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Fed helpless as US economy faces structural challenges, not monetary
- nine_zeros 1y agoOf course, what will the FED do when the fake conservative government didn't really cut spending but only put on a show for fox news?
- franktankbank 1y agoAusterity is probably not the answer. We need to redefine the economy and quick.
- nine_zeros 1y ago> Austerity is probably not the answer. We need to redefine the economy and quick. It isn't. But the dog and pony show going on is also not the right answer. Look at the president and the party - be honest - do you really think this group actually cares to fix anything in the country, with dignity and respect for humans?
- thfuran 1y agoNo, but I also don't think that dignity and respect for humans is what moves the market.
- nine_zeros 1y ago> No, but I also don't think that dignity and respect for humans is what moves the market. No but without dignity and respect for humans you get revolts - which moves the market.
- jauntywundrkind 1y agoAsking myself: are the cuts practical and soundly made, done intelligently? The answer is overwhelmingly: no, absolutely not, absolutely never. Cutting small little beautiful things that make the world better down won't have any net impact, yet picking fights with NOAA and CFPB and other good forces is the main course time after time.
- franktankbank 1y agoI want you to enumerate the dignity and respect issues as you see them. I think a general washing isn't going to be very good conversation.
- nine_zeros 1y ago> I want you to enumerate the dignity and respect issues as you see them. I think a general washing isn't going to be very good conversation. Which one do you want to talk about? - Cutting healthcare for masses while giving the super wealthy a tax cut? - Pedophilia and protection of pedophilia while blaming the "others"? - Abrupt kidnappings of people based on race when 40% of the country is not white? - Reducing trust in institutions built by Americans over the decades like CDC while gaslighting parents to not vaccinate their kids?
- lisbbb 1y agoDOGE was the hint of austerity and everyone shit themselves and freaked out about all the government layoffs and cost cutting. The same thing is happening in Argentina--the Peronists are on the rise again because nobody has the patience for any shred of a libertarian style of governance to work. Oh, and corruption, but we'll see about that. It would actually piss me off royally if Milei goes down because he couldn't resist having his own hand in the till. A lot is at stake, just the entire future of the human race and all that.
- bediger4000 1y agoIf DOGE were at all intelligent or backed by a law or anything other than Musk's weird drug addled personal preferences, I might agree. But it isn't. DOGE did things irrationally, and did things that potentially impact every citizens' personal security.
- lisbbb 1y agoBetween Musk and nothing getting done, I'll take Musk. We're in a far worse place than you think, this isn't fun and games.
- tmountain 1y agoMusk was using the government as a playground and a platform to build his personal brand. Nothing he did was “serious”. If they wanted to reduce the deficit, they’d close the carried interest loophole for hedge funds instead of running around on stage with chainsaws. That’d save around 1.3B per year which is far more than all the DOGE cuts combined. And, it wouldn’t cost a bunch of jobs.
- bediger4000 1y agoI'll take getting nothing done, if that means the tax records and social security records stay secret. I'll also take nothing getting done over an un-elected, previously-illegal effort like DOGE. You have no idea what I think of the place we're in, but as far as government policy goes, nothing changing is a great default. Make a case for the change, including a cost/benefit breakdown, then we can talk.
- ViewTrick1002 1y agoThe bond market forces austerity in the end either way. Or you can try inflation, which again leads to the bond market telling you that it didn’t help.
- franktankbank 1y agoThis is what I find so useless. There is not just a single number that can define this situation. Defining it in such a way seems to be a solid way to avoid having a real conversation.
- JumpCrisscross 1y ago> We need to redefine the economy Our legal system is a social construct. Money, a social construct. The economy? The economy is a description of a real system. You can't define away energy scarcity or the cost of distributing food.
- franktankbank 1y agoFair, maybe redefine is not the right word? Rework the incentive structure. From my point of view there is a lot of effort being expended for negative return for the average citizen. Its going to be interesting to see what happens now that China is out as long as these tariffs hold (stay in law and are actually abided). I hope the end result isn't running back and begging for mercy.
- JumpCrisscross 1y ago> China is out as long as these tariffs hold Are we actually tariffing China? I thought Trump chickened out on that.
- franktankbank 1y agoGoddamnit are you serious? You probably know better than I. I swear I heard some stupid high number on NPR yesterday.
- BrawnyBadger53 1y agoThe answer is, it depends on the good. It's not a single number, de minimis is gone though.
- JumpCrisscross 1y ago> Goddamnit are you serious? Yup [1]! It’s higher than it was before. But well below other countries’. [1] https://www.supplychaindive.com/news/us-china-tariff-pause-extension-negotiations/754175/ https://www.supplychaindive.com/news/us-china-tariff-pause-e...
- thinkingtoilet 1y agoConservative governments in the US have increased spending going back 50 years. Their base still believes them for some reason that they will lower spending.
- JumpCrisscross 1y ago> Their base still believes them for some reason that they will lower spending Their base doesn't care. I doubt it has ever cared. It, like everyone else, wants the money spent on what it wants.
- npoc 1y agoShow me the incentives (being able to charge interest on money printed out of thin air) and I'll show you the outcome.
- coliveira 1y agoConservatives vote based on conservative reasons, not on economic reasons. Their knowledge of economics is pretty limited, anyway.
- lisbbb 1y agoCongress never does its real job, which is to look out for the American people. They're always compromised.
- jgalt212 1y agoThe Fed is far from helpless. They can combat inflation by speeding up the run off of their egregiously large balance sheet and keep El Jefe happy by lowering interest rates.
