Investing Strategies. What is your move?

PWMDMD said:
Honest question...you're the Fed. You don't control Congressional spending and the debt is what it is, and you have a mandate to manage price stability and maximum sustainable employment and CV-19 happens and the world shut downs for months. All economic indicators point to a massive economic downturn, recession, depression, and deflation.

What would you do?
Click to expand...

Honest answer (wait! Didn’t I say I would back out of this debate? 🙃)
Most likely what they did yet pull back faster than they do. This includes the quantitive easing.

I do realize the Fed is always trying to compensate for the irresponsibility of our spending.
 
alarmguy said:
Honest answer (wait! Didn’t I say I would back out of this debate? 🙃)
Most likely what they did yet pull back faster than they do. This includes the quantitive easing.

I do realize the Fed is always trying to compensate for the irresponsibility of our spending.
Click to expand...
I appreciate your response!
 
alarmguy said:
Congress is worse than the Fed, Its actually the Fed who is trying to clean up the mess Congress makes... such as free money.
Did anyone think pumping Trillions of dollars (actually tens of trillions now) in borrowed money to Americans would not result in inflation?
I do agree, rates should have been left at their traditional norms roughly 8% because even the Fed got involved with phony junk such as QE.
Click to expand...
My point is, in the economy, the gvt is subserviant to business. Business makes the money and pays taxes, hires people who pay taxes and spend money. All this makes the economy go or not go. Without business there is no money and no gvt.

Supply chain shocks had significant impact on inflation. It is thought that supply chain disruptions contributed on average about 60% of the run-up of U.S. inflation during the past two years.

People like or blame an entity that has little control in the big scheme of things. Plus, praise or blame depends on your particuliar bent for the most part.
 
PWMDMD said:
It was a choice between inflation for 12-24 months or recession and deflation for years which is much worse. It was the lesser of two evils.
Click to expand...

So if they knew this - and I agree they did - then why did we wait for for a year for inflation to be "transitory".

As for what to do because of the pandemic - from end of February until end of March - which included the "2 weeks to flatten the curve" the fed raised their balance sheet from $4T to $5.8T. By June 1 it was $7T. So they eased in 10 weeks by an amount that was greater than the entire annual GDP of all but 4 countries on earth. This was in additional to fiscal spending.

So they knew a lot more than we did, hence its not a fair question.

However even if we assume the early stuff was done in good faith, they could have left interest rates at zero and started shrinking their balance sheet just a few months after they started, when it would also have been obvious to anyone that could fog a mirror that money was going into crypto, stocks, and housing, not to pay unemployed people - because there were other programs for that.

Also deflation is only "much worse" to those with debt. For savers its an excellent thing. So its all perspective.
 
SC Maintenance said:
So if they knew this - and I agree they did - then why did we wait for for a year for inflation to be "transitory".

As for what to do because of the pandemic - from end of February until end of March - which included the "2 weeks to flatten the curve" the fed raised their balance sheet from $4T to $5.8T. By June 1 it was $7T. So they eased in 10 weeks by an amount that was greater than the entire annual GDP of all but 4 countries on earth. This was in additional to fiscal spending.

So they knew a lot more than we did, hence its not a fair question.

However even if we assume the early stuff was done in good faith, they could have left interest rates at zero and started shrinking their balance sheet just a few months after they started, when it would also have been obvious to anyone that could fog a mirror that money was going into crypto, stocks, and housing, not to pay unemployed people - because there were other programs for that.

Also deflation is only "much worse" to those with debt. For savers its an excellent thing. So its all perspective.
Click to expand...
I don't think anyone isn't saying they were too late to react. In retrospect, clearly, they were. As to why? I have no idea.

The total average US savings right now 1/2 of what I save yearly for retirement. Most people in our economy aren't savers.
 
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PWMDMD said:
Honest question...you're the Fed. You don't control Congressional spending and the debt is what it is, and you have a mandate to manage price stability and maximum sustainable employment and CV-19 happens and the world shut downs for months. All economic indicators point to a massive economic downturn, recession, depression, and deflation.

What would you do?
Click to expand...

Nothing!

People should have some savings and be fine for at least 6 months. If they are irresponsible and don't, they will lose their house, car, business, or whatever, and have learned a good lesson in the process. When they rebuild their life, hopefully they'll do a better job of it next time.
If it's just a young person say 18, and the bank repos their car, its not a big deal, and hopefully they just work hard, save, and next time a year later replace it with a used car they can afford to pay for cash.
Life teaches us all lessons, those lessons are good.
 
