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We can only guess, and mine is that they left themselves no choice. They blew it. They were left at the station while inflation rolled away. I've been wondering all along if it would be smarter to do fewer, sharper increases. 100bps, 125bps. Who knows. And dang it, THEY DIDN'T ASK ME.Yeah, exactly.
This very thought has had me wondering how long it takes to feel the full effect of an increase in the rate. Maybe the Fed is acting too hastily to make up for being asleep at the switch.
Yep. Demand exploded, global supply chains immediately buckled, and here we are.That is precisely what is driving inflation. Consumer demand spiked to its highest level in history after the pandemic. All that stimulus money was burning a hole in their pockets.
What do you make of the spike of borrowing at the discount window?We can only guess, and mine is that they left themselves no choice. They blew it. They were left at the station while inflation rolled away. I've been wondering all along if it would be smarter to do fewer, sharper increases. 100bps, 125bps. Who knows. And dang it, THEY DIDN'T ASK ME.
I'd like to know if that's confined by industry or if it's all over. If it's spread out, that could be a troubling omen. Not sure what it would mean if it were confined. To be honest, I hadn't seen the story.What do you make of the spike of borrowing at the discount window?
My spidey senses tell me someone is taking advantage of the cheap money while the cheating is good.
Either that, or things are REALLY bad.
There is no mandate precedent of 2%Actually it is in the Fed dual mandate to lower or raise interest rates to keep inflation at 2 percent.
The second part of their mandate is to maximize employment.
You are consistently wrong, man.
I started a topic about it a few days ago: The Federal Reserve Is Bailing Out The Banks AgainI'd like to know if that's confined by industry or if it's all over. If it's spread out, that could be a troubling omen. Not sure what it would mean if it were confined. To be honest, I hadn't seen the story.
We know you view people who have money to spend as very badThat is precisely what is driving inflation. Consumer demand spiked to its highest level in history after the pandemic. All that stimulus money was burning a hole in their pockets.
Jesus. I'm admittedly not as tuned in right now -- I sold in October, and I'm in the process of transitioning out (1 year consulting agreement).I started a topic about it a few days ago: The Federal Reserve Is Bailing Out The Banks Again
The new program is called the Bank Term Funding Program (BTFP).
The name implies it is just for the banking industry.
Here is the Fed's press release about it: Federal Reserve Board announces it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors
They are accepting shit bonds at par value as collateral.
Imagine you had a token which was worth $50, but today it is worth $25. If you go around begging for a loan, ordinary lenders will only accept your collateral as being worth $25.
And then magically, wonderfully, incredibly the Fed says they will value your piece of shit at $50.
That's what is going on at the discount window.
That spike tells me something really, really bad is going on.
We deal with what is rather than the what if of imaginationImagine you had a token which was worth $50, but today it is worth $25. If you go around begging for a loan, ordinary lenders will only accept your collateral as being worth $25.
And then magically, wonderfully, incredibly the Fed says they will value your piece of shit at $50.
That's what is going on at the discount window.
That spike tells me something really, really bad is going on.
Not only can you not keep zero percent rates forever. but it was obvious with inflation two years ago rates would rise very soon. Inflation only has one cure, higher interest rates. It is clearly the bigger threat to the average citizen than some bank closures. Banks just scream louder and to the right people more than we do.That happens when rates rise. Can't keep zero rates forever.
Banking Crisis? um.. Biden said everything is OK.. Right?Federal Reserve raises benchmark rate by 0.25 point despite bank turmoil
God knows how many more billions of dollars of bonds just sank beneath the waves.
The Fed was looking at 50 basis points, but I guess the banking crisis gave them some second thoughts.
There is a tipping point where bank failures could cascade us into another depression.Not only can you not keep zero percent rates forever. but it was obvious with inflation two years ago rates would rise very soon. Inflation only has one cure, higher interest rates. It is clearly the bigger threat to the average citizen than some bank closures. Banks just scream louder and to the right people more than we do.
He said the SVB depositors would get their money back.Banking Crisis? um.. Biden said everything is OK.. Right?
Quick question: How many banks have failed since 2007?There is a tipping point where bank failures could cascade us into another depression.
See post 6.
