Federal Reserve slashes interest rate to near zero, launches $700 billion QE program

[mk23666]

So, if banks do this and can’t make profits , should we expect the collapse of many banks ?

Well, not really. When rates get into the negatives and banks can't make profits the normal way they rely on the Fed or the Govt, I can see smaller banks merging or the Govt/Fed may step in to cover their losses through other arcane monetary/fiscal policies. Europe has several countries where negative interest rates are in effect ... even before this pandemic started. In a crisis (other than war) austerity doesn't work for the consumer and small businessmen, it only works for the investor class and big businesses looking to become larger. What the world economy needs is a massive influx in the hands of people who will immediately spend/circulate that money.

Even the act of paying one's bills on time is stimulating to the economy, let alone getting out there and buying things from stores. The Govt needs to step in sooner than later with the right steps but we don't have the right leadership in place, nor the right people in media to sound the correct alarms.

The Fed is buying back debt, with all businesses closing, which you'll soon hear, they will all be hit hard, they can't borrow from the banks who will be looking to the Fed, already down so far with QE. You'll see them buy up more even after this round of $700B.

Watch what happens.

In 72 hrs whole country will be quarantined.
All air traffic will be grounded for 2 weeks.

This is not like 2008, and we will not be in the same predicament. No doom and gloom. One of the greatest shifts of power is happening.

The longer he holds off doing that the longer it takes for the US to get a real hold of the situation. Trump/Republicans could very well end up using this pandemic to extend this Presidency because people will be afraid to come out and vote. The future hearings on this administration will be many. Hopefully their will be severe punishments or all of this will happen again just as soon as they get back in power.

 

[joneblaze]

and the stock market will still crash SMH

 

[mk23666]

and the stock market will still crash SMH

We are definitely going to see another pause in the market very quickly after it opens. All those "record gains" on Friday are going to disappear today again.

 

[mk23666]

Republicans dont care anything about capitalism. As a matter of fact, capitalism has been gone. They care about Corporatism.....

For me Capitalism is Corporatism. The only difference I could argue would be Corporatism favors the largest businesses and the investor class over the smaller businesses and smaller investors.

 

[Famous1]

For me Capitalism is Corporatism. The only difference I could argue would be Corporatism favors the largest businesses and the investor class over the smaller businesses and smaller investors.

Is capitalism even a form of government, or is it an economic system?

 

[mk23666]

I don't think companies with cash flow are going to be reinvesting it anytime soon. I believe they'll bank, sit on it until the outlook improves.

Agreed, but manipulating the markets with some (if not all) of that free money would be very tempting to them.They have little to lose and everything to gain in that short term play. Look at what happened in the market last Friday for example. Irrational buying put the market in the green again ... but watch it get thrown back down into the red again today. It's like throwing chum in the water to catch as many snapper as you can before Jaws comes along and ruins the party.

 

[mk23666]

Is capitalism even a form of government, or is it an economic system?

It's sorta both.

 

[Famous1]

It's sorta both.

Lol... Well, at least that's the myth that they perpetuate...

 

[blackpepper]

There may be a few organizations actually buying certain issues because the prices are so low, but I don't think there will be many willing to place those bets. A few hedge funds or private equity funds may. But The largest corps where so much big money is, are just to risk adverse to buy in such uncertain times. They have corporate boards and regulatory bodies to answer to, and can't just say we had a hunch. That's what caused the last crash in 08.

Agreed, but manipulating the markets with some (if not all) of that free money would be very tempting to them.They have little to lose and everything to gain in that short term play. Look at what happened in the market last Friday for example. Irrational buying put the market in the green again ... but watch it get thrown back down into the red again today. It's like throwing chum in the water to catch as many snapper as you can before Jaws comes along and ruins the party.

 

[Famous1]

Buy OPGN.....hurry..
http://thestockmarketwatch.com/stock/stock-data.aspx?stock=OPGN&a=showProfile

 

[Famous1]

And for those that don't know how to buy stock......
Download the app...
Open the app....
Create your account...
Fund your account..
Find the stock you want to buy..
Hit trade...buy the stock...
https://play.google.com/store/apps/details?id=com.robinhood.android

 

[mk23666]

I'm in the maritime industry so yeah it's spelled out on the gcaptain website. For now, I'm Dept of Def. Contract for now. I think the research vessels are fucked.