Dave Hess said:
Some California cities lifted rent moratoriums after 3 years of tenants not paying a penny of rent !!!

Very sad mom and pop landlords lost everything and courts would not evict anyone for 3 years.

OMG.

:mad:🤬🤕
Click to expand...
I find it hard to feel much sympathy to be honest. If you choose to invest where you know their socialist tendencies, then to some degree you should have known better. Not saying they deserved it, but honestly living in California is one thing - its a beautiful place. Investing in it is another. Its akin to investing in a communist country - might go well, might go poorly. Be aware of what your in for - eyes wide open.
 
CanAmAndMore said:
Nothing!

People should have some savings and be fine for at least 6 months. If they are irresponsible and don't, they will lose their house, car, business, or whatever, and have learned a good lesson in the process. When they rebuild their life, hopefully they'll do a better job of it next time.
If it's just a young person say 18, and the bank repos their car, its not a big deal, and hopefully they just work hard, save, and next time a year later replace it with a used car they can afford to pay for cash.
Life teaches us all lessons, those lessons are good.
Click to expand...
This is some of the most twisted and illogical thinking I've seen in some time. All those people who "should've" saved but did not and we allowed to fail WOULD TAKE THE REST OF THE ECONOMY DOWN WITH THEM. What happens to my business when those people can't pay me? What happens when those people can feed themselves or their families? What happens to employment when those people who can't pay me stop coming in and I can't pay my staff? What happens when your 6 months of saving are gone and we are in a 2-3 year depression?

You understand nothing about how the global economy works. The Fed's mandate is to serve this people of this country , not just the ones who have savings, which wouldn't be sufficient anyway.

Just a series of ridiculous and completely fact-less and tone-deaf comments...
 
The average American (not BITOGer) has maybe 1 month of savings before they have to raid their 401K to pay the mortgage.
 
CanAmAndMore said:
Nothing!

People should have some savings and be fine for at least 6 months. If they are irresponsible and don't, they will lose their house, car, business, or whatever, and have learned a good lesson in the process. When they rebuild their life, hopefully they'll do a better job of it next time.
If it's just a young person say 18, and the bank repos their car, its not a big deal, and hopefully they just work hard, save, and next time a year later replace it with a used car they can afford to pay for cash.
Life teaches us all lessons, those lessons are good.
Click to expand...
When we look to prevent irresponsible people from being irresponsible, we become an irresponsible nation.
I do sympathize with those who run onto hard times, but they can’t expect others to make their lives right again.
Sometimes a giant reset is called for and I kind of think we are really really really kicking the can down the road right now.

There are so many safety nets in this country and irresponsible people think someone or something will always be there to bail them out this just ferments irresponsibility.

And now, hopefully back to our regular scheduled investment thread🙃
As I think we are ready for a significant move up this year.
The markets been stagnant for so long that I wouldn’t be surprised to see 30,000. But what the heck do I know, absolutely nothing.
 
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PWMDMD said:
Honest question...you're the Fed. You don't control Congressional spending and the debt is what it is, and you have a mandate to manage price stability and maximum sustainable employment and CV-19 happens and the world shut downs for months. All economic indicators point to a massive economic downturn, recession, depression, and deflation.

What would you do?
Click to expand...


I have mentioned this before and was proposing it. The Fed should have been raising rates albeit slowly when they had the chance years ago. The fears of wrecking the economy would not have transpired had they raised 25 basis points twice or three times a year unit they got to around 2%. This would have been right before the 🦠 hit. We stayed at zero for way too long.

The Fed should be more proactive rather than reactive. Being reactive put them behind the curve.
 
PimTac said:
I have mentioned this before and was proposing it. The Fed should have been raising rates albeit slowly when they had the chance years ago. The fears of wrecking the economy would not have transpired had they raised 25 basis points twice or three times a year unit they got to around 2%. This would have been right before the 🦠 hit. We stayed at zero for way too long.

The Fed should be more proactive rather than reactive. Being reactive put them behind the curve.
Click to expand...

I agree with you 100%.

Similar to weaning an ICU patient off a ventilator. It has to be done very sloooowly.

Too fast you kill the patient.
 
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