3 ms·

This is all great and novel looks at improved market efficiency, but it is impossible to separate this from the Fed’s 8 trillion $ balance sheet and the continu

This is all great and novel looks at improved market efficiency, but it is impossible to separate this from the Fed’s 8 trillion $ balance sheet and the continued speed of which it buys stuff ($100bn per month) to grow that balance sheet If the Fed stops giving people $100bn/month in new dollars for their bonds and mortgage derivatives, will they still invest in new VC funds? Will the VC funds have capital to pump these startups so fast? Turn off the Fed spigot and what? Is the confidence in the private market really there? There just isn’t a history to know!

JumpCrisscross 5y ago
> will they still invest in new VC funds? Given the Fed’s announcements have prompted a rotation out of fixed income and into public equities, probably. Equities fare better in times of inflation. Private equity is still equity. Valuations may flag. > There just isn’t a history to know! Yes there is. Venture capital, as an asset class, has been through multiple crashes and tight-money regimes. (Also, nitpick: the Fed hasn’t been buying $100bn/month for some time. It’s currently in the $10 to 30bn regime and winding down.)
- vmception 5y ago
  > It’s currently in the $10 to 30bn regime and winding down. Double checking this, I think all of our numbers are off. My initial number was very outdated, your amount is just the amount of the reduction. I'm reading January was [to be] $60bn in purchases.
  - JumpCrisscross 5y ago
    > I'm reading January was [to be] $60bn in purchases January was $40bn, February is $20bn [1]. (There is a January release pointing to $30bn [2] from which I was remembering my figures.) [1] https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details https://www.newyorkfed.org/markets/domestic-market-operation... [2] https://www.newyorkfed.org/markets/opolicy/operating_policy_220126 https://www.newyorkfed.org/markets/opolicy/operating_policy_...
    - vmception 5y ago
      Thanks, right! And the taper goal is to continue reducing this month over month As well as potentially selling some of the stuff it has already bought, but more likely just holding things till maturity, or maybe a combination

JumpCrisscross 5y ago

> will they still invest in new VC funds? Given the Fed’s announcements have prompted a rotation out of fixed income and into public equities, probably. Equities fare better in times of inflation. Private equity is still equity. Valuations may flag. > There just isn’t a history to know! Yes there is. Venture capital, as an asset class, has been through multiple crashes and tight-money regimes. (Also, nitpick: the Fed hasn’t been buying $100bn/month for some time. It’s currently in the $10 to 30bn regime and winding down.)

vmception 5y ago
> It’s currently in the $10 to 30bn regime and winding down. Double checking this, I think all of our numbers are off. My initial number was very outdated, your amount is just the amount of the reduction. I'm reading January was [to be] $60bn in purchases.
- JumpCrisscross 5y ago
  > I'm reading January was [to be] $60bn in purchases January was $40bn, February is $20bn [1]. (There is a January release pointing to $30bn [2] from which I was remembering my figures.) [1] https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details https://www.newyorkfed.org/markets/domestic-market-operation... [2] https://www.newyorkfed.org/markets/opolicy/operating_policy_220126 https://www.newyorkfed.org/markets/opolicy/operating_policy_...
  - vmception 5y ago
    Thanks, right! And the taper goal is to continue reducing this month over month As well as potentially selling some of the stuff it has already bought, but more likely just holding things till maturity, or maybe a combination