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Lib and let die posted:Ah, worse than incompetent, then - outright evil. "Wikipedia posted:Membership is by statute limited in term, and a member that has served for a full 14-year term is not eligible for reappointment.[6] There are numerous occasions where an individual was appointed to serve the remainder of another member's uncompleted term, and has been reappointed to serve a full 14-year term.[6] Since "upon the expiration of their terms of office, members of the Board shall continue to serve until their successors are appointed and have qualified",[6] it is possible for a member to serve for significantly longer than a full term of 14 years. The law provides for the removal of a member of the Board by the President "for cause".[6]
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Mar 10, 2023 18:26
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Mooseontheloose posted:Your leftist position is that the fed should let inflation run rampant and make food unaffordable? Or that capitalists have unlimited money to fund their vanity projects from the banks. Or create the conditions for banks to buy homes because money is free? Can you quote the post where I specifically said to let inflation run wild? Eta: so far as I can tell from reading my posts, I've said I'd prefer another body than the Fed to address inflation. Would you let a roofer scrub in to take point on your heart surgery? Lib and let die fucked around with this message at 18:31 on Mar 10, 2023 |
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Mar 10, 2023 18:29
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Leon Trotsky 2012 posted:Because that is what the Fed was hypothesizing... They say that "a dramatic increase in the rate of personal savings during the COVID-19 pandemic" may have "contributed to persistently high inflation amid constrained supply." This discussion started when you asserted that the Fed is trying to push savings down in order to reduce demand for consumption. This doesn't make any sense because the Fed can't do anything about savings accumulated in the past.* All it can do is affect saving going forward, and current saving and current consumption are negatively, not positively, related. * I concede that reducing asset prices could help reduce the value of past savings. But this is not the same thing as reducing saving going forward.
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Mar 10, 2023 18:29
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Lib and let die posted:Ah, worse than incompetent, then - outright evil. That was an extreme metaphor. They aren't literally doing that. The equivalent would be setting interest rates at 40% and letting random consumer banks fail. Just saying that the concept of monetary policy being able to reduce inflation even in a supply-side shortage is possible. He can't remove Fed board members without a crime being committed (that is part of the set up for the Fed being independent from congress/politics/the president/the people who set fiscal policy. Trump famously wanted to fire his own appointment). Powell's term expires in January 2028. But, Biden is appointing a new Fed board member sometime soon because a seat just opened up. No info on who he is nominating yet.
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Mar 10, 2023 18:29
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Lib and let die posted:Can you quote the post where I specifically said to let inflation run wild? Your position is that the Fed is raising rates for the expressed purpose of killing the working class. The Fed's only tool to fight inflation is interests rates. So are you saying that directly no, it's just the only conclusion that can be drawn.
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Mar 10, 2023 18:30
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Mooseontheloose posted:Your position is that the Fed is raising rates for the expressed purpose of killing the working class. The Fed's only tool to fight inflation is interests rates. So are you saying that directly no, it's just the only conclusion that can be drawn. Lib and let die posted:Eta: so far as I can tell from reading my posts, I've said I'd prefer another body than the Fed to address inflation. Would you let a roofer scrub in to take point on your heart surgery?
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Mar 10, 2023 18:32
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Mooseontheloose posted:The Fed's only tool to fight inflation is interests rates Correct Mooseontheloose posted:Your position is that the Fed is raising rates for the expressed purpose of killing the working class...So are you saying that directly no, it's just the only conclusion that can be drawn. That is not the only conclusion that can be drawn, no. Another possible conclusion is killing the working class is an unintended byproduct of using their only tool to fight inflation.
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Mar 10, 2023 18:33
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That would be like in my previous analogy if I were accused of wanting CVS's call center to be shut down because repairing the fiber that connects the satellite site to the core isn't the job of the guy that loads an encrypted text file to a web server. Just because the person you're asking to fix something is by definition incapable of fixing something does not mean that person wants the whole system to burn. That's a ridiculous straw man.
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Mar 10, 2023 18:35
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Don't a lot of mainstream economists contend that the best tool the Fed has to combat this kind of inflationary event (i.e. non-demand driven) is "do absolutely nothing"
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Mar 10, 2023 18:38
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They are direct in that their goal is to raise unemployment and unemployment tends not to improve your ability to not die.
