All Forum Posts by: J Scott

Quote from @Carlos Ptriawan:

@Michael Wooldridge
@James Hamling

The QT era is finally over, https://fred.stlouisfed.org/se...
we back to QE mode silently.

If you see this chart, what's the point of having QT right, fighting inflation doesn't work. What's the point of having SVB collapse.

M2 is increasing, I guess real estate spike run would be til June this year.

This was not QE.

There was a $152 billion increase in borrowing by banks from the Fed discount window last week.  This accounts for much of the increase, and will be returned to the Fed, with interest.  

Another $142 billion was lent to the new bridge banks that the FDIC insurance fund has created. That will also be repaid with interest.

And finally, about $12 billion was borrowed to BTFP, the new Fed program to ensure liquidity at banks. Again, it will be repaid with interest.

I understand that people are looking for a reason to be outraged, but look at the actual data before you get outraged.

Quote from @Bruce Woodruff:

My apologies if I misinterpreted or mischaracterized your comment. I just went back to reread and realized that that wasn't what you were trying to imply.

Again, I'm sorry...

Quote from @Eric Bilderback:

Quote from @J Scott:

Quote from @Eric Bilderback:

If you want to get rich off the decline of your nation then you do exactly what Corporate America and Washington DC are doing to their country.  

Give me a country full of family wage career jobs, moms that can afford to stay home with their kids, that is a country worth fighting even dying for.  I don't find bringing new innovation to the world inspiring and I sure don't agree with the mindset that views society as a giant economy.

There are a lot of things about this country that I dislike (including the corporate welfare and the political corruption on both sides), but as someone with kids, I have no choice but to hope that things get better.

Look at those folks in East Palatine or kids growing up in Flint, MI that drink water with Mercury in it.  Wheres their bailout? as the US gets into wars and bailsout the richest folks in the country.  I doubt anyone in those communities cares about Americas standing what the hell does the worlds reserve currency matter to them?  In fact I would argue both those communities would probably like to see the elite (for the lack of a better word) who have been so indifferent to them go bust.

Morally the bailout of SVB was repulsive but also strategically a blunder if your objective is to give more Americans opportunity and make America strengthen our country for the future. 

Obviously many smart, good people disagree with me but for the life of me I don't see how.  

I don't disagree with you at all. A country is wealthy as ours -- especially one that wastes as much money as ours -- has no excuse for anybody going hungry, anybody not having a roof over their head, anybody not having access to good health care, anybody not having access to clean water, etc.

Capitalism and ensuring that people's basic needs are met are not antithetical to one another.  

We have a lot of things in abundance in this country today, but one thing we don't have in abundance is empathy.  😕

We can disagree on the details of the SVB bailout, but I'm guessing we agree on that.

Quote from @Eric Bilderback:

If you want to get rich off the decline of your nation then you do exactly what Corporate America and Washington DC are doing to their country.  

Give me a country full of family wage career jobs, moms that can afford to stay home with their kids, that is a country worth fighting even dying for.  I don't find bringing new innovation to the world inspiring and I sure don't agree with the mindset that views society as a giant economy.

There are a lot of things about this country that I dislike (including the corporate welfare and the political corruption on both sides), but as someone with kids, I have no choice but to hope that things get better (and do what I can to make them better, even in my own little way).

Quote from @Bruce Woodruff:

Protecting billionaire corporate business interests is not protecting 'the little guy'.

Your argument that they are thereby saving thousands of jobs may be true, but that is a slippery slope to go down. Anyone could use that to justify almost anything......

As I've written numerous times above, it's not just about protecting jobs -- it's about preserving US stature in the world by protecting an industry that allows us to maintain our standing as the world economic superpower.

You may hate the billionaires, but their very existence is the by-product of a free-market economy that is second-to-none on this planet.

Personally, I'd like to keep it that way.

