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nec209

US government injecting billions into the market

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What is this the news I hear they are saying repo or injecting billion dollars into the market?

Is the stock market not doing well and the government is injecting billions into the market every day to keep the stock market up.

Where is this money going and is profiting from it.

Is is stock market not doing well now and could crash and that why feds are popping money into every day.

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You’re gonna need to share a link, or at least convey your thoughts more precisely.

Do you mean quantitative easing from the past administration? 

Do you mean bailouts to US farmers to cushion them from tariffs and trade war?

Do you mean election spending?

Which market are you referencing?

What are you talking about?

Edited by iNow

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https://www.nytimes.com/2019/10/11/business/economy/federal-reserve-treasury-bills.html

Not an area I have much understanding of, but I don't think it is directly related to the stock market. They insist it is not quantitative easing (aka "printing money") but is just intended to restore balance to the money market.

How independent is the Fed? Could it be an attempt to make the economy look strong so the president can boast about it? (I'm sure I never used to be this cynical, even about politicians.)

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The sugar rush from the tax cuts is wearing off and the markets are dropping into hypoglycemia. This is in prep for that. It’s like we know we’re about to fall down the stairs so they’re putting a bunch of pillows there to cushion the fall. Fed is largely independent, but is run by humans who are subject to influence. More broadly, every economist has known the tax cut spike was temporary and market would correct this year, but the GOP will blame the Democrats for crashing the market if they win the election.

 

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29 minutes ago, iNow said:

The sugar rush from the tax cuts is wearing off and the markets are dropping into hypoglycemia. This is in prep for that. It’s like we know we’re about to fall down the stairs so they’re putting a bunch of pillows there to cushion the fall. Fed is largely independent, but is run by humans who are subject to influence. More broadly, every economist has known the tax cut spike was temporary and market would correct this year, but the GOP will blame the Democrats for crashing the market if they win the election.

 

100%. Now explain all the Democrats promises based on increased taxing while maintaining the growth...

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16 minutes ago, J.C.MacSwell said:

100%. Now explain all the Democrats promises based on increased taxing while maintaining the growth...

why do we need to maintain the growth?

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24 minutes ago, J.C.MacSwell said:

100%. Now explain all the Democrats promises based on increased taxing while maintaining the growth...

Lower overall per household expenditures on healthcare leads to more money to put back into the economy. Fewer sick people leads to increased productivity. Better schools lead to higher economic growth and decreased poverty, thus higher income taxes and fewer social safety net expenditures. More entrepreneurs can start business when they no longer need to worry about unexpected medical needs which leads to increased job creation...

I could keep going, but the point is your question is easy to answer. You make a mistake by framing it as cost as opposed to investments with clear returns. 

Edited by iNow

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15 minutes ago, dimreepr said:

why do we need to maintain the growth?

Because investors want it. That's what brings money in.

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That's why the wealthy want it, not why we need it.

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13 hours ago, nec209 said:

What is this the news I hear they are saying repo or injecting billion dollars into the market?

Is the stock market not doing well and the government is injecting billions into the market every day to keep the stock market up.

Recently, China's stocks dropped 8% due to coronavirus fears.

https://edition.cnn.com/2020/02/02/investing/china-markets-coronavirus/index.html

China government decided to inject 174 billion USD to stop panic and disallow short-selling and blocked large shareholders to sell their assets for at least six months.

https://www.reuters.com/article/us-china-health-cenbank/china-to-inject-174-billion-of-liquidity-on-monday-as-markets-reopen-idUSKBN1ZW074

As a result entire week e.g. Shanghai stock exchange was going up.

Coronavirus fears will also affect US and EU tourism, airlines and the oil industry.

Edited by Sensei

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4 minutes ago, dimreepr said:

That's why the wealthy want it, not why we need it.

It's not a sustainable model but that's the way it is.

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That's my point, it's not the only model.

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43 minutes ago, iNow said:

Lower overall per household expenditures on healthcare leads to more money to put back into the economy. Fewer sick people leads to increased productivity. Better schools lead to higher economic growth and decreased poverty, thus higher income taxes and fewer social safety net expenditures. More entrepreneurs can start business when they no longer need to worry about unexpected medical needs which leads to increased job creation...

 

That's essentially handwaving a few factors that if done well can have positive effects, and you are counting on government to do it well, without the room for the increased deficit spending. (despite the current increases in GDP, Trump has increased deficit spending even faster)

49 minutes ago, iNow said:

 

I could keep going, but the point is your question is easy to answer. 

It really isn't. You certainly haven't.

56 minutes ago, iNow said:

You make a mistake by framing it as cost as opposed to investments with clear returns. 

The costs are somewhat clear. The returns are far from it. 

You make the mistake of assuming good intentions and wishful thinking.

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5 minutes ago, J.C.MacSwell said:

You make the mistake of assuming good intentions and wishful thinking.

