Meta Econ Takeover Day 42 \ stacker news ~meta

2819 sats \ 13 comments \ @Undisciplined 27 Nov 2023 meta

A couple of articles about the Fed today:

By Daniel Lacalle Fed Rate Cuts Will Not Save The Economy "Because borrowing from the Fed continues to reach new highs, inflation is unlikely to drop as fast as M2 would indicate, and excess money growth continues to generate problems in the economy with few improvements as it just keeps zombie financial entities alive."

By William L. Anderson The Fed Is Draining Our Economy Like Farmers Have Drained Their Aquifers "America is draining its economy by federal debt in a way similar to how American farms and cities are emptying the nation's aquifers. We cannot sustain these losses much longer."

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641 sats \ 3 replies \ @shado_op 27 Nov 2023

The Anderson article is pretty powerful in it's comparison of short termism in our crony so-called capitalism. Across not just the US, but the entire 'Western' world, long term planning, or even medium term, has gone. Drain the water. Build on flood plains. Pollute the environment. Spend money you dont have. Borrow more. Buy things you can't afford. Increase welfare. Put up taxes. Increase Services, then Cut Services. Offshore Everything, then five mins later, 'Friendshore' Everything. The fiat mindset is now firmly in control. It will takes decades to re-educate us all on how to effectively plan for the future. I increasingly feel the future is in the 'Global South' because the leaders of places like India and China think long term. Not promoting those countries, I just think the wheels of history are turning, and the West is in full 'End of Empire' mode... On a brighter note, we have Bitcoin, Nostr, Holepunch, etc. And perhaps the beginnings of a global peer to peer community/economy that cares about freedom more than nationality, religion, politics etc... It's at least worth a try!

50 sats \ 2 replies \ @Undisciplined OP 27 Nov 2023

In certain types of repeated games, cooperation can only be sustained until one player perceives the end as approaching. From that point on, the strategy switches to grabbing as much for yourself as possible.

In recent years, I've felt like the western "elites" made an analogous strategic shift and it's made me wonder if it's because they saw the end coming.

620 sats \ 1 reply \ @shado_op 28 Nov 2023

Thank you . Its a good theory, and explains a lot. The game is up so grab what you can! For example, in the UK, we've seen failed politicians somehow continue to magically earn the big bucks, despite their failure. Nick Clegg at Meta. Theresa May, complete Brexit failure, alienated everyone on all sides, (pls note I'm not raising the Brexit issue here!) in the UK and the EU, has somehow managed to bring in over £2m in "outside interests" in a few short years since resigning as PM and going back to being a backbench MP (backbenchers have no power in the UK House of Commons). How? Why? Short-term self-enrichment is the only answer?!

71 sats \ 0 replies \ @Undisciplined OP 28 Nov 2023

Scott Adams used the term "pre-bribes" to describe those payouts. It's not really Theresa May being bribed with that money. It's a signal to current politicians that as long as they play ball, they too can get a big payday once they leave office.

620 sats \ 7 replies \ @grayruby 27 Nov 2023

What's your thought on the course of action the Fed will take leading into the election? I think they will cut but how aggressively? I guess a better way of framing it is what will fed funds be at election time?

My guess is they start cutting by late Q1 or early Q2 and get fed funds down under 4% by the election.

743 sats \ 2 replies \ @kurszusz 27 Nov 2023

Yes, I agree with you! Based on expections, in May 2024 the FED will make a pivot on the interest rates. About how aggressively...I think will be extremelly aggressive...I expect a down under 2%. Btw...this period coincide with election, and the Bitcoin halving...maybe they will search a reason to cut more aggressively. My opinion is, that once the pivot will be active, a dump is more than possible... BUT... I think it will be a very short term dump, maximum 1-2 weeks...maybe a crash is not excluded...or a black swan? IDK (I have no cristal globe), but we will see ;)

620 sats \ 1 reply \ @grayruby 27 Nov 2023

Wow under 2. Aggressive.

743 sats \ 0 replies \ @kurszusz 27 Nov 2023

Yes, it is very aggressive. Check this site about interest rates expectations: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

100 sats \ 3 replies \ @Undisciplined OP 27 Nov 2023

That's what would normally happen in an establishment approved incumbent's election year. However, I've been sensing a desire to ditch Biden for a while. I think there have been several trial balloons over the course of his first term to do so and the corporate press is not nearly as sycophantic as you would expect.

That leads me to expect that the Fed will not take aggressive measures to bail out the economy. I think they're still very concerned about inflation, too.

The wrinkle that I haven't thought about enough is what role this new war in the Middle East might play.

To answer your questions more directly, I expect rates will be pretty similar come election time and the economy will be crashing severely. I'm not a macro guy though, so don't be surprised if that's not at all what happens.

630 sats \ 2 replies \ @grayruby 27 Nov 2023

Interesting. I am sure the fed will start cutting though as soon as Jamie Dimon goes on CNBC and says it is time or Bill Ackman is crying on CNBC again while putting on a 2B option bet like he did with covid.

I can't stand Ackman and the fact that he wants Dimon to be President sickens me even more. I don't want to think about how rotten and corrupt everything is. It's depressing. I am going to buy more bitcoin.

764 sats \ 0 replies \ @siggy47 27 Nov 2023

Ditto on both of them. For years I watched Squawk Box every morning. The idea of a President Dimon is the stuff of nightmares.

50 sats \ 0 replies \ @Undisciplined OP 27 Nov 2023

If we get those kinds of performances it will either mean I'm wrong about how the establishment views Biden or that they got him out of the way already.

0 sats \ 0 replies \ @linda024352 27 Nov 2023

The Federal Reserve only wants to get a piece of the pie