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re: Fed hides weekly M1 supply, says "money doesn't matter"
Posted on 4/8/21 at 7:53 am to Ross
Posted on 4/8/21 at 7:53 am to Ross
quote:
which will reduce the demand for treasury bonds, which will create a positive feedback loop in which our ability to raise capital comes more from the creation of money rather than the borrowing of it, which will absolutely eventually be an inflationary risk.
So you're on the insolvency train? I heard somebody do back napkin math on the corporate sector. If we go back to late 2000s interest rate levels corporate profits take a 33% haircut without even considering credit deterioration and the inability for companies to roll their debt at those levels
1
Posted on 4/8/21 at 7:55 am to wutangfinancial
I get that interest rates increasing creates short term pain in the stock market, but what I just described sounds inherently unsustainable to me and our historical models seem like they are flawed because of the unprecedented capital generation we saw last year.
And I just don’t know how long you can expect institutions to put meaningful amounts of their treasury reserve in an treasury note with negative real yield tbh, when a host of equities seem incapable of meaningfully decreasing in value with this new paradigm and have much better real yield compared to the cost of capital.
Sounds to me like bad fiscal policy got us stuck between a rock and a hard place
And I just don’t know how long you can expect institutions to put meaningful amounts of their treasury reserve in an treasury note with negative real yield tbh, when a host of equities seem incapable of meaningfully decreasing in value with this new paradigm and have much better real yield compared to the cost of capital.
Sounds to me like bad fiscal policy got us stuck between a rock and a hard place
This post was edited on 4/8/21 at 8:02 am
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