The tax cuts provided a de facto spending stimulus. It’s that spending stimulus that has helped the economy. Why are you arguing that stimuli from means other than a tax cut for the rich and major corporations couldn’t achieve the same positive outcome, especially a stimulus applied to 90%+ of the populace?

I’d like to better understand what you’re arguing because right it doesn’t appear to hold up to even remedial scrutiny. Let’s be sure I’m not misrepresenting your actual position by you first clarifying it. 

Edited by iNow

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5 minutes ago, iNow said:

The tax cuts provided a de facto spending stimulus. It’s that spending stimulus that has helped the economy. Why are you arguing that stimuli from means other than a tax cut for the rich couldn’t achieve the same positive outcome, especially one applied to 90%+ of the populace?

If like to better understand what you’re arguing because right it doesn’t appear to hold up to scrutiny. Let’s be sure I’m not misrepresenting your actual position. 

Tax cuts and deregulations are now factored in, as is greater and greater public deficits (and debt), even compared to the increased GDP. There is a limit to this, not saying the debt needs to be repaid but it does need to be serviced. 

Where do you get the means for your "investments" and why are you so certain they will pay off?

Wealth tax? Doing a better job of them by centralized government guidance?

All on top of paying off past expenses (student debt relief etc.) before taking on more?

All on top of increasing minimum wage to $15/hr? (read as eliminating all jobs that cannot sustain $15/hr or having government create millions of 

extra jobs to pay for)

"Trump's economy" is unsustainable, and will be even more so next year. Whoever takes over will not have any "easy answers".

 

 

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I’m unclear what you’re saying. You appear to be equating the US economy with a household budget. This is a common, but facile mistake. Either way, unsure text is going to get us there. This is a big conversation better had in person over beer and whiskey. 

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GDP is like working out your speed by looking at your fuel gauge.

11 minutes ago, iNow said:

This is a big conversation better had in person over beer and whiskey. 

I’m game. 😍

Edited by dimreepr

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46 minutes ago, iNow said:

I’m unclear what you’re saying. You appear to be equating the US economy with a household budget. This is a common, but facile mistake. Either way, unsure text is going to get us there. This is a big conversation better had in person over beer and whiskey. 

I'm saying whoever gets in power next year will be put in a much harder place with regards to the economy than what Trump inherited in 2016.

Would you dispute that?

59 minutes ago, iNow said:

You appear to be equating the US economy with a household budget. This is a common, but facile mistake. 

I understand the difference. I don't think you understand the limits to that difference.

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1 hour ago, J.C.MacSwell said:

That's essentially handwaving a few factors that if done well can have positive effects, and you are counting on government to do it well,...

It worked.

It worked under Bill Clinton, and it was just starting to work under Obama- which is how Trump managed to capitalise on the results of  policies he didn't enact.

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Just now, John Cuthber said:

It worked.

It worked under Bill Clinton, and it was just starting to work under Obama- 

Nether Clinton, nor Obama, had made promises on the scale of the current Democrat positions on spending.

7 minutes ago, John Cuthber said:

which is how Trump managed to capitalise on the results of  policies he didn't enact.

...and why the same advantage won't be in place next January

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spending is like working out your speed by looking at your gear stick. 

We can all be wrong, even you.

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1 hour ago, J.C.MacSwell said:

whoever gets in power next year will be put in a much harder place with regards to the economy than what Trump inherited in 2016.

Would you dispute that?

By some measures, yes. By other measures, no. The “economy” is big and multifaceted.

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19 hours ago, iNow said:

You’re gonna need to share a link, or at least convey your thoughts more precisely.

Do you mean quantitative easing from the past administration? 

Do you mean bailouts to US farmers to cushion them from tariffs and trade war?

Do you mean election spending?

Which market are you referencing?

What are you talking about?

The feds injecting billions into the market or banks and have been doing this the the past two to three months.

That all the news outlet was saying and also used the word repo.

So I don’t know where the money is going and who is getting rich of this thing.

I did not know the stock market or banks are not doing well and could crash with out this money coming from the feds.

well I did not know the problem was that bad.

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7 minutes ago, nec209 said:

I did not know the stock market or banks are not doing well and could crash with out this money coming from the feds.

well I did not know the problem was that bad.

They wouldn't. And it isn't.

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4 hours ago, nec209 said:

The feds injecting billions into the market or banks and have been doing this the the past two to three months.

That all the news outlet was saying and also used the word repo.

So I don’t know where the money is going and who is getting rich of this thing.

I did not know the stock market or banks are not doing well and could crash with out this money coming from the feds.

well I did not know the problem was that bad.

They are talking about this:

https://en.m.wikipedia.org/wiki/Repurchase_agreement

 

This article talks about current events:

https://www.bankrate.com/banking/federal-reserve/why-the-fed-pumps-billions-into-repo-market/

Its hard to follow honestly but basically things are fine.

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