FED to inject 1.5 Trillion

[ivinsfan]

Quote:

Originally Posted by Fermion Half a trillion is a lot? Hasn't the market lost something like 10 trillion in value over the past few weeks? I would use the army reserves and start training programs asap for some of the less demanding staffing tasks. Obviously you can't train doctors in a few months, but you can train people to check on bedpans.

It's a slippery slope pull together reserves from different areas and you might start spreading the virus rapidly. Same for groups of people pulled together for training. My DH says he spent almost his entire basic training sick as a dog. In fact he said everyone got sick and it just spread back and forth from one guy to another.

People on bedpans would most likely be better off at home and not taking up a bed.

And yes even a half trillion is a bunch of money...In NY they are using NG to provide groceries and essentials to people in the locked down quarantine area that makes sense too.

[Running_Man]

Fed in another panic move now is also going to immediately purchase 750 billion in bonds and lower the discount rate by 1 percent. There is no historical comparison for what the Federal Reserve is doing. Would seem likely QE will end up being in the 8 trillion to 10 trillion in holdings as government deficit grows to unfathomable amounts.

[Markola]

Optimistically, they are showing bold action to maintain confidence. Pessimistically, they have the most comprehensive economic data available and are rushing to get ahead of something big that they see and we don’t.

[Running_Man]

I believe they are moving in advance of a lockdown of the US. Want this announced before that comes out, which must be why it couldn't wait until Tuesday

[tulak]

What else can they do?

I wonder how this will play out. A period deflation, followed by inflation after things get back to normal?

I started looking at the BLS data to see if I could get a better idea of the labor force and how many will be affected, but that quickly became too much work and I don’t have time right now.

But I did find that the labor market in 2017 had 58.3% hourly workers. Assuming we can get through this without massive layoffs of salaried employees and half (maybe more?) of hourly workers maintain employment, we still have 70% of the labor market unaffected.

Lots of holes in this number. It’d be interesting to know how many of these are directly affected, such as hospitality/travel workers.

[Fermion]

Quote:

Originally Posted by Running_Man I believe they are moving in advance of a lockdown of the US. Want this announced before that comes out, which must be why it couldn't wait until Tuesday

What type of lockdown are you thinking? No travel other than work or emergency, or city by city quarantine?

[Running_Man]

Quote:

Originally Posted by Fermion What type of lockdown are you thinking? No travel other than work or emergency, or city by city quarantine?

Yes confined to home except work or emergency, already California is calling for self quarantine of everyone over 65. With most non-essential business closed.

[audreyh1]

Quote:

Originally Posted by Markola Optimistically, they are showing bold action to maintain confidence. Pessimistically, they have the most comprehensive economic data available and are rushing to get ahead of something big that they see and we don’t.

What baffles me is the main focus seems to be keeping the markets happy by whatever means, but the problem is a spreading epidemic. If you don’t make serious progress against the epidemic, how can you hope to calm the markets? And all these wild pre-emptive moves when the underlying public health emergency seems to be given lower priority. Cart before the horse, much? Or have they given up on the public health problem already and are just trying to lessen economic fallout? Hopefully the states and counties can step in directly and address the national public health emergency, which they are increasingly doing more forcefully, but it’s pretty ad-hoc and uncoordinated.

[Fermion]

Quote:

Originally Posted by audreyh1 What baffles me is the main focus seems to be keeping the markets happy by whatever means, but the problem is a spreading epidemic. If you don’t make serious progress against the epidemic, how can you hope to calm the markets? And all these pre-emptive wild moves when the underlying problem seems to be given lower priority. Cart before the horse, much?

I think they don't have a lot of ideas on how to make progress against the epidemic, other than close businesses and ask for social distancing. The FED is just buying toilet paper like the rest of the Americans who feel they need to do *something*

[USGrant1962]

Quote:

Originally Posted by audreyh1 What baffles me is the main focus seems to be keeping the markets happy by whatever means, but the problem is a spreading epidemic. If you don’t make serious progress against the epidemic, how can you hope to calm the markets? And all these pre-emptive wild moves when the underlying problem seems to be given lower priority. Cart before the horse, much?

Sorry audreyh1, I really respect your posts here but I'm not following you. The Fed actions have nothing to do with public health, nor should they. Fed actions only address economic issues resulting from the public health crisis.

Public health is CDC, DHS, etc. They are having press conferences EVERY DAY detailing all the actions that are being taken. The President and Vice President are participating in many of those. They took initial actions in January to begin to mitigate the spread to USA. So what do you mean by "the underlying problem seems to be given lower priority"?

[audreyh1]

Quote:

Originally Posted by USGrant1962 Sorry audreyh1, I really respect your posts here but I'm not following you. The Fed actions have nothing to do with public health, nor should they. Fed actions only address economic issues resulting from the public health crisis. Public health is CDC, DHS, etc. They are having press conferences EVERY DAY detailing all the actions that are being taken. The President and Vice President are participating in many of those. They took initial actions in January to begin to mitigate the spread to USA. So what do you mean by "the underlying problem seems to be given lower priority"?

Perhaps it’s the news sources I am following, then. The constant talk seemed to be about the markets and what should the govt do to reassure markets. I understand that the Fed can’t address public health issues.

Yes, there were actions in early Jan to avoid spread to the US, and it looked like we just had a handful of travel-related cases, but US was doing extremely little testing. Tracking and containing spread thereafter seems to have fallen apart. US Public Health officials are having press conferences every day NOW, were they two months ago?