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Mar 10, 2023 18:39
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taxing the excess profits of corporations should also be a tool used to fight inflation.
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Mar 10, 2023 18:40
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To be fair, Moose is wrong that the only conclusion you can draw from LALD's position is that he wants runaway inflation. LALD is also wrong that the Fed are incapable of fixing inflation. They are. It is just a question of how they should do it and whether those plans are worth it. Their current assessment is that unemployment is at record lows - even with the last year of raised rates - and job growth is still strong. So, they can slow down inflation without too much economic damage and time will eventually help sort out some of the supply problems. Are they right? Nobody knows! Will it be worth it? Nobody knows! If we get a "soft landing" and it more or less works out like the Fed predicts, then it will be great. If they accidentally tip us over into recession because they push too far, then that would be pretty bad! Even the worst case scenario is not a destruction of the working class, but it is still pretty not great (~3-5 million more people temporarily unemployed and only mildly reduced inflation)! Edit: Heck Yes! Loam! posted:taxing the excess profits of corporations should also be a tool used to fight inflation. Right. The ideal situation involves both monetary policy and fiscal policy changes. Along with a concerted global effort to improve supply chains. Global cooperation that hurts some sectors of some country's economy and perfect fiscal policy domestically are very unlikely right now, so the "optimal solution" is pretty much off the table. Leon Trotsky 2012 fucked around with this message at 18:47 on Mar 10, 2023 |
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Mar 10, 2023 18:41
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gurragadon posted:Yeah, he won in about the most favorable environment for Republicans in this state in a long time. The Mccaulife campaign was comically bad as well, any "anti-Youngkin" ad I got was just comparing him to Trump, which is kind of a stupid attack, I think. I honestly couldn't tell whether it was a pro-Youngkin ad from the Republicans or an anti-Youngkin ad from Democrats until I read the address the flier was from. Republicans like Trump, even though they deny it being a good thing in the media, it's a good thing to be compared to him. Also when you base your political party on being pro woman and anti-racist, but keep Northam and Fairfax around rather than risk losing power, you’re kinda tipping your hand a bit too flagrantly. And I realize the conventional wisdom here is that anti-progressive moral panic doesn’t work, but people don’t actually like to be told that they don’t deserve a say in how their children are taught.
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Mar 10, 2023 18:47
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Leon Trotsky 2012 posted:On the hand, it is pretty bonkers that a major bank actually fully bankrupted itself. e: https://twitter.com/dweebonnaire/status/1634045640605876224 cat botherer fucked around with this message at 18:51 on Mar 10, 2023 |
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Mar 10, 2023 18:48
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plogo posted:This is how Leon is using excess savings, it is the cumulative excess savings.: https://twitter.com/jasonfurman/status/1482859807078031365?lang=en Perhaps this is a useful concept for understanding why inflation is being stubborn---richer people obviously consume more---but bringing "cumulative excess saving" (I'd rather just call it wealth) down rapidly is not at all in the Fed's interest. How do you bring saving accumulated in the past down? By getting people to dis-save in the present, which means consuming more. Edit: I also have to say, "detrending" using data from a two-year period is pretty bizarre given that we typically think about business-cycle portion of the frequency spectrum as being eight quarters or less. There's no meaningful long-run trend you can discern using such a short observation period. Oakland Martini fucked around with this message at 19:01 on Mar 10, 2023 |
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Mar 10, 2023 18:51
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https://twitter.com/GRDecter/status/1634208652595699713 There's still probably going to be some backroom deals/arm twisting to avoid most of the potential damage, but that's grim. To be fair to SVB, who could have possibly known that zero interest rates wouldn't last forever?
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Mar 10, 2023 18:58
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TheDisreputableDog posted:Also when you base your political party on being pro woman and anti-racist, but keep Northam and Fairfax around rather than risk losing power, you’re kinda tipping your hand a bit too flagrantly. Oh yeah I agree, I didn't mean to make any real definitive statements about the election. The whole thing was a complete mess from the top to bottom.
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Mar 10, 2023 19:02
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Where is the supply problem currently located? Or is that something nobody knows either?
