Posted on 03/15/2020 2:12:17 PM PDT by billyboy15
The Federal Reserve, saying “the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” cut interest rates to zero on Sunday and launched a massive $700 billion quantitative easing program to shelter the economy from the effects of the virus.
Facing highly disrupted financial markets, the Fed also slashed the rate of emergency lending at the discount window for banks by 125 bps to 0.25%, and lengthened the term of loans to 90 days.
The Fed also cut reserve requirement ratios for thousands of banks to zero. In addition, in a global coordinated move by centrals banks, the Fed said the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank took action to enhance dollar liquidity around the world through existing dollar swap arrangements.
The banks lowered the rate on these swap line loans and extended the period for such loans. Fed Chairman Jerome Powell is scheduled to hold a press conference via telephone at 6 pm eastern time. The actions by the Fed appeared to be the largest single day set of moves the bank had ever taken, mirroring in many ways its efforts during the financial crisis that were rolled out over several months.
The quantitative easing will take the form of $500 billion of treasuries and $200 billion of agency-backed mortgage securities. The Fed said the purchases will begin Monday with a $40 billion installment.
The Fed cut rates to a new range of 0% to 0.25% from 1% to 1.25% and said it would remain there “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”
(Excerpt) Read more at cnbc.com ...
I have the "Jimmy Dean Index". A 1lb roll of Jimmy Dean Sausage was $2 several years or so ago. It's double that now.
The food inflation has been insane, and so many tricks have been used to disguise it, but you can't hide the doubling of prices in a decade or less.
Around here it’s a nickel per bottle/can or glass bottle that we pay.
Most recycle places pay by weight, and if you do the math (I did) you get about 1.76 for 50 plastic bottles by weight.
A nickel each would be 2.50.
They will give you a nickel each but with a limit of 50 bottles per person.
Then they closed the local one down, so you have to go 10 miles and they only take them by weight.
When I was a kid, you got what was paid for the bottle, 2 cents when I started recycling them.
And you could return glass bottles to any market and get the money for them. Back then they refilled them.
Now we are a disposable society,
home loans are now aroung 3.6%
I wonder if it will go down now, with the fed cut to zero?
I’d like to refinance at oh, say 1.5 or 2%.
The Wuhan hysteria can go only so long.
The Left hopes they can keep it going long enough to poison public confidence in the economy come election day.
Needed some fixing - I notice the market futures are way down again - the real movers and shakers sense so super 'get a lot richer' opportunities from all the panic...
Kind of ironic - we know that the Deep State and others use fear as a way to steer and control the people - we had the commie/nuke war threat until the Berlin Wall came down then it wasn’t viable anymore and up pops Globull Warming, which has many in fear that we’re gonna destroy the Earth even as we do less harm than past generations and none of the data actually supports anything but the earth’s climate and Mother Nature do not now, and never did have a “balance” and even if they did, we have no idea of how to maintain one or ‘fix’ things...all our efforts end up causing more harm....the coronavirus scare is no different - the panic-induced knee-jerking will cause more harm than the virus.
Folks who would be up in arms if the government decided to tell them they could not move freely are now begging that same government to lock them, and everyone else, down....I’d wager if, after doing that, the story ‘evolved” they would also go meekly to barb-wire surrounded camps/tent cities because the “latest info” said that’s the only way to stop it.
Even though we know that they use fear to guide and control us, so many can’t see it through the red haze of insane panic....they not only welcome the government controls, they beg for them...
And the fear mongers will try to leverage it...
Reminds me of a saying, by Ben Franklin, that many FReepers, who are now acting insane, used to showcase:
“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”
Well, this is what the rest of the World was hoping for - this is essentially a bailout for the entire world. This had to be coordinated with the rest of World Banks. The US Economy was killing them. With the drawdown of the US involvement in printing money (QE) from the BushII/Obama era, they are suffering the fate of Socialism and Communism - that they do not produce enough to support themselves in a Global Free Market Economy.
Stocks are going thru the Roof.
Well, this is what the rest of the World was hoping for - this is essentially a bailout for the entire world. This had to be coordinated with the rest of World Banks. The US Economy was killing them. With the drawdown of the US involvement in printing money (QE) from the BushII/Obama era, they are suffering the fate of Socialism and Communism - that they do not produce enough to support themselves in a Global Free Market Economy.
Stocks are going thru the Roof.
LOL! Well, you can't take it with you :)
And never ever try to catch a fallen wife.
The roof of the room below.
I know a cheeseburger at a place I go to was $4.50 and now its $8.
President Trump is a genius.
