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PostPosted: April 5 19, 2:17 pm 
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this is terrifying.

Basically as his tariffs hurt, and as his tax plan shows not to be a huge bump to the economy, Trump, who is despite that still presiding over the longest expansion in our economy in history, is demanding the Fed bow to his wishes to artificially bump the economy more, propping us up for a crash later but helping his re-election cause.

Additionally terrifying are the names that are being tossed around for the Fed. Herman Cain, The Godfather's Pizza Sexual Harassment King. Stephen Moore, a guy with a bloodthirsty vendetta against interest rate hikes.

This is dangerous stuff.


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PostPosted: April 5 19, 2:59 pm 
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Mr. Trump, escalating his previous critiques of the Fed, called on Friday for policymakers to return to a policy of so-called quantitative easing: buying assets like Treasury bonds and mortgage-backed securities as a way of stimulating economic growth. The Fed gobbled up more than $4 trillion worth of bonds, increasing the supply of money in the financial system and encouraging investors to get back into the market.


Quantitative easing was only brought into existence to deal with the aftermath of the 2007-08 financial crisis. And the only reason the Fed even did it at all is because Congress refused to pass a big enough stimulus bill. I should have known it would become a regular thing to do whenever they feel like it.


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PostPosted: April 5 19, 4:45 pm 
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pioneer98 wrote:
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Mr. Trump, escalating his previous critiques of the Fed, called on Friday for policymakers to return to a policy of so-called quantitative easing: buying assets like Treasury bonds and mortgage-backed securities as a way of stimulating economic growth. The Fed gobbled up more than $4 trillion worth of bonds, increasing the supply of money in the financial system and encouraging investors to get back into the market.


Quantitative easing was only brought into existence to deal with the aftermath of the 2007-08 financial crisis. And the only reason the Fed even did it at all is because Congress refused to pass a big enough stimulus bill. I should have known it would become a regular thing to do whenever they feel like it.

As much as I respect and admire Barack Obama, you can lay this at his feet. He should have allowed Volker to clean house at the banks and rid us of those who brought us to the 2008 crisis. Instead, those people are still in charge with very few consequence. IMO, it has lead directly to the fascism we have today.


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PostPosted: April 5 19, 5:24 pm 
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33anda3rd wrote:
this is terrifying.

Basically as his tariffs hurt, and as his tax plan shows not to be a huge bump to the economy, Trump, who is despite that still presiding over the longest expansion in our economy in history, is demanding the Fed bow to his wishes to artificially bump the economy more, propping us up for a crash later but helping his re-election cause.

Additionally terrifying are the names that are being tossed around for the Fed. Herman Cain, The Godfather's Pizza Sexual Harassment King. Stephen Moore, a guy with a bloodthirsty vendetta against interest rate hikes.

This is dangerous stuff.


Even weirder, Cain loves high interest rates. This is so strange.


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PostPosted: April 6 19, 2:22 pm 
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The lasting damage here is the moves made on the judiciary and the fed. America is done. Even if the Dems do happen to get power back in two years there is no mechanism for them to recover from all this corruption we are seeing. Not to mention the Republicans have learned they can get away with anything so they will just cheat harder.


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PostPosted: April 9 19, 9:06 am 
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I didn't realize that Stephen Moore was behind the Kansas tax-cutting plan that wrecked the state economy.

That alone should be cause for disqualification. In a sane world it would go:

Senator: "Did you help draw up that lousy financial plan for Kansas that killed the state's economy?"

Moore: "Sure did."

Senator: "Ok, do we need to waste time on a formal vote or would you like to just show yourself the door?"


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PostPosted: May 2 19, 9:25 pm 
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As noted in the Trump staff thread, Trump tweeted out that Stephen Moore was withdrawing his candidacy for the Fed. It is a bit reassuring, because Moore is an untalented hack. To pull a random name from a hat, somebody like Paul Ryan probably would agree with Moore about 99% of the time on economic issues, but Ryan can make a vaguely coherent argument for policies based on something sounding like principles. Moore barely tries to disguise that his monetary policy is "raise rates when a D is POTUS, lower rates when a R is POTUS." He doesn't have any business being in a public-facing position like the Federal Reserve. Lo and behold, the R's in the Senate figured this out.

So there is a line they will not cross. I suppose it makes sense that the line involves a position where some very wealthy people on Wall Street could lose a bunch of money because Moore would be awful at his job.


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PostPosted: May 30 19, 7:03 pm 
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Judy Shelton is up for a Fed position. She won't create the same pushback that Moore and Cain did, but this is "May God have mercy on our souls" territory:



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PostPosted: May 30 19, 9:09 pm 
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I see these comments on the yield between 10-yr and 3-month Treasuries inverting, but looking at it naively myself, it seems like the primary reason is that in the 21st century, the Fed has had weak control over longer rates. The recent round of interest rates hikes haven't budged long rates nor did the hikes prior to the Great Recession. Is it known why this is?

If what's happening is Fed rate hikes end up having little to no effect on more important long rates, I don't quite see how inversion could be predictive of much.

Image


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PostPosted: June 1 19, 9:05 am 
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Arthur Dent wrote:
I see these comments on the yield between 10-yr and 3-month Treasuries inverting, but looking at it naively myself, it seems like the primary reason is that in the 21st century, the Fed has had weak control over longer rates. The recent round of interest rates hikes haven't budged long rates nor did the hikes prior to the Great Recession. Is it known why this is?

If what's happening is Fed rate hikes end up having little to no effect on more important long rates, I don't quite see how inversion could be predictive of much.

Image

The other way to look at this is that the Fed has complete control of short-term rates and the bond market has control of long-term rates. When the yield curve is inverted, the bond market is telling us that the Fed is screwing up short-term rates. And the Fed will only correct that error and lower rates when the economy is either in recession or blatantly threatening to go into a recession.

The graph shows a pattern of rates declining since the mid-1980s. From the research I've read, the current level of long-term rates actually has been pretty common over the last 250 or so years. It seems like the Fed has been slow to accept the idea that rates should be lower than 2% on the short end. Essentially rates needed decades to return to normal, and because of that delay, nobody seems to recognize this is normal. Alternatively, the post-war period (for reasons that should be obvious) was not normal.


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