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Mar 10, 2023 19:03
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Freakazoid_ posted:Where is the supply problem currently located? Or is that something nobody knows either? It's highly variable by product category, which is partially reflected by the inconsistent movement of commodity prices. There are still supply chain infra issues, some products are being affected by climate change, Russia sanctions are a factor in some limited set of cases...
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Mar 10, 2023 19:12
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Oakland Martini posted:Perhaps this is a useful concept for understanding why inflation is being stubborn---richer people obviously consume more---but bringing "cumulative excess saving" (I'd rather just call it wealth) down rapidly is not at all in the Fed's interest. How do you bring saving accumulated in the past down? By getting people to dis-save in the present, which means consuming more. I agree with you on this. If people are going to talk about "excess savings" in this manner they should have a coherent model as to what non-excess savings would be, not simply detrending in a way that probably doesn't make sense given the time frame. However, a lot of macro economists at the fed, wall street, or elsewhere are using "excess savings" in the manner that leon did, so i thought that would help clarify things.
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Mar 10, 2023 19:27
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Freakazoid_ posted:Where is the supply problem currently located? Or is that something nobody knows either? That's a really long and detailed answer, but the very dumbed down and short version is: - International shipping and trucking. - Key supply chain points like ports in China, the U.S., Taiwan, Mexico, etc. - Energy production and extraction. - Labor, especially certain specialized labor and entry level low wage labor. - Semi-conductors and chip manufacturing. And it is going to really depends on your specific industry and location. Ex: Mexico and Taiwan's issues really impact the car industry, but have almost no impact on the food industry.
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Mar 10, 2023 19:35
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cat botherer posted:https://twitter.com/GRDecter/status/1634208652595699713 It's funny because the same thing basically happened (is happening) to Silvergate which is also in talks with the FDIC now. Interest rates were low and then went up and their depositors needed to pull their money out (in Silvergate's case crypto people + exchanges + firms) and created a bank run while the bank's money was tied up in less liquid bonds that they were forced to sell at a loss (due to rising interest rates lowering the value of existing bonds) which lead to them being underwater.
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Mar 10, 2023 19:42
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Freakazoid_ posted:Where is the supply problem currently located? Or is that something nobody knows either? It's a bunch of different things, all happening at once. It mostly stems from two or three root causes, though there's a bunch of unrelated coincidental events as well. In no particular order, here's some of the contributors to the supply chain issues:
It's just a fuckton of stuff, but it all basically comes down to the fact that high-efficiency logistics often comes at the price of being extremely intolerant of any kind of disruption. Just-in-time logistics saves on storage costs because you're only bringing in exactly the amount of raw material you plan to use...but that means that if your next shipment is late, you don't have any extra raw materials to keep the assembly line going while you wait for the late shipment, which means the factories can't keep producing at maximum output. Similarly, ports and shipping companies kept around exactly the amount of space, vehicles, workers, and cargo containers they needed for normal day-to-day operations, extensively scheduling everything to maximally utilize those resources with as little excess or unused as possible. But if a COVID outbreak or canal blockage shook up the schedule, it became a massive loving mess. And while they were busy untangling yesterday's mess, today's cargo was piling up at the bottlenecks, resulting in backlogs that would take ages to clear because they didn't have the excess capacity to move two days worth of cargo in a single day. The supply chain issues will eventually clear up on their own even if the government doesn't do anything, assuming no further major disruptions happen. That could take another year or more, though.
