As Bank Fears Spread, Oil Craters

[Foolardi]

We are not yet in a recession. I know there are BDS sufferers who pray daily we are, and who announce regularly we are.

Interest rates had to be raised to combat inflation. It's the only way to do it.

Those banks sitting on all that resulting interest rate risk should have hedged against that risk. Those that did should be fine. Those that didn't are suffering the consequences of their foolhardiness.

If there are enough that didn't, we could see the contagion spread to even the banks that did hedge, and then we are all in big trouble.

We had 2 Consecutive Quarters of No Growth last summer heading into
Fall.That has always been the Definition of a Recession.
Or negative GDP.

 

[g5000]

We had 2 Consecutive Quarters of No Growth last summer heading into
Fall.That has always been the Definition of a Recession.

No, that is not the definition of a recession. That is a commonly believed meme, but it is false.

Besides, we had positive GDP growth all last year. You may be thinking of two years ago which had two down quarters.

Recession | U.S. Bureau of Economic Analysis (BEA)​

In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation.
www.bea.gov

In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation. The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy. The NBER recession is a monthly concept that takes account of a number of monthly indicators—such as employment, personal income, and industrial production—as well as quarterly GDP growth. Therefore, while negative GDP growth and recessions closely track each other, the consideration by the NBER of the monthly indicators, especially employment, means that the identification of a recession with two consecutive quarters of negative GDP growth does not always hold.

Hope this helps.

 

[Foolardi]

We are not yet in a recession. I know there are BDS sufferers who pray daily we are, and who announce regularly we are.

Interest rates had to be raised to combat inflation. It's the only way to do it.

Those banks sitting on all that resulting interest rate risk should have hedged against that risk. Those that did should be fine. Those that didn't are suffering the consequences of their foolhardiness.

If there are enough that didn't, we could see the contagion spread to even the banks that did hedge, and then we are all in big trouble.

Obvioulsy you never learned of correct Monetary Policy or
Milton Friedman.Paul Volcker was a a good Economist but he
tragically misinformed President Carter who bought line and sinker
that approach } to flood the zone.It resulted in massive Stagflation.

 

[Harpy Eagle]

He's the President of the United States, what he does impacts the entire world.

So, you cannot explain it.

Thanks, that is what was assumed.

 

[struth]

So, you cannot explain it.

Thanks, that is what was assumed.

what didn’t you understand?

 

[g5000]

Obvioulsy you never learned of correct Monetary Policy or
Milton Friedman.Paul Volcker was a a good Economist but he
tragically misinformed President Carter who bought line and sinker
that approach } to flood the zone.It resulted in massive Stagflation.

First, Milton Friedman is one of my idols.

Second, Paul Volcker ended stagflation. You have your history all wrong. Volcker wasn't even Fed chair when stagflation began. And Carter wasn't president when stagflation began.

 

[westwall]

I wonder if they will drop as low as Trump's COVID caused them to drop?

You meant fau chi and the DNCCCP's COVID.

Didn't you.

DURRRRRR

 

[westwall]

what didn’t you understand?

He understands, he's just a DNCCCP paid troll.

 

[jknowgood]

Gas prices did not drop overnight. Oil prices probably did.

And the highest oil prices ever were was on Bush's watch.

Nope the highest peak was in 2012.

 

[Foolardi]

No, that is not the definition of a recession. That is a commonly believed meme, but it is false.

Besides, we had positive GDP growth all last year. You may be thinking of two years ago which had two down quarters.

Recession | U.S. Bureau of Economic Analysis (BEA)​

In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation.
www.bea.gov

In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation. The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy. The NBER recession is a monthly concept that takes account of a number of monthly indicators—such as employment, personal income, and industrial production—as well as quarterly GDP growth. Therefore, while negative GDP growth and recessions closely track each other, the consideration by the NBER of the monthly indicators, especially employment, means that the identification of a recession with two consecutive quarters of negative GDP growth does not always hold.

Hope this helps.

I meant the summer of 2021.
Read the best book on the Fed and how it should behave
or react to tinkering with the Prime
The book is - Maestro - { Greenspan's Fed and the American Boom } 2000
by Bob Woodward

 

[g5000]

Nope the highest peak was in 2012.

Nope. Wrong. They peaked in 2008.