The containers may take weeks to arrive. The crew has barely 12 persons at times. The fear comes from its trips. Offloading/ on loading doesn't take much contact but refueling does.

Due to 9/11 you can't get on a container ship these days without having to sign in at the top of the gangway, or show ID, with at least one ship mate present. You also can't leave the ship without checking out with that ship mate (that is a little more lax depending on the ship/line) and they rotate that duty as the hours go on. There are times on container ships, along with ROROs and other heavy cargo ships, where you have to have direct face to face communication with the mates and/or have ship mates bring you gear to work with.

There may be new protocols about doing such things now but the port workers on the ships are still in some danger.

 

[Day_Carver]

For me Capitalism is Corporatism. The only difference I could argue would be Corporatism favors the largest businesses and the investor class over the smaller businesses and smaller investors.

They are not the same. Corporatism is worse and it's all about the richest getting richer...

 

[Mixd]

Federal Reserve Sets Commercial Paper Backstop, Adds $500 Billion in Overnight Repos; Stocks Surge

The Fed will provide a $10 billion backstop to the commercial paper market, on top of the $1 trillion in overnight liquidity it's pumped into banks over the past two days.

UPDATED: MAR 17, 2020 1:43 PM EDT

The Federal Reserve pledged to support yet another portion of domestic credit markets Tuesday with a $10 billion backstop designed to help liquidity in commercial paper trading.

The Fed said it will create a so-called special purpose vehicle, under the direction of the Treasury, to buy short-term, high-quality unsecured debts issued by companies that form an important part of the overall financing system's credit markets.

The move followed an earlier injection of $500 billion into overnight repo markets, taking its two-day overnight total to $1 trillion, as concerns over liquidity in the banking sector continue to concern investors as economic activity dries up amid the global coronavirus pandemic.

The Fed said the $1.14 trillion commercial paper markets have been under "considerable strain" in recent days as a result of "great uncertainty" from the outbreak, and Treasury Secretary Steve Mnuchin said the Fed could buy as much as $1 trillion in outstanding paper, if needed, but doubted such a sum would be required.

"Commercial paper markets directly finance a wide range of economic activity, supplying credit and funding for auto loans and mortgages as well as liquidity to meet the operational needs of a range of companies," the Fed said in a statement. "By ensuring the smooth functioning of this market, particularly in times of strain, the Federal Reserve is providing credit that will support families, businesses, and jobs across the economy."

U.S. stocks traded higher following both the Fed's CP program announcement and its second overnight repo operation, with the Dow Jones Industrial Average rising 310 points and the broader S&P 500 adding around 103 points, or 4.3%, from last night's close.

The liquidity injections also added strength to the U.S. dollar, with the dollar index, a measure of the greenback's strength against a basket of six global currencies, rising 1.6% to 99.66

Federal Reserve Sets Commercial Paper Backstop, Adds $500 Billion in Overnight Repos; Stocks Surge

The Fed will provide a $10 billion backstop to the commercial paper market, on top of the $1 trillion in overnight liquidity it's pumped into banks over the past two days.

www.thestreet.com

 

[Mixd]

The Fed will keep short-term cash injections to banks going through the week
PUBLISHED TUE, MAR 17 2020

• The New York Fed will conduct short-term bank funding operations known as repos through the rest of the week.
• The move is in response to ongoing stress in credit markets during the coronavirus crisis.

The Federal Reserve’s ongoing efforts to keep money flowing to banks through short-term exchanges will last for at least the rest of this week.

The New York Fed in an announcement Tuesday afternoon said it will now conduct daily repo operations of $500 billion through Friday, with each one running from 1:30 p.m. to 1:45 p.m.

Repos involve banks submitting high-quality collateral like Treasurys in exchange for reserves from the Fed. Banks then use the money to fund their short-term operations.