- JumpCrisscross 1y ago> can combat inflation by speeding up the run off of their egregiously large balance sheet and keep El Jefe happy by lowering interest rates The Fed lowers rates by buying assets, i.e. taking bonds out of the market and putting cash into them. Lowering rates means paring or reversing the last three years' balance sheet reductions [1]. Running down the balance sheet faster would require raising rates. You can't lower rates and reduce the balance sheet unless you're doing off balance sheet fuckery. [1] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
- tossandthrow 1y ago> The Fed lowers rates by buying assets ... Ahh yeah, the planned economy that we intellectually dress as something else. Is it the real estate sector that should be prioritized this time? Maybe corperate bonds? or the government? QE is an incredibly new instrument - we are still experimenting and it is not given that it is a success.
- JumpCrisscross 1y ago> the planned economy that we intellectually dress as something else The price of a bond, mathematically, moves inversely with its yield. If you want to raise or lower the yield, i.e. rate, you have to move the price. This isn't a policy option, it's literally the definition of a rate (coupon over price). > QE is an incredibly new instrument QE means buying assets that are not Treasuries. Most of the Fed's balance sheet is Treasuries, i.e. not QE. You can't reduce the balance sheet and lower rates. You can pretend. You could sell bonds and then immediately "borrow" them back. Or start up a bunch of swap lines to banks or whatnot, so they run out and buy the bonds for you.
- hypeatei 1y ago> The market appears to be stuck in the trees, and is oblivious to the forest. In this case, the "forest" was bluntly and worryingly mapped out for us by Powell I agree that this market is irrational but everyone knows the popular saying about that. In the meantime, you can probably make some returns by assuming the money printer will keep stocks propped up for a bit longer. This isn't financial advice. This year has shown that the dollar losing value = higher stock prices. Calls it is.
- refulgentis 1y agoIf it makes you feel any better or worse, I was 100% sure of this in 2019. 100%. COVID I thought for sure was going to be the death blow.
- hypeatei 1y agoI've done quite well this year in the market mainly due to the April dip. Options trading hasn't been too bad either but that's more luck than anything.
- coliveira 1y agoIt is natural that stocks go up, since the value of the dollar is going down and there is no clear recession. Not only stocks, but precious metals are also making new highs because USD is losing its purchasing power.
- JumpCrisscross 1y ago> natural that stocks go up, since the value of the dollar is going down Equities are up more than inflation for almost any investing consumer.
- deadfoxygrandpa 1y agoyeah, because equities aren't generally included in "inflation". the guy you're responding to is trying to say that they should be
- refulgentis 1y agoIt's somewhat disturbing to see pop economics discourse recently - if I turned this in as a paper in a 200 level+ class at my middling statue university, I'd get D >= X >= C+, where X is my grade. The reason beings: - I lead with a thesis about health care jobs. - I immediately discount it as unknowable based on the data. - It's a novel idea to worry about job concentration in a particular industry in a modern capitalist economy. - Adding 20-50% taxes on imports is a hare-brained, earth-shattering, idea. I can't think of an analogue in computers, other than legislating computing is only secure moving forward if we use terenary instead of binary.
- pinkmuffinere 1y ago> I'd get D >= X >= C+, where X is my grade Mostly as a curiosity, what you've written here is impossible, lol. I think you mean your grade would range from a D to a C+, inclusive. But you have written that your grade would be greater-or-equal to a C+, yet less-than-or-equal to a D, which would be.... impressive :D edit: Closed intervals are great for communicating this kind of thing in general. You could say your grade is in the interval [D, C+], where the brackets indicate that D and C+ are included in the options. Compare to the open interval, which would indicate that D and C+ are excluded -- ie (D,C+) includes only the entries D+, C-, C.
- black_puppydog 1y agoSo you're fundamentally objecting to the statement D >= C+ then? In germany we grade from 1 (best) to 6 (worst) and I always just mapped these to A (best) to F (worst) in my mind. makes perfect sense to me. :)
- pinkmuffinere 1y agoOh that's interesting! I guess I was never explicitly told that A>B>C, it just 'feels' right haha. What you're proposing makes sense too though
- bap 1y ago
- kykat 1y agoCall me whatever but I'm not reading an article with an obvious ai image as the first thing you see.
- jmuguy 1y agoyeah its a shame really, I've tried to explain this to our CEO when he wants to use AI slop headers for our blog entries. Just spend 5 cents on a stock photo if you need to.
- boogieknite 1y agopolite of them to put that front and center so i can save myself some time
- dang 1y ago"Please don't complain about tangential annoyances—e.g. article or website formats, name collisions, or back-button breakage. They're too common to be interesting." (I agree about the annoyance, as most HN readers probably do, but the trouble with these complaints is they routinely get upvoted to the top of threads, where they choke out more interesting discussion.) https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- wcarss 1y agoTOPEKA, WA - Elderly man considering strongly worded letter to editor about armed intruder ransacking his home "optimistic" about potential for public response. "I think it could really get an important discussion started," he was heard mumbling, under the sound of a glass display case in his living room being smashed. As heavy footsteps approached his bedroom door, he continued, "people need to learn a serious lesson about public responsibility and the rule of law." At time of printing repeated calls to the house, last seen darkened, with an open and only partially hinged door, were unanswered.
- 01HNNWZ0MV43FF 1y agoArea woman unsure which part of oncoming freight train to shoot at, carefully considering moving off the tracks to Canada