUNNmAEB
Comments on his prepared text. Let's see what Powell actually says tomorrow.
wifeisafurd said:It is commendable you were able to retire at such a young age. I went a different direction which included a stint as CFO of a NYSE company and law, and then into real estate. Real estate is something from which you never retire, and it is amazing how much it it impacted by economic and other governmental polices. But I'm still working. My wife is a Republican, we both dislike Trump, and my wife hates it when I vote for a Democrat, which happens, and screams at me every time that I just increased our taxes! While I love the country and the economic freedom it still provides, I'm willing to admit our county isn't always fair. Both my wife and I have family members who are minorities. My wife's family now has a more latin flavor and believe it or not, LDS/Poly, while mine is now in part Asian and Black. We both find abhorrent what seems to be a growing tolerance of prejudice is some circles, and perhaps overstating things, blame Trump.calbear93 said:
Love this country, love the Constitution, hate Trump and my former party, but also hate socialism and entitlement. Not sure where I belong anymore, but I just know that I want to leave a better world for others than what I found.
I want the next generations of my family to not be shackled by a Sanders like socialist government. Much of this board when it talks about inequality, sees only two ways of governing a country. One is the Sanders Socialist way in which what matters is not the people but the government in which decisions affecting people's lives are taken from them, instead of being taken by them. A government, borrowing here from a former politician, in which property, profit and savings are taken from the people instead of being held among them, and even in the most absurd ways of taxing are contemplated such as taxing phantom income. A place in which directives from EU-like technocrats replace incentives and make decisions as to which elites will be allowed to thrive and who will not. It is sold to people who look at individual success and achievement with disdain. The other is a free economic system, which not only is supposed to guarantee the freedom of each individual citizen, it has historically been the way to increase the prosperity of this nation as a whole, even while providing some form of safety net, whether that be private of government funded. It is not perfect, but it is better than the socialist alternative.
I would not want to raise anyone's taxes a ridiculous amount, but I feel like many people (like me) can pay a little more and some can even pay a little more than that, Big C said:wifeisafurd said:It is commendable you were able to retire at such a young age. I went a different direction which included a stint as CFO of a NYSE company and law, and then into real estate. Real estate is something from which you never retire, and it is amazing how much it it impacted by economic and other governmental polices. But I'm still working. My wife is a Republican, we both dislike Trump, and my wife hates it when I vote for a Democrat, which happens, and screams at me every time that I just increased our taxes! While I love the country and the economic freedom it still provides, I'm willing to admit our county isn't always fair. Both my wife and I have family members who are minorities. My wife's family now has a more latin flavor and believe it or not, LDS/Poly, while mine is now in part Asian and Black. We both find abhorrent what seems to be a growing tolerance of prejudice is some circles, and perhaps overstating things, blame Trump.calbear93 said:
Love this country, love the Constitution, hate Trump and my former party, but also hate socialism and entitlement. Not sure where I belong anymore, but I just know that I want to leave a better world for others than what I found.
I want the next generations of my family to not be shackled by a Sanders like socialist government. Much of this board when it talks about inequality, sees only two ways of governing a country. One is the Sanders Socialist way in which what matters is not the people but the government in which decisions affecting people's lives are taken from them, instead of being taken by them. A government, borrowing here from a former politician, in which property, profit and savings are taken from the people instead of being held among them, and even in the most absurd ways of taxing are contemplated such as taxing phantom income. A place in which directives from EU-like technocrats replace incentives and make decisions as to which elites will be allowed to thrive and who will not. It is sold to people who look at individual success and achievement with disdain. The other is a free economic system, which not only is supposed to guarantee the freedom of each individual citizen, it has historically been the way to increase the prosperity of this nation as a whole, even while providing some form of safety net, whether that be private of government funded. It is not perfect, but it is better than the socialist alternative.
wifeisafurd, with deference to your knowledge and expertise in this area, I'd like to take issue with two ideas in your second paragraph above...
Lesser issue: When you describe the "Sanders Socialist way" you make it sound like it resembles Marxist Socialism, when, in fact -- correct me if I'm wrong -- it much more closely resembles Western European democratic socialism, in which basically, the government taxes more and provides more services. Yes, some other differences as well, but much closer to our system than Marxist Socialism.
Greater issue: The way you present the choices, you make it seem like there are only two. Either a "Sanders like socialist government", or a "free economic system". To the extent that I am reading your point correctly, that is either a simplification or a mischaracterization, It is not an either/or, but rather a continuum, with any number of landing spots in between. Take taxes, for example: By varying the tax sources and/or the tax rates, virtually anything is possible. Same with the role of government and government expenditures.
Which is where someone like me comes in. I would choose a path somewhere between your two scenarios. I believe that a regulated free market is the best way of allocating resources and I also believe in personal responsibility, but I also believe we should do more to provide opportunity to all our citizens. Yes, this might involve many people paying more taxes, but not a lot more, hopefully. (I would also love to cut defense spending and government waste, but easier said than done.) I agree with you and others that a wealth tax is not feasible, so we would have to look for other ways.
Sorry if you would have to pay more taxes (I would, too) and especially if your wife would scream at you. I know from personal experience that that is no fun!
