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Government buys $1T of securities

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Old 03-18-2009, 06:30 PM   #1
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Government buys $1T of securities

Wow

Fed to buy up to $300B long-term Treasury bonds: Financial News - Yahoo! Finance
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Old 03-18-2009, 06:43 PM   #2
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Re: Government buys $1T of securities

Quantitative Easing.



All credit goes to 70Chip.
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Old 03-18-2009, 11:42 PM   #3
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Re: Government buys $1T of securities

I assume you think this is a logical decision Saden. I give up. It's not like it matters really, not to mention that it's illegal. That doesn't matter either. If you can't pick where you're going to go you might as well enjoy the ride.

Seriously, I work for a bank and we lend all day long. We have so many good loans that our underwritting department is backed up for about a month. We're understaffed and no one is in any danger of losing their jobs. I had to turn down a million dollar loan today for a condo in New York City. It wasn't good enough.

It isn't our fault that too many backs thought that SISA 3/1 ARM IO Non-owner vacation property with piggy backs were good loans to make to any Tom, Dick, and Harry that came off the street.

But hey, life is short and this is only business. So f it. I'm waiting for this guy to start running the Fed or Treasury.

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Old 03-19-2009, 12:22 AM   #4
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Re: Government buys $1T of securities

My favorite scene is this one. Sellers as the Adlai Stevensonesque Merkin Muffly:



So perfect. "Listen...If it wasn't friendly ...you probably wouldn't have even got it."
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Old 03-19-2009, 01:15 AM   #5
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Re: Government buys $1T of securities

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Originally Posted by Trample the Elderly View Post
I assume you think this is a logical decision Saden. I give up. It's not like it matters really, not to mention that it's illegal. That doesn't matter either. If you can't pick where you're going to go you might as well enjoy the ride.

Seriously, I work for a bank and we lend all day long. We have so many good loans that our underwritting department is backed up for about a month. We're understaffed and no one is in any danger of losing their jobs. I had to turn down a million dollar loan today for a condo in New York City. It wasn't good enough.

It isn't our fault that too many backs thought that SISA 3/1 ARM IO Non-owner vacation property with piggy backs were good loans to make to any Tom, Dick, and Harry that came off the street.

But hey, life is short and this is only business. So f it. I'm waiting for this guy to start running the Fed or Treasury.

You know what really bothers me? The fact that you work for a bank and you don't appreciate the scope of the problem. You cite working at a bank as a virtue but in the context of your views it really isn't.

  1. Quantitative easing is a well know monetary tool. In your world it's always bad, in my world it can be good or bad depending on situation and how it is used.
  2. You fail to appreciate the catch-22 situation we're in. All of this is not being done in jest, it's so we don't lose more jobs and business. In my world no easing means inability to lend money, inability to lend money results in more business tightening thier belts, more belt tightening means more layoffs, higher unemployment means higher default.
  3. Can your bank handle 20% of its customers losing their jobs? For how long? Tell you what, we can even do the math but if I had to guess it wouldn't without a bailout. In my world I realize that it's not just about giving good loans, it's how employed we are.
  4. The only reason why your bank is in business is because it's backed by the Full Faith and Credit of the United States Government. Period. In my world I am cognizant that your bank didn't pay any FDIC insurance premium between 1996-2006 and was therefore sucking on taxpayer tit.
  5. My world doesn't consist of living in a cave pretending government inaction will yield positive results. I will defer to economists who don't think statistics are useless.
  6. Finally, my world is not based on superficial knowledge of what America is and has always been, and how and why it got to where it is today.
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Last edited by saden1; 03-19-2009 at 11:38 AM.
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Old 03-19-2009, 02:47 AM   #6
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Re: Government buys $1T of securities

Bernanke seems convinced he knows what he's doing. I hope so because he's printing money like a 3rd world dictator on crystal meth. There are possible downsides. Inflation, hyper-inflation, stagnation, stagflation, deflation, lack of job creation, depreciation, investment cessation, stock-market gyrations, an influx of Haitians, trouble at the United Nations, exploitation, signing bonus pro-rations, rotting foundations, strange combinations, unholy federations, bad vibrations, widespread starvation, 70Chip's sedation, spiraling taxation, increasing privation, a 4 man rotation, increasing lactation fascination, bankrupt corporations, sexual frustrations at the lack of penetrations or poor lubrications, god damnation, artificial insemination, cardio-pulmonary resuscitation, and institutionalization.
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Old 03-19-2009, 04:34 AM   #7
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Re: Government buys $1T of securities

Our current problem is a liquidity trap and deflation. I very much doubt a ~15 trillion GDP economy with ~2.7 trillion in receipts and ~100% debt to GDP ratio will suffer inflation as easily as some would have you believe. Sure, it's possible but there would have be serious negligence and gross miscalculation for that to happen (i.e. we print a multiplier of our national debt).

p.s. What monetary tool do you think the government uses to combat inflation? If you guessed tighten money supply you would be correct.
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Old 03-19-2009, 10:04 AM   #8
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Re: Government buys $1T of securities

Quote:
Originally Posted by 70Chip View Post
Bernanke seems convinced he knows what he's doing. I hope so because he's printing money like a 3rd world dictator on crystal meth. There are possible downsides. Inflation, hyper-inflation, stagnation, stagflation, deflation, lack of job creation, depreciation, investment cessation, stock-market gyrations, an influx of Haitians, trouble at the United Nations, exploitation, signing bonus pro-rations, rotting foundations, strange combinations, unholy federations, bad vibrations, widespread starvation, 70Chip's sedation, spiraling taxation, increasing privation, a 4 man rotation, increasing lactation fascination, bankrupt corporations, sexual frustrations at the lack of penetrations or poor lubrications, god damnation, artificial insemination, cardio-pulmonary resuscitation, and institutionalization.
I happen to be supportive of a 4-man rotation.
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Old 03-19-2009, 11:09 AM   #9
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Re: Government buys $1T of securities

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Originally Posted by saden1 View Post
You know what really bothers me? The fact that you work for a bank and you don't appreciate the scope of the problem. You cite working at a bank as a virtue but in the context of your views it really isn't.

