Did the Federal Reserve cause the market correction?
- Thread starter joeea
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The fed was very smart about establishing themselves. First they didn't ask anyones opinion. Second they started off a corrupt dictatorship. That way you can't go from good to bad. Then they set it up to look like people actually vote on policy. People think if something is voted on it must be ok. Pretty smart. Oh by the way were also above anything political. Wow thats a cool trick. But hey people like the arrangement for the most part.
USGrant1962
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What does this mean? The Federal Reserve did not establish themselves. The Fed was created by the Federal Reserve Act, an act of Congress, in 1913. Acts of Congress are how the people express their opinions in a representative democracy. Who is the dictator? So the fed governors don't vote? TFH on!
MuirWannabe
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Okay. This one I know! All we are saying, is give peace a chance.
Are you stuck on Pandora? You sure seem to have music on the mind [emoji4]
Fedup
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Haha, good job. No, I’m not on any thing that fancy. What’s Pandora?
https://www.oaktreecapital.com/insights/howard-marks-memos
For a more in depth look at consequences of fed policy.
For a more in depth look at consequences of fed policy.
How about a snippet or summary and not just a link?
The site is a summary of the memos of Howard Marks. It reads in a similar fashion to Buffett letters to shareholders.
Marks is famous for his preparation and response to the last Fed crisis in 2008.
This specific memo is a summary of his take on market risk and where he sees the greatest risks today. Specifically, leverage in LBO, CLO, and M&A markets.
Marks is famous for his preparation and response to the last Fed crisis in 2008.
This specific memo is a summary of his take on market risk and where he sees the greatest risks today. Specifically, leverage in LBO, CLO, and M&A markets.
The root cause is not the Feds. The Feds are just reacting to the policy of this administration.
It's the Trade War. You increase Tariffs of $200 Billion goods by 10%-25%, then expect a higher Inflation. Prices of goods from China are going to increase by 10% - 25% when they hit the stores here. The Supply Chain of many companies depend on China .. so again, expect Inflation in the supply chain.
The Feds know when you got Tariffs going up 25%, that will push inflation. And so the Feds are forced to keep on increasing Interest Rates to no end, until we de-escalate the Tariffs going up and more Trade wars. So, who do you think is causing all this .. well, you know.
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Originally proposed by Aldrich and rejected.
Revised bill that passed was sponsored by Carter Glass of Virginia. Senator Owen also recruited to sponsor.
Gory details in "the creature from jekyll island". Many online pdf's available.
USGrant1962
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Um, the Fed decided to start raising interest rates from zero to "normal" in 2015. Historical normal fed funds rates are somewhere between 2% and 5% - we are just at the lowest end of normal now.
Tariffs are just another tax - if they are inflationary then the TCJA is 10 times more deflationary. Per the NYT, the new tariffs can be expected to cost an average family $127 to $270 per year. Per the left-leaning Tax Policy Center the average family is saving $1,600/yr from the TCJA.
Tight labor markets and supply/demand for raw materials (commodities) are what drive inflation, tariffs are trivial. The Fed is only monitoring them to see if they cause economic slowdown - which will cause them to slow rate increases, not increase them.
EDIT - oh, and GDP is about $20T, so 10% or even 25% tariff on $200B (1% of GDP) is rounding error as far as overall inflation is concerned.
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That’s all wrong. The tariffs have a multiplier effect as it hits all the US supply chain that depends on China. The NYT tax hit only talk about a family of consumers, not how it hits corporations and farm businesses. Talking about how consumers get hits by the Tariff is just one aspect... let’s talk about how that will hit the corporations and farms. .. and when China stops buying more US products , then you see a much bigger hit on GDP when Trump cannot give billions in farm subsidies anymore. The multiplier effect will hit at least $1Trillion - $2 Trillion in GDP.
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