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Mar 10, 2023 19:44
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plogo posted:I agree with you on this. If people are going to talk about "excess savings" in this manner they should have a coherent model as to what non-excess savings would be, not simply detrending in a way that probably doesn't make sense given the time frame. To be a bit more generous, I could see a discussion around whether we want to rapidly diminish excess saving by encouraging spending now and tolerating a transitory spike in inflation, or letting excess saving gradually come back down and dealing with more a more persistent, but perhaps smaller, increase in inflation. But that's not at all what's being discussed. What I'm seeing is assertions like "the Fed wants to reduce excess saving because that's going to reduce demand and therefore inflation," which I think is just plain wrong. Oakland Martini fucked around with this message at 19:50 on Mar 10, 2023 |
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Mar 10, 2023 19:45
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Almost all of the holdings in SVB were large deposits from startups, but one big thing from SVB collapsing is that companies that use Rippling for payroll processing are not getting their paychecks today. About 1,000 companies use Rippling and they were valued at $6.5 billion in 2021. https://twitter.com/parkerconrad/status/1634237386564730882 https://twitter.com/parkerconrad/status/1634238256937308160 https://twitter.com/parkerconrad/status/1634240849147219979
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Mar 10, 2023 20:28
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So Minnesota's governor has signed an executive order (modeled after a bill currently working its way through the state legislature) that's an extremely comprehensive set of trans rights protections.
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Mar 10, 2023 20:31
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koolkal posted:It's funny because the same thing basically happened (is happening) to Silvergate which is also in talks with the FDIC now. Interest rates were low and then went up and their depositors needed to pull their money out (in Silvergate's case crypto people + exchanges + firms) and created a bank run while the bank's money was tied up in less liquid bonds that they were forced to sell at a loss (due to rising interest rates lowering the value of existing bonds) which lead to them being underwater. Wouldn't this mean no one has really lost money, just that they can't withdraw their money right now? Assuming SVB didn't sell off all of their bonds for pennies on the dollar already, can they just give depositors their entire deposit back in the form of said bonds?
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Mar 10, 2023 20:37
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Lord Harbor posted:Wouldn't this mean no one has really lost money, just that they can't withdraw their money right now? Assuming SVB didn't sell off all of their bonds for pennies on the dollar already, can they just give depositors their entire deposit back in the form of said bonds? Theoretically, but you cant realistically do payroll in bonds. The probable outcome is temporary FDIC stabilization before it gets sold off to a large enough bank with the liquidity to take on good longterm assets at a discount
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Mar 10, 2023 20:45
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I like how we always talk about how the US can't just nationalize things but it just effectively(I know not ~technically~) nationalized a huge bank in like a day. Like we could nationalize rail if we wanted to, I doubt the entire value of the Class 1 rail companies is larger than the assets of SVB.
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Mar 10, 2023 21:07
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Lord Harbor posted:Wouldn't this mean no one has really lost money, just that they can't withdraw their money right now? Assuming SVB didn't sell off all of their bonds for pennies on the dollar already, can they just give depositors their entire deposit back in the form of said bonds? When a bank fails, the pecking order goes Depositors > Creditors > Shareholders. Unless the bank was doing something blatantly illegal like holding its assets in crypto, there should be enough assets to pay back the depositors. Shareholders will almost certainly be completely wiped out, and creditors might get pennies on the dollar. The bigger problem is the timing. Liquidation can take years, so if you're a depositor with most of your money held up in liquidation proceedings, you could go bankrupt while you wait for the receiver to give you your money. I think a lot of startups are going to get screwed by this, even though they will technically be able to get their money back. edit: I should clarify, now that SVB is in receivership, they no longer control their assets. It is up to the FDIC to decide how and when to liquidate and pay out depositors / creditors. Depositors should receive their $250k insured by the FDIC in a matter of days. It will be much longer before anyone sees their money beyond the initial $250k insured by the FDIC. Seph fucked around with this message at 21:49 on Mar 10, 2023 |
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Mar 10, 2023 21:12
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Digamma-F-Wau posted:So Minnesota's governor has signed an executive order (modeled after a bill currently working its way through the state legislature) that's an extremely comprehensive set of trans rights protections. I'm so glad we finally have a Democratic trifecta here. It's about time we got a breath of fresh air with the governor and legislature moving quickly. On top of this executive order, we also have marijuana legalization about to happen, additional abortion rights protection, driver's licenses for undocumented immigrants, and voting rights for formerly incarcerated people. The sad thing is there was a decent chance we could have had a trifecta years ago. Unfortunately, voters weren't aware enough that the state GOP recruited candidates to run for pro-weed 3rd parties to peel away votes from the [pro-weed] DFL. Kalit fucked around with this message at 21:22 on Mar 10, 2023 |
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Mar 10, 2023 21:18
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Uglycat posted:Insofar as politicians generally understand that more people "vote their pocket book" than for good policy (far fewer than a majority are even able to evaluate what policies are good and by what metrics). And most "good policy" nets a yeild on a timeline slower than the election cycle. I don’t want this to get buried because I think the analysis is correct. The question is how to push back both natively and in action. This dynamic is the same one that leads eventually to the Enragés. That is the we are hungry right now, can’t wait for trees to bear fruit in the future, burn it down. They (the gop) know they are causing that too.
