Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
It was my sense the Fed would be deploying new programs this time around. This report discusses some of them (still no direct stock market purchases as far as I can tell)....
I posted the below last week, but it was likely not viewed by most. Now that we have arrived at QEE (Quantitative Easing Extreme) .....thank you for your indulgence.
I posted this back in 2011; or there about. I need some comic relief again, don't know about you. Are we all going to receive another quantitative easing? I don't know. What's left to do?
Sadly, Mr. Clarke (without eye glasses) passed in 2017. These two put so many financial events in a comic light, based in truth. NOTE: you may need to click the play arrow two times
Seems like a smart idea would have been to declare a 3 month holiday on all rents and mortgages. Takes pressure off small businesses, alleviates anxiety, and probably easier to manage than all this other stuff.
Seems like a smart idea would have been to declare a 3 month holiday on all rents and mortgages. Takes pressure off small businesses, alleviates anxiety, and probably easier to manage than all this other stuff.
You mean to defer rent or expunge it during this time?
Defer for sure; but I was thinking expunge as a way of injecting $ into the system. And, it's not like the banks don't owe the American taxpayer for 2008.
Whether or not people use the saved $ wisely is another matter, but we'd have the same issue with sending out $1000 checks.
Here is an article that discusses some of the reasons the Powell Put Act 2 announcement on Monday may turn out to have been significant....
Powell’s message is that the Fed’s support for U.S. business is unlimited, “in the amounts needed to support smooth market functioning,” as a Fed statement Monday put it. His basic rationale is simple: Nobody caused this crisis, and nobody is to blame. The government-ordered lockdown affects every company and worker, and the government should protect people until the crisis eases. Any other concern is secondary.
His reasoning is mis-guided. In this consumer-based economy, people without jobs simply cannot afford to spend and propping up the business is not all that helpful. There has to be string attach to bailout the corporations so that the $ does not go to stock buybacks and large bonus to the executives.
Case in point - Boeing does not want the government to take stakes (owning stocks) in the company as part of the bailout.
Please see the article I posted earlier on what Denmark is proposing to do.
@Sven Its my understanding the massive stimulus bill the Senate will vote on today will provide substantial cash to individual households including $1200 checks to many individuals and an additional $600 per week for 4 months in unemployment insurance coverage. And, they are already talking about a follow up stimulus program. So, the fiscal policy people are acting on that front. The Fed is demonstrating it is all in on its side and will provide massive support to the economy (for better or worse in the long run) in ways the legislative branch can not. That's the takeaway message I am getting out of all of this....
In the Senate bill the loans to small business will be forgiven if those businesses continue to pay their employees during this situation. That struck me as very good thinking, as it potentially allows the businesses to maintain relations with their employees, and simplifies getting cash into their hands without creating another new and massive government bureaucracy.
Powell is appearing on mainstream media providing reassurance the public. Here is a little detail:
Jerome Powell says the Federal Reserve would provide essentially unlimited lending to support the economy as long as it is damaged by the viral outbreak.
The economic rescue bill approved by the Senate early Thursday includes $425 billion that the Treasury could use to backstop the Fed. That would allow the Fed to boost its lending programs to an astronomical $4.25 trillion.
“Wherever ... credit is not flowing, we have the ability in these unique circumstances to temporarily step in and provide those loans and we will keep doing that, aggressively and forthrightly," Powell said.
When asked if the Fed would run out of ammunition to support the economy, Powell said no.
Here are some possible next steps by the Fed. (Its sounding more and more like the low rate world will be with us at least until the crisis passes) --
Potential Monetary Response
• Forward guidance to signal FFR will remain at 0.00% well beyond the current crisis • Purchase short-term municipal bonds (six months or less to maturity) • Request authority from Congress to purchase a broader array of corporate and/or municipal bonds • Reinstate the Term Securities Lending Facility (TSLF) • Adopt a negative fed funds rate, though we view this as unlikely
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I posted this back in 2011; or there about. I need some comic relief again, don't know about you.
Are we all going to receive another quantitative easing? I don't know. What's left to do?
Sadly, Mr. Clarke (without eye glasses) passed in 2017. These two put so many financial events in a comic light, based in truth.
NOTE: you may need to click the play arrow two times
Whether or not people use the saved $ wisely is another matter, but we'd have the same issue with sending out $1000 checks.
Case in point - Boeing does not want the government to take stakes (owning stocks) in the company as part of the bailout.
Please see the article I posted earlier on what Denmark is proposing to do.