All Forum Posts by: Michael Wooldridge

Quote from @Bruce Woodruff:

@James Hamling My man, that was so well said. I especially took note of the following comments:

"The Fed VERY CLEARLY said from the start exactly what they were going to do with rates. They said what there target was, that they would keep fighting inflation via rate hikes until they hit that goal"

"I will give a F about SVB AFTER every small business lost during moratorium get's a bail-out for the exact $ there business was worth the day before moratoriums"

Well said but weren’t you calling for housing market values resetting 7-8 month ago? his whole post argues against the idea of housing values dropping. 
 

Quote from @James Hamling:

Yes, there is a serious affordability issue, and banking does not give a rip. The system does not give a rip. The elite do not give a rip. There will be talkie-talk-talk and NOTHING WILL CHANGE, just like always happens. 

The U.S. exists in financial servitude to a Plutocratic system. That is reality. 

It’s worth noting that essentially this was the basis of all discussion in that previous housing prices thread. That the markets wouldn’t crash because of inventory and the only way homes would “technically” lose value was due to inflation. 

But it’s also what could make this month’s rate increase infuriating. If Powell would sit tight for a few months we might get out of this without a major reset. Rates are high enough to create the pressure needed - and housing will hit the new norm come May.

Quote from @Bruce Woodruff:

Quote from @Michael Wooldridge:

How can you cheat a system if there isn't one?

Which is hwy I said it’s something we disagree on. The system is this country and what makes it and all of us successful. Simple as that.  

Quote from @Bruce Woodruff:

Quote from @Michael Wooldridge:

I take advantage of capitalism all the time but this is one area I absolutely disagree with you on. Uncheck capitalism is just bad especially if there is no penalty for crashing a sector or economy if you walk away with a few hundred million for taking the delayed risks. Also separately at some point capital gains need to be a progressive tax over a certain number. 

I certainly agree that illegal gains should be punished, but Govt overreach is already severely out of control.

Oh, and there should be no capital gains tax at all.

 Huge difference between illegal gains and people at a level of power and influence that have, in my opinion, a fiduciary responsibility to the country. Sorry but you don’t get to gamble with the economy that provides the power for those big banks. Anybody who has ever sit in a board room with a large company knows too many only care about the 2-4 years not the long term. Well sorry but in re you go broke if you do that. In big business you can walk away with massive bonuses and no punishment. That is what has to stop. 

As to cap gains so many reasons I have an issue with that. Not the least of which is it would be so easy to cheat the system. 

Meanwhile Credit Suisse to be bought 08 style. https://www.reuters.com/busine...

Quote from @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.

 It effectively acts as QE. Mortgage rates dropped this week…

I won’t speak for Carlos but I don’t believe he is outraged. It was just something we said was likely to happen about summer/fall this year in another thread

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.

Can’t say I’m surpriseded. 

I saw Fed - St Louis article the other day that inflation prediction for march is 4.2%. They’ve been conservative in their estimates so far -so I’m not totally surprised.

Also - all here know  - in May we will hit the country peak on home prices. So to me it feels like inflation will be not completely under control but manageable by that point anyway since housing has been 40% of inflation. 

And they were never going to hurt jobs without crashing economy. Too many boomers retiring. That said it probably made sense to get rates back up in this range anyway. When they drop rates and have mortgages at 4.5 to 5.75% everybody wil be super happy and the Fed has room to reduce prime if needed in future.

Quote from @Bruce Woodruff:

Quote from @Michael Wooldridge:

I’ll be the first person to say unchecked capitalism (in fact there was a big thread months ago where I said this) is killing this country.

Unchecked capitalism is not the problem. Government intervention is. And the last thing our society needs is more taxes to disincentivise everyone...

I take advantage of capitalism all the time but this is one area I absolutely disagree with you on. Uncheck capitalism is just bad especially if there is no penalty for crashing a sector or economy if you walk away with a few hundred million for taking the delayed risks. Also separately at some point capital gains need to be a progressive tax over a certain number. 

And generation by generation buying power has dropped. Either way it works out well for me - maybe better since my generation has been weaker in a lot of those areas but it would be nice for the kids to have more opportunity. Then again my goal is to make them one of those capital gains so - irony I guess. 
 

Quote from @Eric Bilderback:

Quote from @J Scott:

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.  😕

 Awwww now I feel good.  

I love this country and I love investing, wealth, all of it.  But this country is not what it once was and I don't think people here on BP understand or can sympathize that some of the very factors that have made their investments successful have had the opposite effect on other communities.

@J Scott your a gentleman have a great weekend,

I’ll be the first person to say unchecked capitalism (in fact there was a big thread months ago where I said this) is killing this country. We actually need a progressive capital gains tax at some reasonably high dollar amount. I agree no argument. I still would want to see the bank save that happened because of how many people would get crushed.

I think part of is just as it’s not black and white around corp bailouts - the same goes for the other end of it. Join anti work and they talk about 99% tax rates and many of here on BP would be targets because of our independent wealth.  I’m a big believer it’s not black, it’s not white but grey.

 

Quote from @Bruce Woodruff:

Quote from @J Scott:

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. 

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......

Least bad option. Simple as that. 
 

But hey if we ever want to make criminal charges / lifetime bans tied to stuff like this is financial system - I’m all for it. Because that would solve it over time.