Disgusted with obama administration - Part II

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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 1:18 PM
gut;1503736 wrote:Yes, just keep kicking the can. Nothing wrong with that.

And I'd point out, it actually takes TWO parties to prevent a raising of the debt ceiling. Set partisan politics aside - we absolutely should not blame just 1 party for a govt shutdown. The refusal to address past and current profligate spending in a responsible way is simply irresponsible. And the Dems are being just as hard-headed about address the problem responsibly.

The entire purpose of the debt ceiling is to impose some fiscal constraint. I realize that you think any reduction in spending is disastrous but you are simply wrong.
Past and current spending isn't profligate.
Sep 19, 2013 1:18pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 1:19 PM
gut;1503742 wrote:Cough cough govt debt bubble cough cough. No problem, nothing to see here.
Federal Reserve can hit any interest rate target it wants and it would be a policy choice to allow a "bursting of a government debt bubble"
Sep 19, 2013 1:19pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 1:20 PM
gut;1503739 wrote:This is bullshit partisan rhetoric spewed simply to discredit and dismiss people who see a need to address excessive spending. I mean, I guess Reid and Obama only grew a brain when their party came to power because the reality is they all know it's unsustainable when it isn't their turn to play Uncle Sugar.
The only thing that would indicate that our spending is unsustainable would be high inflation expectations. We can't even hit the Fed's target rate so we have nothing to worry about.
Sep 19, 2013 1:20pm
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jmog

Senior Member

6,567 posts
Sep 19, 2013 2:27 PM
BoatShoes;1502970 wrote:lol...fantasy....that will only be true if the law substantially changes or is replaced with something like Medicare for all. They are guaranteed customers and 90% of large employers are still going to be offering group plans with private insurers. The competition in the individual market begins in less than two weeks.
Have you completely ignored the news lately? How many companies are dropping their coverage and giving their employees information on Obamacare exchanges?
Sep 19, 2013 2:27pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 2:45 PM
jmog;1503836 wrote:Have you completely ignored the news lately? How many companies are dropping their coverage and giving their employees information on Obamacare exchanges?
You do realize that the exchanges are the competitive marketplaces wherein insurers will compete to insure individuals, yes?

A very small number of large firms are dropping coverage and upwards of 90% of firms with >50 employees will continue to offer health insurance coverage. Don't let the conservative media eruptions over periodic announcements of firms dropping coverage distort what's really going. Some large firms are dropping insurance coverage at the margin but it's a small amount in the aggregate.

However, even if they did drop coverage en masse and send people to the exchanges where they can buy subsidized individual insurance in a competitive market....this is the essentially the end game that conservatives have wanted for years.....to separate the provision of insurance from employment.

And yes, the exchanges/marketplaces are where the insurers are competing in the individual market. Previously they competed by trying to get young, healthy people (who didn't buy it) and trying to deny coverage for sick people.
Sep 19, 2013 2:45pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 2:46 PM
BoatShoes;1503793 wrote:The only thing that would indicate that our spending is unsustainable would be high inflation expectations. We can't even hit the Fed's target rate so we have nothing to worry about.
Inflation isn't showing in CPI, but it is in asset prices.

Fact: The last two recessions have been triggered by asset bubbles
Fact: The last recession - the housing bubble - was particularly brutal and fueled by arbitrarily low interest rates

The govt debt bubble is massive and like nothing we've seen, to say nothing of ancillary bubbles in debt and equity markets. Just ignore reality and believe because something hasn't happened yet it can't. Refuse to learn from history. That always ends well.
Sep 19, 2013 2:46pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 2:47 PM
BoatShoes;1503792 wrote:Federal Reserve can hit any interest rate target it wants and it would be a policy choice to allow a "bursting of a government debt bubble"
Wow, another fundamental misunderstanding of markets.
Sep 19, 2013 2:47pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 2:49 PM
BoatShoes;1503790 wrote:Past and current spending isn't profligate.
LMAO, the hits just keep coming.