Often referred to as the plumbing that keeps the banking system operating, the repo market has been part of generally clogged financial conditions lately as the financial infrastructure suffers through the coronavirus crisis. On Tuesday alone, the New York Fed trading desk pumped nearly $200 billion into the system.

The Fed had conducted separate $500 billion operations Monday and Tuesday. Some market participants have called for the central bank to institute a standing repo facility that would allow the Fed to step into the market whenever needed, though officials have refrained from doing so thus far.

The Fed will keep short-term cash injections to banks going through the week

The Federal Reserve will now conduct daily repo operations of $500 billion through Friday, with each one running from 1:30 p.m. to 1:45 p.m.

www.cnbc.com

 

[blackpepper]

They probably have to do with keeping companies alive to preserve jobs, but other than that what do these moves mean for average americans?

Thanks in advance.

Federal Reserve Sets Commercial Paper Backstop, Adds $500 Billion in Overnight Repos; Stocks Surge

Federal Reserve Sets Commercial Paper Backstop, Adds $500 Billion in Overnight Repos; Stocks Surge

The Fed will provide a $10 billion backstop to the commercial paper market, on top of the $1 trillion in overnight liquidity it's pumped into banks over the past two days.

www.thestreet.com

The Fed will keep short-term cash injections to banks going through the week

The Fed will keep short-term cash injections to banks going through the week

The Federal Reserve will now conduct daily repo operations of $500 billion through Friday, with each one running from 1:30 p.m. to 1:45 p.m.

www.cnbc.com

 

[Mixd]

They probably have to do with keeping companies alive to preserve jobs, but other than that what do these moves mean for average americans?

Thanks in advance.

as quoted: "Commercial paper markets directly finance a wide range of economic activity, supplying credit and funding for auto loans and mortgages as well as liquidity to meet the operational needs of a range of companies," the Fed said in a statement. "By ensuring the smooth functioning of this market, particularly in times of strain, the Federal Reserve is providing credit that will support families, businesses, and jobs across the economy."

They are trying to keep things "normal" by propping up failing companies so banks can directly borrow from the Fed without the traditional methods of hoops they have to jump thru to borrow against what they don't have. The way I see it is they are buying back their debt we have had for a long time and will be left holding the bag in the end. They are at about $3-4T today, by weekend should be like $8T.

Eventually it's supposed to allow us to borrow all that as in whatever loans we need or miss payments, but I just see this as one big clusterfuck of course. They are digging themselves deeper into a hole. No one can pay all this back.

 

[blackpepper]

as quoted: "Commercial paper markets directly finance a wide range of economic activity, supplying credit and funding for auto loans and mortgages as well as liquidity to meet the operational needs of a range of companies," the Fed said in a statement. "By ensuring the smooth functioning of this market, particularly in times of strain, the Federal Reserve is providing credit that will support families, businesses, and jobs across the economy."

Eventually it's supposed to allow us to borrow all that as in whatever loans we need or miss payments, but I just see this as one big clusterfuck of course. They are digging themselves deeper into a hole. No one can pay all this back.

Of course its a clusterfuck. The "us" you mentioned above, is not us. Its them. Can we go to a bank and tell them we're laid off so we need an increase on our credit line, or another 90 days to make a car payment without repo or even penalties, an extra $2K on our debit card? Who the fuck is us??? Inquiring minds want to know. The finance companies are the only ones bolstered by these moves. They'll still take a bath, but believe they'll definitely be coming after folks to get their money. Also, their consumer credit to working people will be cut off at the knees.

 

[Mixd]

Of course its a clusterfuck. The "us" you mentioned above, is not us. Its them. Can we go to a bank and tell them we're laid off so we need an increase on our credit line, or another 90 days to make a car payment without repo or even penalties, an extra $2K on our debit card? Who the fuck is us??? Inquiring minds want to know. The finance companies are the only ones bolstered by these moves. They'll still take a bath, but believe they'll definitely be coming after folks to get their money. Also, their consumer credit to working people will be cut off at the knees.