I'm not watching the hearing but Powell is not somebody I want in charge of anything. He uses QE to boost assets which mainly benefits the wealthy and has contributed to pricing out the middle class from housing. He began this round of QE before Covid-19 existed - back in Fall 2019 to protect asset prices. It's no wonder that a bunch of retail investors have recklessly invested in the market when the Federal Reserve provides a completely rational expectation that they will not allow stock valuations to drop.82gradDLSdad said:
Forgive this tangential post...I watch CNBC every morning. Today I get to watch Fed chairman Powell field questions from senators. It reinforces why smart people don't want to hand over to these people any more tax money than they have to. Blowhards, buffoons, senile, etc. pick your own words to describe most of these folks. It's hard to watch. Luckily, a sane, rational, smart, bipartisan person gets to do most of the speaking: Powell. You may not like all of his actions but I wish more folks like him were in charge of the government rather than the grandstanders that are asking the questions. It's embarrassing to our country.
dajo9 said:I'm not watching the hearing but Powell is not somebody I want in charge of anything. He uses QE to boost assets which mainly benefits the wealthy and has contributed to pricing out the middle class from housing. He began this round of QE before Covid-19 existed - back in Fall 2019 to protect asset prices. It's no wonder that a bunch of retail investors have recklessly invested in the market when the Federal Reserve provides a completely rational expectation that they will not allow stock valuations to drop.82gradDLSdad said:
Forgive this tangential post...I watch CNBC every morning. Today I get to watch Fed chairman Powell field questions from senators. It reinforces why smart people don't want to hand over to these people any more tax money than they have to. Blowhards, buffoons, senile, etc. pick your own words to describe most of these folks. It's hard to watch. Luckily, a sane, rational, smart, bipartisan person gets to do most of the speaking: Powell. You may not like all of his actions but I wish more folks like him were in charge of the government rather than the grandstanders that are asking the questions. It's embarrassing to our country.
Democratically elected representatives may not always be perfect but in general, they do a better job for us than technocrats like Powell.
Big C said:
wifeisafurd, with deference to your knowledge and expertise in this area, I'd like to take issue with two ideas in your second paragraph above...
Lesser issue: When you describe the "Sanders Socialist way" you make it sound like it resembles Marxist Socialism, when, in fact -- correct me if I'm wrong -- it much more closely resembles Western European democratic socialism, in which basically, the government taxes more and provides more services. Yes, some other differences as well, but much closer to our system than Marxist Socialism.
Greater issue: The way you present the choices, you make it seem like there are only two. Either a "Sanders like socialist government", or a "free economic system". To the extent that I am reading your point correctly, that is either a simplification or a mischaracterization, It is not an either/or, but rather a continuum, with any number of landing spots in between. Take taxes, for example: By varying the tax sources and/or the tax rates, virtually anything is possible. Same with the role of government and government expenditures.
Which is where someone like me comes in. I would choose a path somewhere between your two scenarios. I believe that a regulated free market is the best way of allocating resources and I also believe in personal responsibility, but I also believe we should do more to provide opportunity to all our citizens. Yes, this might involve many people paying more taxes, but not a lot more, hopefully. (I would also love to cut defense spending and government waste, but easier said than done.) I agree with you and others that a wealth tax is not feasible, so we would have to look for other ways.
Sorry if you would have to pay more taxes (I would, too) and especially if your wife would scream at you. I know from personal experience that that is no fun!
dajo9 said:
I'm not watching the hearing but Powell is not somebody I want in charge of anything. He uses QE to boost assets which mainly benefits the wealthy and has contributed to pricing out the middle class from housing. He began this round of QE before Covid-19 existed - back in Fall 2019 to protect asset prices. It's no wonder that a bunch of retail investors have recklessly invested in the market when the Federal Reserve provides a completely rational expectation that they will not allow stock valuations to drop.
Democratically elected representatives may not always be perfect but in general, they do a better job for us than technocrats like Powell.
Agreed 100%82gradDLSdad said:
Forgive this tangential post...I watch CNBC every morning. Today I get to watch Fed chairman Powell field questions from senators. It reinforces why smart people don't want to hand over to these people any more tax money than they have to. Blowhards, buffoons, senile, etc. pick your own words to describe most of these folks. It's hard to watch. Luckily, a sane, rational, smart, bipartisan person gets to do most of the speaking: Powell. You may not like all of his actions but I wish more folks like him were in charge of the government rather than the grandstanders that are asking the questions. It's embarrassing to our country.
I know this history.DiabloWags said:dajo9 said:
I'm not watching the hearing but Powell is not somebody I want in charge of anything. He uses QE to boost assets which mainly benefits the wealthy and has contributed to pricing out the middle class from housing. He began this round of QE before Covid-19 existed - back in Fall 2019 to protect asset prices. It's no wonder that a bunch of retail investors have recklessly invested in the market when the Federal Reserve provides a completely rational expectation that they will not allow stock valuations to drop.
Democratically elected representatives may not always be perfect but in general, they do a better job for us than technocrats like Powell.
Just to clarify.
The "QE" (as you call it) back in October of 2019 was not conducted as a monetary stimulus operation to protect asset prices, as you have claimed above.
It was an effort to increase liquidity amongst banks, given that the interest rate on REPOS had spiked in September and had continued to stay elevated for months. A combination of events had sucked dollars out of the financial system. The FED bought TREASURY BILLS (not bonds). And by expanding its balance sheet, the FED increased the financial system's supply of bank reserves, which in doing so, helped take pressure off of the REPO rate.
QE is used by the FED to help set market expectations.
The purchase of T-Bills in the Fall of 2019 was a technical operation to fix part of the "plumbing" of the financial system.
There's a big difference.