But again, I recognize that this is a complex issue and that there are plenty of opinions that make complete sense.  I like to think that mine is one of them...  ;)

Quote from @Eric Bilderback:

Same thing would happen to the businesses that held their deposits at SVB that happened to all the communities, businesses, families that worked and depended on a mill when they shut down logging or the same thing that happens when companies outsource production overseas and close whatever production factory.  You go bust and your community becomes depressed.  But hey at least they couldn't tell the folks in Silicon Valley they need to learn to code.  LOL 

If mills and factories were integral to protecting our economy and securing our place as a world/economic superpower, and if they were going out of business due to external factors unrelated to their economic output, then I would agree the government should step in and protect them.

Long story short, the bar should be set very high for when the government intervenes in private industry.  In my opinion, this particular situation met that high bar.  Most situations do not.

Quote from @Michael Wooldridge:

So in other words your saying it doesn’t make sense to give up on services in our “services” economy? 
 

If you want to secure your place as the world superpower short-term, you need to control the reserve currency.

If you want to secure your place as the world superpower mid-term, you need to control innovation.

If you want to secure your place as the world superpower long-term, you need to control education.

The tech industry in the US is the second piece of that equation...

Quote from @Eric Bilderback:

I did tiptoe around the question but you answered it for the most part.  I disagree whole heartily that keeping all these venture capitalists and tech start ups solvent is looking out for the little guy.  And I wish that there was some BP brass that had the same view point as myself. 
 

What happens to the literally tens of thousands of employees if those companies go broke?

And while you may hate VCs, what happens to tech industry -- including millions of jobs, comprising over $2T in GDP, and securing the our position as a world superpower -- should they just go away?

In my opinion, you don't have to like VCs or tech entrepreneurs to want to protect the tech industry.  

Just my $.02...

Quote from @Eric Bilderback:

Quote from @J Scott:

Quote from @Costin I.:

Hey'all, you been all baited by OP with his ChatGPT generated post. Here is a rebuttal to his "deep thoughts on the collapse of SVB", also thanks to ChatGPT in 3 seconds:

Yes, I pretty much completely agree.

Here are my more detailed thoughts from today's BP Podcast:

https://www.biggerpockets.com/...

 I wanted to push on little on your appearance on the podcast.  You seem to be apologizing to extent for the Fed stepping in to "prevent panic."  Am I reading you right?  I know you're an econ guy and want to keep it there but the fact is the Fed has picked winners and losers and SF, Denver these big metros on the coast, folks like myself (to a small extent) who own assets have done well at the expense of the working class.  Do you disagree with that?

I'm not sure exactly what you're asking, but Let me try to answer the question I think you're asking...

While I appreciate the difficult job the Fed has to do and I think it's an important job (I'm not one of those "abolish the Fed" type people), I haven't been overly thrilled with their policy decisions over the last decade.

While the Fed should be impartial, with a focus on protecting the economy, they've become much too political, and way too reactionary.

All that said, I very much agree with their approach to the recent banking issues.  Despite what a lot of people want to argue, they haven't bailed out the banks. SVB is going to go out of business, all employees will lose their jobs, and shareholders will lose their investments.

What the fed and the FDIC have done -- so far -- is bailed out the regular guy. By protecting depositors, they are protecting the tens of thousands of employees of those depositors. Ensuring that the actions of the banks, which have been out of the control of the depositors, don't impact the families of all the people who just happened to be employees of those bank customers.

As far as I'm concerned, bailing out depositors is always the right move.

I'm not particularly thrilled that future fed policy will focus on keeping banks in business, but again, I think this is good for the regular guy.  If everybody we're to start moving their money to the large banks and away from regional and local banks, we'd end up with just a few big banks, which is bad for consumers.

Quote from @Costin I.:

Hey'all, you been all baited by OP with his ChatGPT generated post. Here is a rebuttal to his "deep thoughts on the collapse of SVB", also thanks to ChatGPT in 3 seconds:

Yes, I pretty much completely agree.

Here are my more detailed thoughts from today's BP Podcast:

https://www.biggerpockets.com/...