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Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

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Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Deutsche Gopher Fan said:
Yup. Maximum speed for therapies

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Trump demonstrating once again today that, months into the <a href="https://twitter.com/hashtag/coronavirus?src=hash&ref_src=twsrc%5Etfw">#coronavirus</a> emergency, he does not have even a grade-schooler’s understanding of viruses and vaccines— which would be fine if he was just your crazy uncle on the third floor. <a href="https://t.co/mZGsdlJ7xE">https://t.co/mZGsdlJ7xE</a></p>— Jeff Stein (@SpyTalker) <a href="https://twitter.com/SpyTalker/status/1234912093905833988?ref_src=twsrc%5Etfw">March 3, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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This is all perfectly normal. Remember, he's a businessman. And after a long still going career in business I can tell you he is running everything just like a business.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

St least we get to use mookies favorite technical mkt term

Dead cat bounce ;)
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

French Rage said:
Cutting rates doesn't magically fix our supply chain. And the issue isn't a drop in aggregate demand due to cyclical factors. That's like saying my house is on fire so I need to buy new tires for my car.

It does, however, save money for a guy with billions in debt.
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I get that it doesn't fix our supply chain, I don't disagree with that at all. All I'm saying is that we don't know if this bad or good immediately. Though, the more I think about it, the less confident I am. Normally this is to spur spending but you're right, this is caused by supply chain disruptions. Perhaps the timing would have been better after we see it bottom out and understand if we're seeing the money supply seize up or if there is a bump after the issues in the supply chain start to untangle.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Hey just FYI, we now have negative real interest rates on the 30 year treasury. So if you have any very long term public investments that might have any positive return, we should probably consider doing them. <a href="https://t.co/gpZRyZpGqu">pic.twitter.com/gpZRyZpGqu</a></p>— Neil Irwin (@Neil_Irwin) <a href="https://twitter.com/Neil_Irwin/status/1235755128034123776?ref_src=twsrc%5Etfw">March 6, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

dxmnkd316 said:
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Hey just FYI, we now have negative real interest rates on the 30 year treasury. So if you have any very long term public investments that might have any positive return, we should probably consider doing them. <a href="https://t.co/gpZRyZpGqu">pic.twitter.com/gpZRyZpGqu</a></p>— Neil Irwin (@Neil_Irwin) <a href="https://twitter.com/Neil_Irwin/status/1235755128034123776?ref_src=twsrc%5Etfw">March 6, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Can somebody explain this to me? If the ROI less inflation is negative why would anybody ever buy?
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Kepler said:
Can somebody explain this to me? If the ROI less inflation is negative why would anybody ever buy?
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A couple reasons:
- If rates go even lower, the price will go up, so you could sell it at a gain that way. Sure it seems impossible rates can go lower, but they continue to do so.
- Central banks impose negative interest rates on banks cash deposits there, so a smaller negative interest rate on a T-security might be the lesser of two evils.

Probably some others I'm missing.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

French Rage said:
A couple reasons:
- If rates go even lower, the price will go up, so you could sell it at a gain that way. Sure it seems impossible rates can go lower, but they continue to do so.
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So you're saying the absolute rate doesn't matter; all that matters is whether subsequent rates are higher or lower. All points on the number line are equally safe/risky and the place where the rate crosses zero is meaningless?

That's counter-intuitive but I guess I understand. It's like saying the absolute cost of your house doesn't matter for your eventual profit, all that matters is that value relative to your selling price.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Kepler said:
So you're saying the absolute rate doesn't matter; all that matters is whether subsequent rates are higher or lower. All points on the number line are equally safe/risky and the place where the rate crosses zero is meaningless?

That's counter-intuitive but I guess I understand. It's like saying the absolute cost of your house doesn't matter for your eventual profit, all that matters is that value relative to your selling price.
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Assuming you sell at some point along the way, before it matures. If you buy at 104 and then redeem it at 100, that's bad for you. But if you buy at 104 and someone a week later will buy for 105, yay. Things are very different if it's a bond you're grandma buys for your 10th birthday and you hold it for all 20 years, versus if you're a bond trader for a fund or such.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Kepler said:
Can somebody explain this to me? If the ROI less inflation is negative why would anybody ever buy?
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Because they’re willing to take a guaranteed small loss compared to a possible huge loss. When rates go negative, that’s really, really bad. It means there is so much fear of losing a lot of money on the markets and other investments they’re ok with a 1-year loss of a percent or so.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

French Rage said:
Assuming you sell at some point along the way, before it matures. If you buy at 104 and then redeem it at 100, that's bad for you. But if you buy at 104 and someone a week later will buy for 105, yay. Things are very different if it's a bond you're grandma buys for your 10th birthday and you hold it for all 20 years, versus if you're a bond trader for a fund or such.
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Yeah that’s very true as well.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Saudis drop the big one on Russia and Iran.

