Comments

2

Or maybe Prez is gonna take a page from Moscow Mitch and sabotage the Economy for the next (Progressive Dem!) Prez. He seems happy enough, sabotaging most everything else.

3

We've gone full Calvinist- the wealthy are preordained with Divine success, and the poor are predestined to failure as a sign of God's judgement.

5

"Where did the cash or buyers go to all of a sudden? Jerome Powell has offered nothing in the way of an explanation."

Thank you, Mr. Mudede, for writing about something very strange that isn't getting the attention that it should. The financial media should be focused on quantitative easing being used to support the repo market. But nobody is offering anything in the way of an explanation that makes sense. Where is this money going and why? Deutsche Bank? That's what the right-wing crazies think. And that feels right but I can't prove it. Every effort to find the facts runs into a brick wall. Something important is being carefully hidden.

The food stamp issue should be discussed in a separate post.

6

@4 Stephanie Kelton and the rest of Modern monetary theory would disagree with you, MMT is the idea that you can use deficit spending to boost the economy from the bottom up, the multiplier effect is more pronounced when you give it to popes, we’ve already proven that you can’t do it from the top down. Thanks Obama.

7

Correction *poors

8

You're saying we had a massive inversion at the short end of the yield curve so the Fed papered it over to the tune of a few hundred billion, and... crickets? Jesus, journalists.

9

Interest rates have been too low for too long. It allows people too take on too much risk, which is why we have record high debt. Now banks are starting to hold their money in treasuries instead of lending it to other banks because risk keeps creeping higher. We're going to have to raise eventually, better to do it before the interest outgrows our slowing GDP.

10

raise rates*

12

@9 I agree that rates have been too low for too long. (All Presidents lobby for low rates.) But that would apply more to longer term debt. The repo market exists primarily to smooth out cash flows over a period of a few days, or even just overnight. They are fully secured and pay more than the 1.5% or so that banks get from treasuries. Because of the 2008 regulations, the banking industry has plenty of liquidity. Corporations have always needed cash to pay estimated quarterly taxes - nothing new there. Banks always want strong balance sheets at the end of the quarter (keeps the regulators at bay) - nothing new there. There is stress on the system that isn't being fully explained.

13

@12 I get that the there's a difference between the long term and short term interest rates but long rates tend to follow short rates. My understanding is that the repo market is suffering liquidity shortage because the banks who have historically been active in the repo market are becoming less so (because of the risk of a repo market rate spike). Instead, banks now prefer treasuries. Higher interest rates will make treasuries less attractive.


Please wait...

and remember to be decent to everyone
all of the time.

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