Saturday, March 21, 2020

Deja vu all over again...


Here from 10 years ago in NYT they are doing the same thing this week in earnest and have obviously capped the bond rally:

But inside the Operations Room, on the ninth floor of the New York Fed’s fortresslike headquarters, there is no time for second-guessing. Here the second round of what is known as quantitative easing — QE2, as it is called on Wall Street — is being put into practice almost daily by the central bank’s powerful New York arm. 
Each morning Mr. Frost and his team face a formidable task: they must try to buy Treasuries at the best possible price from the savviest bond traders in the business. 
The smallest miscalculation, a few one-hundredths of a percentage point here or there, could unsettle the markets and cost taxpayers dearly. 
It could also embolden critics at home and abroad who say QE2 represents a dangerous expansion of the Fed’s role in the markets. 
“We are looking to get the best price we can for the taxpayer,” said Mr. Frost, a buttoned-down 34-year-old in a striped suit and rimless glasses.



Probably the same guy there today .. only now the guy is 44 instead of 34.... who knows...

USD monopolist driving down the prices of USD bonds thus raising USD interest rates in the middle of a global viral pandemic when everybody is probably seeking credit...

How stupid are these people?????

Nothing has changed with these people... never make an adjustment... just not ever trained to do so...




8 comments:

Peter Pan said...

Surely they upgraded the operating system?
Can't get the best deal for taxpayers by running Windows Vista.

hoonose said...

How does the 'best price' affect our taxpayers?

Matt Franko said...

Well they have to pay higher interest rates on any munnie that they borrow now... thats one way..

If you have a credit line tied to the 10yr they drove the yield up there from 0.3% a few days ago to now back up to around 1% again... thanks!

I'm looking at SBA disaster rates they are still advertising 3.75% annual there which imo is not "a good deal!" for this taxpayer anyway...

should be like 1% or maybe even zero as the govt doesnt need the munnie anyway..



hoonose said...

I get the interest rate potential. But these aren't taxpayers moneys are they?

Butch Busselle said...

Matt wrote "USD monopolist driving down the prices of USD bonds thus raising USD interest rates in the middle of a global viral pandemic when everybody is probably seeking credit..."

Unemployment increasing, sales flat in most industries. Who in the hell is dumb enough to take on new debt?

Matt Franko said...

Butch its survival at this point...

If you have an existing credit line or loan and you can refinance it thru SBA at near zero over 30 years it might help your cash flow to survive longer... maybe get thru it...

Its not like you are going to go out and buy new equipment but maybe refinance some existing...

that what I am looking at/for....

But terms have to be advantageous...

Matt Franko said...

hoo,

Nothing is 'taxpayers money" that is a figure of speech...

its the typical refication error you see all the time where these people think "money" is real or something...

USD is an accounting abstraction... they think it is REAL... like you can "run out!" of them or something...

textbook cognitive deficiency 101... never had the proper training...

hoonose said...

Thanks!