[Tiger8693]

Quote:

Originally Posted by USGrant1962 Sorry audreyh1, I really respect your posts here but I'm not following you. The Fed actions have nothing to do with public health, nor should they. Fed actions only address economic issues resulting from the public health crisis. Public health is CDC, DHS, etc. They are having press conferences EVERY DAY detailing all the actions that are being taken. The President and Vice President are participating in many of those. They took initial actions in January to begin to mitigate the spread to USA. So what do you mean by "the underlying problem seems to be given lower priority"?

+1000

[Running_Man]

Quote:

Originally Posted by audreyh1 What baffles me is the main focus seems to be keeping the markets happy by whatever means, but the problem is a spreading epidemic. If you don’t make serious progress against the epidemic, how can you hope to calm the markets? And all these wild pre-emptive moves when the underlying public health emergency seems to be given lower priority. Cart before the horse, much? Or have they given up on the public health problem already and are just trying to lessen economic fallout? Hopefully the states and counties can step in directly and address the national public health emergency, which they are increasingly doing more forcefully, but it’s pretty ad-hoc and uncoordinated.

I totally agree with the basic premise of this post, which I will restate is that much government resources are being spent to try and correct the economic impact of government coronavirus impact, when the government isn't even sure of what it's policies are for the coming months in regards to impacting business with regulations on operations.

By making such a big splash with the finances before they could possibly know what the impacts are, the FED risks failure from unanticipated outcomes and a loss of faith in the FED.

[Dtail]

Quote:

Originally Posted by audreyh1 What baffles me is the main focus seems to be keeping the markets happy by whatever means, but the problem is a spreading epidemic. If you don’t make serious progress against the epidemic, how can you hope to calm the markets? And all these wild pre-emptive moves when the underlying public health emergency seems to be given lower priority. Cart before the horse, much? Or have they given up on the public health problem already and are just trying to lessen economic fallout? Hopefully the states and counties can step in directly and address the national public health emergency, which they are increasingly doing more forcefully, but it’s pretty ad-hoc and uncoordinated.

100% agree.
Plus the Fed was probably pushed from above to rush their cuts announcement before the markets opened, but it backfired.

[Dtail]

Quote:

Originally Posted by USGrant1962 Sorry audreyh1, I really respect your posts here but I'm not following you. The Fed actions have nothing to do with public health, nor should they. Fed actions only address economic issues resulting from the public health crisis. Public health is CDC, DHS, etc. They are having press conferences EVERY DAY detailing all the actions that are being taken. The President and Vice President are participating in many of those. They took initial actions in January to begin to mitigate the spread to USA. So what do you mean by "the underlying problem seems to be given lower priority"?

Yes they took actions on the travel ban side in January, but IMHO they have been way late in the comprehensive testing of the virus phase.

[target2019]

Quote:

Originally Posted by audreyh1 What baffles me is the main focus seems to be keeping the markets happy by whatever means, but the problem is a spreading epidemic. If you don’t make serious progress against the epidemic, how can you hope to calm the markets? And all these wild pre-emptive moves when the underlying public health emergency seems to be given lower priority. Cart before the horse, much? Or have they given up on the public health problem already and are just trying to lessen economic fallout? Hopefully the states and counties can step in directly and address the national public health emergency, which they are increasingly doing more forcefully, but it’s pretty ad-hoc and uncoordinated.

I agree with your POV. These are "wild pre-emptive moves." What these moves are accomplishing is a tying together of the the COVID-19 progress with the stock market graph. I realize the FED is hoping to get ahead of the market decline, and just do something. but their tact says "we are incredibly f'n scared, and are using these tools in all-or-nothing fashion."

I do see progress at local and state level as PA and NJ are now forcefully attacking the spread. Over time the stock market will resume some normalcy, but it won't be because of some silver bullet theory. BTW, silver is crashing. So much for protection from precious metals.

I'm bracing for another 5-10% leg down in the stock market (3-16-2020). I wish this wasn't so, but it is what we have.

[Tiger8693]

Quote:

Originally Posted by Dtail Yes they took actions on the travel ban side in January, but IMHO they have been way late in the comprehensive testing of the virus phase.

And the FED is involved in this how? They are completely different focuses. Whether they have made correct decisions or moves (for the market), I think can be questioned. But they are not responsible for Virus/Health action for the country, so their efforts for the Market are completely separate.

[audreyh1]

Quote:

Originally Posted by target2019 I do see progress at local and state level as PA and NJ are now forcefully attacking the spread. Over time the stock market will resume some normalcy, but it won't be because of some silver bullet theory. BTW, silver is crashing. So much for protection from precious metals.

Yes, I’m so glad to see local and state action. A lot of variation in schemes. Still need way more test kits and labs and ways to get medical personnel the supplies they desperately need.

I just noticed that gold had dropped big time, from 1670 last Wednesday, to 1460 today! What the heck?

We had a very late day - last 30 mins? - big rally on Friday, so this futures drop just tells me that late rally will be erased.

[Markola]

I hope the Fed is acting independently and focusing on the actual underlying economy as they are mandated to do, certainly not listening to others’ self-interested election year political haranguing, the media tsunami or directly trying to fix the panicked stock and bond markets. If they can ignore the noise and foster a condition where economic activity can continue to happen, the markets will eventually come around.

[Spock]

Quote:

Originally Posted by audreyh1 ... I just noticed that gold had dropped big time, from 1670 last Wednesday, to 1460 today! What the heck? We had a very late day - last 30 mins? - big rally on Friday, so this futures drop just tells me that late rally will be erased.

When needing to raise cash and the market is limit stopped, you sell what is sellable.


Apparently there is a wide/growing spread between paper gold and physical gold. Coin shops can't get any physical inventory. Last week the US Mint was sold out of silver eagles.