He knows full well all this dishonest finger-pointing and unnecessary panic is designed to make him look incompetent and uncaring, and to tank the economy to hurt his re-election chances.
But he also knows it’s a trap: if he denies the lies, and tries to debunk the hype and exaggeration, that’s what his enemies hope he will do. Then they can depict him as being political, paranoid, unresponsive, and in denial in the face of a national crisis, etc..
So what does he do? He doesn’t take the bait. Instead he leans into it - takes it seriously - calls a national emergency - travel bans - daily press briefings. But what he is really doing is very clever. He is finding ways to turn this crisis into a “teaching moment”.
The need for travel bans reinforces his long standing agenda of securing our borders. The need for vaccines, and other medical supplies and technology, reinforces his long-standing agenda of putting America first, reducing our dependency on global supply of critical strategic resources, with regard to China in particular. The need for a robust health system underscores his long standing agenda of a free and competitive private health industry vs. a nationalized single payer system, such as the ones failing to meet demand in Italy, China and elsewhere.
The need for a robust domestic economy to weather a crisis reenforces his agenda of cutting job killing regulations and taxes. He cut payroll taxes, got a Fed interest rate reduction and has encouraged Americans to spend money on domestic vacation destinations instead of abroad - all things that put America first, and things that he wanted to do anyway.
This Corona virus is clearly being exaggerated to hurt President Trump, but instead of bickering about dishonest reporting, he is viewing it as a “dose of reality” and reality favors the truth - and the truth is that the American people need to scrap the failed progressive movement - scrap the failed globalist mentality - we need to wake up and put America first, just like he’s been saying all along.
Go Trump! (Best election ever)
Thank you. Yours is an excellent insightful and dead on post.
The fed rate reduction is, just like the tariffs, wrong in theory, but right in practice. They are both needed as a retaliatory response to unfair foreign economic strategies.
President Trump is the most financially astute POTUS we’ve had in modern times.
Import tariffs are theoretically an awful idea, because they are effectively paid by American consumers in the form of higher prices. But if our trading partners engage in unfair practices, such as slave labor, unsafe working conditions, quality control violations, corporate theft of intellectual property, etc., in order to undercut prices, retaliatory import tariffs are the only means we have of leveling the playing field. Hopefully, China and others will eventually choose to conform to modern labor, safety and quality standards to avoid the tariffs.
Reducing the Fed rate is exactly the same. It is not good in theory, but it is the only way to incentivize foreign competitors to stop manipulating their currencies to take unfair advantage in trade. Again, hopefully, they will eventually choose to reform their central banks, when they realize President Trump will not allow the US to be taken advantage of.
The way President Trump put it the other day was that the US is paying “above market rates” on our debt (compared to our trading partners) and we need to “refinance” our debt at a fair rate. This is actually a very smart way of looking at it. If they are going to devalue their currency, we have no choice but to do it too, otherwise we are being taken to the cleaners.
Just as with the tariffs, it’s a classic case of two wrongs DO make a right.
Ideally, the world would stop all these games of human rights violations and currency manipulation and there would be no need for tariffs or central bank manipulations - let the markets sort things out.
But until then, we need to retaliate or watch as our manufacturing base continues to evaporate, and our wealth continues to be redistributed abroad.
I know - it’s the Banksters that win from all this - and that’s true. But they are global - they will profit no matter which nations win or lose. I’d rather see the banks profit from a strong US economy than profit from a weak US economy. We need to win in trade or our standard of living suffers - and let the bankers take their piece of the action - but win or lose, bankers will profit - that’s how capitalism works.
How are your bonds doing? I stopped watching 3 seconds into the open.
You must have seen quite a rise over the past week. Not taunting...I am applauding. My dividend stocks are getting some pretty decent returns. No one has cancelled dividends yet—as far as I know.
Some of the oil stocks have slashed their dividends.
My stuff is like Coke, Clorox (yes!), MacDonalds, some telecom stuff. Real middle of the road, gorilla stuff.
Not even going to ask if anybody wants to call a bottom on the stock market.
I bailed on my 401k (100% in S&500 mutual) on 3/10/20 at 2882. Moved it to a stable value fund. That was around 14% down from it’s all time high of 3340. Kinda hurt, but not so much now as it’s down around another 15% from my exit.
I’m super skittish on buying back. But at some point I will. Once this thing turns a corner I believe it will come back with a vengeance.
As nervous as my wife and I are about investing in the stock market, especially my wife, even she wondered if we shouldn't invest now in some stock funds. Seriously, if the US stock markets collapse, the whole country will collapse. Probably won't matter if we have investments in stocks, bonds, or cash at that point.
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