Saudi Arabia plans to boost oil output next month to well above 10 million barrels a day, as the kingdom responds aggressively to the collapse of its OPEC+ alliance with Russia.

The world’s largest oil exporter engaged in an all-out price war on Saturday by slashing pricing for its crude by the most in more than 30 years. State energy giant Saudi Aramco is offering unprecedented discounts in Asia, Europe and the U.S. to entice refiners to use Saudi crude.

At the same time, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record 12 million barrels a day, according to people familiar with the conversations, who asked not to be named to protect commercial relations. With demand ravaged by the coronavirus outbreak, opening the taps would throw the oil market into chaos.
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Saudi is exploiting the decline in demand due to the virus and the oncoming global slowdown by spiking supply to try to crater the price of oil. Countries whose economies depend on petrodollars like Russia and Iran are going to see their revenues collapse no matter what they do.

Why now? Funny you should ask.

At 10:16 a.m. on a wet and dreary Friday morning, Russia’s energy minister walked into OPEC’s headquarters in central Vienna knowing his boss was ready to turn the global oil market upside down.

Alexander Novak told his Saudi Arabian counterpart Prince Abdulaziz bin Salman that Russia was unwilling to cut oil production further. The Kremlin had decided that propping up prices as the coronavirus ravaged energy demand would be a gift to the U.S. shale industry. The frackers had added millions of barrels of oil to the global market while Russian companies kept wells idle. Now it was time to squeeze the Americans.

After five hours of polite but fruitless negotiation, in which Russia clearly laid out its strategy, the talks broke down. Oil prices fell more than 10%. It wasn’t just traders who were caught out: Ministers were so shocked, they didn’t know what to say, according to a person in the room.
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This is the sort of thing that if you do it to the US you get "liberated." God knows what Dumpy will do if the Russians decide to send a message. (Obviously the answer is: whatever Putin orders him to do.)
 
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Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Monday will be interesting. <br><br>Dow futures plummet nearly 1,200 points, Treasury yields plunge amid oil price war from <a href="https://twitter.com/CNBC?ref_src=twsrc%5Etfw">@CNBC</a> <a href="https://t.co/Yd6jqC5kcX">https://t.co/Yd6jqC5kcX</a></p>— Nick Dunn (@NickDunnCNBC) <a href="https://twitter.com/NickDunnCNBC/status/1236839380192579585?ref_src=twsrc%5Etfw">March 9, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

There goes Dimwit Donnie's prized "best stock market evah". Another round of corrections ought to erase most of the gains in the past 3 years.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

This oil thing is maybe not so good. Higher prices in oil help drive the economy. Without a motive to pump oil, just running the wells becomes a losing enterprise. All of a sudden they fall into disrepair or the supply seizes. Now we have other industries shutting down because Oil can’t afford to take it in the pants like the saudis can short term.

Glad to have $1 gas, but oil at $50-$70 actually helps industry churn.
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Oil could his $20.

But that's not the worst. All the debt racked up on oil futures comes due in 2022. Prolonged cheap oil will cause great pain in two years.

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Vladimir Putin just sparked what could end up being one of the ugliest oil price wars in modern history, and American oil and gas companies may be the victims.<a href="https://t.co/VzEBJcxz9D">https://t.co/VzEBJcxz9D</a></p>— Julia Davis (@JuliaDavisNews) <a href="https://twitter.com/JuliaDavisNews/status/1236861813909852160?ref_src=twsrc%5Etfw">March 9, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Looks like BP sold all their Alaska assets at the right time...
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Uhhhhh. They’re all below 1?

<blockquote class="twitter-tweet"><p lang="en" dir="ltr">In case anyone was wondering:<br><br>That’s not good <a href="https://t.co/5kA9C5Ab5i">https://t.co/5kA9C5Ab5i</a></p>— Angry Staffer (@AngrierWHStaff) <a href="https://twitter.com/AngrierWHStaff/status/1236874780382498817?ref_src=twsrc%5Etfw">March 9, 2020</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
Re: Business, Economic, and Tax Policy 9: No, No, No, We Compost The Rich

Imagine how pretty walk-away fracking fields will look :p
 
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