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Mar 10, 2023 21:19
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Jaxyon posted:I like how we always talk about how the US can't just nationalize things but it just effectively(I know not ~technically~) nationalized a huge bank in like a day. Those are two different actions, though. SVB's assets and its holdings/liabilities are different. Their only "assets" are future interest from T-bills, but all of their holdings belong to various depositors and aren't actually assets of the company. Their liabilities far exceed their current cash. The FDIC are managing the bank because the company is technically less than worthless right now. All the "value" is from the depositors and the FDIC isn't planning on stealing all the various depositors money. The value of every rail company asset is essentially infinitely more valuable than SVB as a company right now because it is more than $0. The actual cost of nationalizing all the rail companies would be around half a trillion dollars and taking emergency management of SVB costs $0. We definitely could nationalize rail if we wanted to, but it is an entirely different scenario in terms of actions, cost, and legal requirements that restrict government "takings" of private property than those at play with SVB.
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Mar 10, 2023 21:19
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So does SVB going down mean that the NFT/AI market is gonna lose its fire hose of money?
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Mar 10, 2023 21:24
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Leon Trotsky 2012 posted:Those are two different actions, though. SVB's assets and its holdings/liabilities are different. This is not correct. You are conflating two things here - assets and solvency. Banks absolutely own their assets, they just have a bunch of offsetting liabilities from deposits. Solvency is the measure of the assets banks have in excess of their liabilities. So in SVB's case, they have billions of dollars in assets, but they are insolvent because their liabilities exceed their assets.
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Mar 10, 2023 21:28
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Bellmaker posted:So does SVB going down mean that the NFT/AI market is gonna lose its fire hose of money? Those firehoses have already been mostly shutoff. I don't know what SVB's entire customer base was, but most of their financial services were for venture capital/private equity tech investors. They weren't really in the business of directly giving money to NFT makers.
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Mar 10, 2023 21:29
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Bellmaker posted:So does SVB going down mean that the NFT/AI market is gonna lose its fire hose of money? Anything Blockchain related was already dead or wounded. This will finish it off. AI will still be propped up heavily by Microsoft, google, and a few others
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Mar 10, 2023 21:29
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Bellmaker posted:So does SVB going down mean that the NFT/AI market is gonna lose its fire hose of money? I also made this mistake, but thats Silvergate which was doorway to real banks for the crypto exchanges and they haven't come under FDIC control yet
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Mar 10, 2023 21:29
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Seph posted:This is not correct. You are conflating two things here - assets and solvency. Banks absolutely own their assets, they just have a bunch of offsetting liabilities from deposits. Solvency is the measure of the assets banks have in excess of their liabilities. Yes, I was being loose with my language, but I was referring specifically to a hypothetical nationalization scenario. If the government was nationalizing and buying out SVB, then they are not taking all of the depositors cash with no assumption of liability. They are buying out the direct assets of the company and either covering or assuming its liabilities. The actual cost and process of nationalizing SVB would be entirely different from the actual cost of nationalizing all rail in the country because the railway companies have assets that aren't directly tied to liabilities they owe to depositors and creditors.
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Mar 10, 2023 21:32
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Leon Trotsky 2012 posted:Yes, I was being loose with my language, but I was referring specifically to a hypothetical nationalization scenario. Yeah I agree with this - it doesn't make sense for the government to nationalize an insolvent bank, since it would effectively be just a government handout to the creditors (usually other banks). I guess there could be a scenario where the bank held its assets illegally in a bunch of risky classes (i.e. crypto) causing the insolvency to be severe enough to impact the depositors. In that case it might make sense, but it would probably be easier just to pay the depositors directly than nationalize the bank's assets.
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Mar 10, 2023 21:43
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