Let me guess. Someone said "Obama" and you jumped all over it without bothering to even see if that was true. You took it sheerly on faith.

How is it possible you did not know oil prices peaked in 2008 unless you are a hack?

See for yourself: Cushing, OK WTI Spot Price FOB (Dollars per Barrel)

Crude Oil - Price - Chart - Historical Data - News

Crude Oil increased 9.50 USD/BBL or 13.26% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Crude Oil - values, historical data, forecasts and news - updated on June of 2024.

tradingeconomics.com

 

[jknowgood]

Nope. Wrong. They peaked in 2008.

Let me guess. Someone said "Obama" and you jumped all over it without bothering to even see if that was true. You took it sheerly on faith.

How is it possible you did not know they peaked in 2008 unless you are a hack?

See for yourself: Cushing, OK WTI Spot Price FOB (Dollars per Barrel)

Crude Oil - Price - Chart - Historical Data - News

Crude Oil increased 9.50 USD/BBL or 13.26% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Crude Oil - values, historical data, forecasts and news - updated on June of 2024.

tradingeconomics.com

No I looked it up, and it said gas peaked in 2012. At $3.62.

 

[Foolardi]

First, Milton Friedman is one of my idols.

Second, Paul Volcker ended stagflation. You have your history all wrong. Volcker wasn't even Fed chair when stagflation began. And Carter wasn't president when stagflation began.

I never wrote that the big Lug { Volcker } was Fed Chairman
when he ADVISED Carter on how to keep the economy running.
Jimmy Carter did what Volcker advised him.And then Carter
got around to Making him the Fed Chair.Volcker Raised Fed funds
from 11 % to 20 % as a sort of medicine for rising Inflation
{ 13 % }. While Unemployment kept rising.From 6 % when Volcker
was appointed in august of ' 79 to over 10 % { 10.8 % } in ' 82.

 

[g5000]

No I looked it up, and it said gas peaked in 2012. At $3.62.

We're talking about oil prices. Go back and look!

 

[g5000]

Gas prices did not drop overnight. Oil prices probably did.

And the highest oil prices ever were was on Bush's watch.

Nope the highest peak was in 2012.

Wrong. 2008. On Bush's watch.

 

[Nostra]

Aren't you going to congratulate Biden for engineering the banking collapse to drop oil prices?

I’m sure there is an ORANGE MAN BAD in this somewhere.

 

[Nostra]

The fear centers around interest rate risk. Banks loaded up on Trump and Obama's debt paper, and now all that paper is underwater.

Nothing to do with Biden.

Your knee-jerk BDS is making you look like a fool.

Funny how nothing that happens on Biden’s watch has anything to do with Biden.

 

[g5000]

I never wrote that the big Lug { Volcker } was Fed Chairman
when he ADVISED Carter on how to keep the economy running.
Jimmy Carter did what Volcker advised him.And then Carter
got around to Making him the Fed Chair.Volcker Raised Fed funds
from 11 % to 20 % as a sort of medicine for rising Inflation
{ 13 % }. While Unemployment kept rising.From 6 % when Volcker
was appointed in august of ' 79 to over 10 % { 10.8 % } in ' 82.

Stagflation began during the Nixon Administration. Before Carter, not during Carter as you claimed. Ask anyone who was an adult during Ford and they will tell you about his silly WIN buttons.

And like I said, Volker ENDED stagflation, not caused it as you claimed.

As every economist knows and will tell you, when you raise interest rates to fight inflation, unemployment usually rises.

During periods of high inflation, unemployment is usually low. This is why we don't want our politicians to have their hands on the money printing presses, because they will print us into hyperinflation to keep unemployment low.

Reagan was put under tremendous pressure to get Volcker to lower interest rates as we went into a recession from his efforts. But Reagan held firm, and inflation came down. Then the economy boomed bigly.

That is precisely what we are looking at now. With the Fed raising interest rates to lower inflation, there is a very good chance it will push us temporarily into a recession.

Everyone is hoping for a "soft landing" without a recession, and so far we have been lucky.

 

[Nostra]

Enjoy your higher interest returns on your saving account.

Still about half the Bidenflation rate, Simp.

YIPPEE!

 

[jknowgood]

Wrong. 2008. On Bush's watch.

Yes oil, but gas Obama holds the record for gas.