Meaning they can make lending less lenient to us. Think of how they made 0% finance payments for 24 months at the furniture store. Or lighten the credit score needed to qualify for this or that.

Eventually, will put us in a worse predicament overall. But I feel like the debt will fall back on the Fed.

The treasury is who will be helping us more directly by giving us this possible $1k each and payroll tax cuts and so on.

 

[blackpepper]

I agree that the banks floating smaller finance companies will sell the debt to the Fed and they'll take the loss not the finance companies and banks. The thing is so many black people never fully recovered from the last crash. The good jobs never came back, our neighborhoods property values were slaughtered, and the cost of everything went up so we never got back to where we were pre-08. Now they want to screw us again with high as interest rates that will sink disadvantaged people even further. Now's when we need to demand the candidates getting our votes make a promises they can keep.

Meaning they can make lending less lenient to us. Think of how they made 0% finance payments for 24 months at the furniture store. Or lighten the credit score needed to qualify for this or that.

Eventually, will put us in a worse predicament overall. But I feel like the debt will fall back on the Fed.

The treasury is who will be helping us more directly by giving us this possible $1k each and payroll tax cuts and so on.

 

[HeathCliff]

DOW Futures down 441 right now. Wonder why it keeps tanking even thought the Fed keeps injecting sprinkles of hope.

Meaning they can make lending less lenient to us. Think of how they made 0% finance payments for 24 months at the furniture store. Or lighten the credit score needed to qualify for this or that.

Eventually, will put us in a worse predicament overall. But I feel like the debt will fall back on the Fed.

The treasury is who will be helping us more directly by giving us this possible $1k each and payroll tax cuts and so on.

I'd like to get your personal thoughts on this here?

 

[mrcmd187]

Never understood how they keep giving money to the banks and other financial institution who keep fuck it up over and over again and not to the people they fuck over with the BS products (401k's, Pension funds, saving and loans, variable mortgage rates, penny stock, retirement funds, etc.} After the mortgage melt down not a single dime from that bailout was spent on helping people keep their houses recover their pension and retirement funds.

 

[blackpepper]

Never understood how they keep giving money to the banks and other financial institution who keep fuck it up over and over again and not to the people they fuck over with the BS products (401k's, Pension funds, saving and loans, variable mortgage rates, penny stock, retirement funds, etc.} After the mortgage melt down not a single dime from that bailout was spent on helping people keep their houses recover their pension and retirement funds.

Preach !!!

 

[Mixd]

DOW Futures down 441 right now. Wonder why it keeps tanking even thought the Fed keeps injecting sprinkles of hope.



I'd like to get your personal thoughts on this here?

Bruh there is no hope. It's BS. Nothing the Fed is doing will change or turn around the dead end road.
They are buying up all this debt. Then think about this. What businesses will be in operation when everyone and their mama will be closed for at least about a good month? By beginning of next week we will all be under this stay in place type of order. Judging from school closures being issued, look at least mid April to have some businesses possibly back in operation. They are already discussing Medicaid to extend some services to all I think I read.

What 'banks to businesses' will be utilizing all this money the Fed is injecting? They will be left holding all this debt. But this won't be like 2008.
::two cents::

Markets, I think may be forced down to 15-16k before it starts to turn around if they don't stop the trading. Day by day it will go up and down. This is an engineered take down of an overly inflated market.

 

[SPECTRE1]

More banks are running scams to keep you from withdrawing, hoarding money. You call customer service after your account is frozen and they claim you are put on hold due to the virus. You don't have the funds to pay out to customers. People aren't paying mortgages and they are drawing down their accounts.

They claim they need all this documentation to verify and that a check is in the mail that you never receive.

 

[CurtDawg]

Bruh there is no hope. It's BS. Nothing the Fed is doing will change or turn around the dead end road.
They are buying up all this debt. Then think about this. What businesses will be in operation when everyone and their mama will be closed for at least about a good month? By beginning of next week we will all be under this stay in place type of order. Judging from school closures being issued, look at least mid April to have some businesses possibly back in operation. They are already discussing Medicaid to extend some services to all I think I read.

