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26 sats \ 7 replies \ @grayruby 7 Aug 2024 \ on: A Fed rate cut will not solve our economic problems econ
Correct but it will be better than the alternative.
Better for Canada, maybe. I'd rather they just rip the band-aid off and let the malinvestments get worked out.
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It's a nice idea but contagion is real threat.
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Contagion implies malinvestment.
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I didn't imply there wasn't malinvestment. The whole system is built on malinvestment. Doesn't mean I like it, I just think we are well passed the point where austerity fixes it. That might have been an option in 2008. I don't think so anymore.
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Propping up malinvestment is a recipe for prolonged poverty. I doubt they'll allow it to happen, but two years from now we would be in better shape if they didn't attempt to soften the blow now.
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But if everything is malinvestment. Including people paying 32x revenue for a multi trillion dollar market cap company you aren't talking about a few bad CRE deals and bad venture investments going belly up, you are talking about the whole damn thing.
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When you have the largest government in the history of the world, you're going to have a lot of malinvestment.
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