  1. Quantitative easing is a well know monetary tool. In your world it's always bad, in my world it can be good or bad depending on situation and how it is used.
  2. You fail to appreciate the catch-22 situation we're in. All of this is not being done in jest, it's so we don't lose more jobs and business. In my world no easy means inability to lend money, inability to lend money results in more business tightening thier belts, more belt tightening means more layoffs, higher unemployment means higher default.
  3. Can your bank handle 20% of its customers losing their jobs? For how long? Tell you what, we can even do the math but if I had to guess it wouldn't without a bailout. In my world I realize that it's not just about giving good loans, it's how employed we are.
  4. The only reason why your bank is in business is because it's backed by the Full Faith and Credit of the United States Government. Period. In my world I am cognizant that your bank didn't pay any FDIC insurance premium between 1996-2006 and was therefore sucking on taxpayer tit.
  5. My world doesn't consist of living in a cave pretending government inaction will yield positive results. I will defer to economists who don't think statistics are useless.
  6. Finally, my world is not based on superficial knowledge of what America is and has always been, and how and why it got to where it is today.
The reason my bank is in business is because they did not go out and loan money to everyone who asked for a loan. Thats called ggod business and if the goverment stayed out of the loan process from the get go we not be in this mess like we are now. Its a fact that some people should just rent because they either do not pay their bills or they cannot afford the cost of a home. In just the past two weeks I called my bank and got two loans because I have good credit and pay my bills.
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Old 03-19-2009, 11:18 AM   #10
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Re: Government buys $1T of securities

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Originally Posted by saden1 View Post
Our current problem is a liquidity trap and deflation. I very much doubt a ~15 trillion GDP economy with ~2.7 trillion in receipts and ~100% debt to GDP ratio will suffer inflation as easily as some would have you believe. Sure, it's possible but there would have be serious negligence and gross miscalculation for that to happen (i.e. we print a multiplier of our national debt).

p.s. What monetary tool do you think the government uses to combat inflation? If you guessed tighten money supply you would be correct.
"serious negligence and gross miscalculation " How about bailout money and AIG

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Old 03-19-2009, 11:28 AM   #11
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Re: Government buys $1T of securities

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Originally Posted by firstdown View Post
The reason my bank is in business is because they did not go out and loan money to everyone who asked for a loan. Thats called ggod business and if the goverment stayed out of the loan process from the get go we not be in this mess like we are now. Its a fact that some people should just rent because they either do not pay their bills or they cannot afford the cost of a home. In just the past two weeks I called my bank and got two loans because I have good credit and pay my bills.
Good business is worthless in the face of high unemployment. Look around, good companies are hurting even though they've made sound decisions. In a depression many who have good credit and pay their bills will end-up with bad credit and unable to pay their bills.
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Last edited by saden1; 03-19-2009 at 11:40 AM.
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Old 03-19-2009, 11:36 AM   #12
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Re: Government buys $1T of securities

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"serious negligence and gross miscalculation " How about bailout money and AIG

Economists disappointed with Obama, Geithner - BloggingStocks

In your world any bailout is serious negligence and gross miscalculation so I am not entirely sure you're in a position to do any serious analysis. AIG got bailed out for cause and if I was a betting man I would bet your insurance business uses their service up the chain.
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Old 03-19-2009, 11:59 AM   #13
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Re: Government buys $1T of securities

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In your world any bailout is serious negligence and gross miscalculation so I am not entirely sure you're in a position to do any serious analysis. AIG got bailed out for cause and if I was a betting man I would bet your insurance business uses their service up the chain.
I don't have a problem with goverment bailouts but blindly giving them money is a hugh problem. I bet if you asked Obama or congress to tell us what was done with just a 1/10 of the money they could not answer the question any better then saying it went to AIG, Chevy, Ford etc... How the money is getting used and how it will be paid back is my concern. Not sure about your last statement.
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Old 03-19-2009, 12:05 PM   #14
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Re: Government buys $1T of securities

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Good business is worthless in the face of high unemployment. Look around, good companies are hurting even though they've made sound decisions. In a depression many who have good credit and pay their bills will end-up with bad credit and unable to pay their bills.
Good companies might be hurting in these time but they are not failing like poorly managed ones. Take building contractors. Most of them spend money left and right when times are good then go out of business when the housing market slows down. Its like they think people will keep buying, buying and buying with never a slow down and when it does they are not prepared. I know one contractor that is going bankrupt for his 3rd time and another contractor who is actually looking to hire. The difference is that one knows how to deal with a changing market and the other lives for the moment. Its called planning ahead and any good business man should know how important that is when running a business.
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Old 03-20-2009, 03:26 AM   #15
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Re: Government buys $1T of securities

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Originally Posted by firstdown View Post
I don't have a problem with goverment bailouts but blindly giving them money is a hugh problem. I bet if you asked Obama or congress to tell us what was done with just a 1/10 of the money they could not answer the question any better then saying it went to AIG, Chevy, Ford etc... How the money is getting used and how it will be paid back is my concern. Not sure about your last statement.
Just like the AIG bonuses. Congress could have put it in the bill that they weren't allowed to give bonuses, but they purposely left that out of there, and now they are acting like they knew nothing about it. They are acting like they are innocent bystanders while the people on wall street are evil for honoring their contracts. The government is going to save us from something they let happen in the first place.
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