What 'banks to businesses' will be utilizing all this money the Fed is injecting? They will be left holding all this debt. But this won't be like 2008.
::two cents::

Markets, I think may be forced down to 15-16k before it starts to turn around if they don't stop the trading. Day by day it will go up and down. This is an engineered take down of an overly inflated market.

Mixd got me ready to jump off a cliff, every time I read one of his posts
Nah.....just playing.....I respect the honesty
But yeah sometimes you just have to tell it to people "straight with no chaser"
Better to be informed & better prepared.....than not ready & blindsided later on

 

[mrcmd187]

The stock market

 

[Mixd]

Mixd got me ready to jump off a cliff, every time I read one of his posts
Nah.....just playing.....I respect the honesty
But yeah sometimes you just have to tell it to people "straight with no chaser"
Better to be informed & better prepared.....than not ready & blindsided later on

I truly have no way to call it.
Most of the day watching CNBC, morning starts off, analysts saying oh this happened because of X, or Y but don't worry because today should....
End of the day they are like, idk wtf happened, never seen this before...

There's no way to judge any of this at the moment. It's still moving. It's still in a transition.

Just nothing making sense, stocks move one way, gold, oil, the yield and crypto should move another way.

Look tonight oil dropped to $26.
All the boom in South Dakota, all them mofo's ballin' living the good life, can kiss all them jobs goodbye.

Crazy times...

 

[blackpepper]

I learned a while back, that the markets are as much game theory and psychology as they are companies marketing goods and services for profits. Rational thought and logic are often of little significance with regard to price movement. Emotions such as fear and greed are really what make it do what it do.

I truly have no way to call it.
Most of the day watching CNBC, morning starts off, analysts saying oh this happened because of X, or Y but don't worry because today should....
End of the day they are like, idk wtf happened, never seen this before...

There's no way to judge any of this at the moment. It's still moving. It's still in a transition.

Just nothing making sense, stocks move one way, gold, oil, the yield and crypto should move another way.

Look tonight oil dropped to $26.
All the boom in South Dakota, all them mofo's ballin' living the good life, can kiss all them jobs goodbye.

Crazy times...

 

[HeathCliff]

Mixd got me ready to jump off a cliff, every time I read one of his posts
Nah.....just playing.....I respect the honesty
But yeah sometimes you just have to tell it to people "straight with no chaser"
Better to be informed & better prepared.....than not ready & blindsided later on

That's why I ask him for specifics and break shit down. None of that flowery shit generalizing on a macro level. Just give me the real and I'll decide how to deal with it.

Like Joe Madison say: Put it where the goats can get it

 

[playahaitian]

So can get the APR on my credit card lowered?

 

[blackpepper]

So can get the APR on my credit card lowered?

Maybe, and it wouldn't hurt to ask. Do us a favor and let us know if you catch a break.

 

[Mixd]

I learned a while back, that the markets are as much game theory and psychology as they are companies marketing goods and services for profits. Rational thought and logic are often of little significance with regard to price movement. Emotions such as fear and greed are really what make it do what it do.

Yes correct emotions do move it, it's just that's not the way everything is reacting. It's why people who really know how to gauge it are all stumped. It's heavily being manipulated at the moment.

 

[Mixd]

Perfect example of utilizing this down time to attracting more clients to the bank, parents will think like oh great idea.

Hey lookie here, FREE account for your kid, look at the shiny object.
Timing...

British challenger bank Revolut launches accounts for children
PUBLISHED TUE, MAR 17 2020 | 11:24 PM EDT

British challenger bank Revolut launches accounts for children

Revolut, one of Europe's biggest fintech (financial technology) firms, has launched a "money management" product for children.

www.cnbc.com

 

[sickwidit]

Fed rate went to zero but bank rates actually went up. This isn’t like the housing crisis where people weren’t buying and underwater at least not yet. I don’t expect to see mortgage rates going down anytime soon until the demand dies down a bit. But hoping this crisis don’t go on for that long.