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I saw the show last night and did not think it was left or right-leaning but showed the reality of our economy. I don't know if I would consider it bad, but I know it's not good. I've always known that Wall Street has some influence over the Fed. If Wall Street cries a lot the Fed takes notice. I remember the slogan don't fight the Fed and had a decade of easy money, and we (most of us here) all made money. But you would have to believe in fair tales thinking this could go on forever. Our Banks are still not strictly regulated and now we have ghost banks that are not regulated at all and present a danger to the economy. This economy has been based on greed is good.
I'm hesitant to listen to it cause that's already been my stance and don't want confirmation bias lol.
Quote:
Originally Posted by EDS_
I skimmed the piece last night.
*It's typical Frontline stuff. Well produced/scripted/narrated/slow burn pace.....well left of center/anti-business/misleading by intent etc.
*Keeping interest rates low 100% set the groundwork for business expansion, more jobs, low U3 etc. all of that is easily investigated. Alternatively, higher rates would have killed all of that.
*Until covid as a percentage of GDP corporate debt was only up a little since 2008 and much lower in The US than China, Japan, The Euro area etc. From '07-now The Federal Reserve says all business debt grew from ~$10.1T to $19.9T while GDP over the same span has almost doubled..........ergo the business debt thing is a nothing-burger in historical terms.
*I don't much like it either but every modern era successful economy on Earth has focused on the the short term, call the modern era any time after Smith. As Keynes said, ".............In the long run we are all dead............." IMO most of the focus on short term metics is explained by the fact that business cycles used to be fairly short.......peak to trough sometimes in three years, during the 1800s sometimes in months.
Yes there were upsides to the easy money, but the system was TOO easy.
We're dealing with a lot of turbulence now from the fallout of this; from the FED trying to make up time on their missed hikes. Would you say ANY of the meme stock boom or SPAC boom was healthy for the economy? The covid housing boom wasn't healthy, people scrambling around freaking out trying to lock in fed directed rates at the same time there was shortages for construction rather than more naturally purchasing when the time is right - and now we're on the freeze side. How about the metaverse? How about all this overhiring by tech firms then layoffs? All LIRPs (Low Interest Rate Phenomenons) that created enormous inefficiencies...
Just looking at metrics like U3 (which some say is too low) is how we whipsaw and contribute to short term thinking.
Business expansion then contraction so quick is a sign that there were policy problems.
I'm hesitant to listen to it cause that's already been my stance and don't want confirmation bias lol.
Yes there were upsides to the easy money, but the system was TOO easy.
We're dealing with a lot of turbulence now from the fallout of this; from the FED trying to make up time on their missed hikes. Would you say ANY of the meme stock boom or SPAC boom was healthy for the economy? The covid housing boom wasn't healthy, people scrambling around freaking out trying to lock in fed directed rates at the same time there was shortages for construction rather than more naturally purchasing when the time is right - and now we're on the freeze side. How about the metaverse? How about all this overhiring by tech firms then layoffs? All LIRPs (Low Interest Rate Phenomenons) that created enormous inefficiencies...
Just looking at metrics like U3 (which some say is too low) is how we whipsaw and contribute to short term thinking.
Business expansion then contraction so quick is a sign that there were policy problems.
Real GDP contracted more than 30% over Q2-2020. Given that there was absolutely no wiggle room for The Fed., Treasury and fiscal policy...........all spigots needed to be opened hard.
The real screw ups were Biden's continuing attempts to buy votes long after the spigots should have been turned back. History will be brutal to him, frankly it already is.........in the face of leaping inflation he begged for even more fiscal side giveaways. This isn't me making anything up this is simple history.
IOW tough/tight money in 2020 and early 2021 would have yielded catastrophe
I saw the show last night and did not think it was left or right-leaning but showed the reality of our economy. I don't know if I would consider it bad, but I know it's not good. I've always known that Wall Street has some influence over the Fed. If Wall Street cries a lot the Fed takes notice. I remember the slogan don't fight the Fed and had a decade of easy money, and we (most of us here) all made money. But you would have to believe in fair tales thinking this could go on forever. Our Banks are still not strictly regulated and now we have ghost banks that are not regulated at all and present a danger to the economy. This economy has been based on greed is good.
Literally no one who pays any attention expects business cycle upswings to last forever.
Ghost banks.....not regulated at all? What does that mean?
Let's be logical about the current banking situation and the economy. There is currently no bank in the US that could withstand a run on it if other banks did not loan them money. This is partly the result of the 2018 rollback of the Dodd-Frank by Trump. The Fed and any administration have the responsibility to insure that banking is understood to be solvent even if it is not, the price we pay for living in a capitalist society with dysfunctional and political gridlock and paralysis, greedy bankers, and wall street. This makes the Fed the only game in town to keep the economy rolling hopefully without too many missteps.
My opinion only, and living the dream.
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