What would you call someone spending 30-40% more than they take in? Frugal? Wait - I know this one - AUSTERE!
Sep 19, 2013 2:49pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 2:52 PM
gut;1503855 wrote:LMAO, the hits just keep coming.

What would you call someone spending 30-40% more than they take in? Frugal? Wait - I know this one - AUSTERE!
Someone who isn't the sole monopoly issuer of the currency and has to obtain dollars before he/she can spend would probably be in trouble. That's not the case for sovereign currency issuer.
Sep 19, 2013 2:52pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 2:55 PM
gut;1503849 wrote:Inflation isn't showing in CPI, but it is in asset prices.

Fact: The last two recessions have been triggered by asset bubbles
Fact: The last recession - the housing bubble - was particularly brutal and fueled by arbitrarily low interest rates

The govt debt bubble is massive and like nothing we've seen, to say nothing of ancillary bubbles in debt and equity markets. Just ignore reality and believe because something hasn't happened yet it can't. Refuse to learn from history. That always ends well.
The natural rate of interest is zero. The only reason it doesn't automatically fall to zero is because the FED intervenes so any suggestion of arbitrarily low interest rates is totally wrong. We could've avoided any harm from the "Bubbles popping" if the people in Congress or the People at the FED would've done enough to prevent NGDP from collapsing.
Sep 19, 2013 2:55pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 3:01 PM
gut;1503851 wrote:Wow, another fundamental misunderstanding of markets.
It is you who fail to understand the power of the FED to determine whatever interest rate it wants to pay on treasury securities and that these bond prices and interest rates aren't being set by a free, competitive market but by a monopolist.
Sep 19, 2013 3:01pm
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QuakerOats

Senior Member

8,740 posts
Sep 19, 2013 3:18 PM
BoatShoes;1503859 wrote:The natural rate of interest is zero. The only reason it doesn't automatically fall to zero is because the FED intervenes so any suggestion of arbitrarily low interest rates is totally wrong. We could've avoided any harm from the "Bubbles popping" if the people in Congress or the People at the FED would've done enough to prevent NGDP from collapsing.
Hogwash (again). Today's artificially low rates are propping up the largest banks whose depositors (savers) are bearing the burden for the financial calamity caused by ..... government. It is sickening to see the producers/savers get 40 basis points on their $3 trillion in prodeced wealth, while the large banks reap the gifted spread from Bernanke & Co. When the charade ends and the walls come tumbling down, look the hell out.
Sep 19, 2013 3:18pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 3:24 PM
BoatShoes;1503866 wrote:It is you who fail to understand the power of the FED to determine whatever interest rate it wants to pay on treasury securities and that these bond prices and interest rates aren't being set by a free, competitive market but by a monopolist.
OMG you need to stop reading ignorant liberal bullshit and actually educate yourself. I'm not sure where to even begin with this. I don't think you understand the variety of factors that go into pricing bonds and are oblivious to the secondary market.

Any idea how treasury auctions work? Saying the FED determines whatever interest rate it will pay is a gross overstatement, and pretending that the Fed can manipulate the rate it pays indefinitely is a fundamental misunderstanding of the process. Ever heard of pushing on a string?
Sep 19, 2013 3:24pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 3:26 PM
QuakerOats;1503885 wrote:... It is sickening to see the producers/savers get 40 basis points on their $3 trillion in prodeced wealth...
Woooaaahhhh....Easy there buddy. Boat isn't ready for a discussion on negative feedback of pensions and people on fixed income getting 40bps.
Sep 19, 2013 3:26pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 3:32 PM
QuakerOats;1503885 wrote:Hogwash (again). Today's artificially low rates are propping up the largest banks whose depositors (savers) are bearing the burden for the financial calamity caused by ..... government. It is sickening to see the producers/savers get 40 basis points on their $3 trillion in prodeced wealth, while the large banks reap the gifted spread from Bernanke & Co. When the charade ends and the walls come tumbling down, look the hell out.
Interest rates are not artificially low. The Fed Funds Rate would go to zero if the FED didn't intervene to hit an interest rate target. So, if you want interest rates to be higher you're saying, necessarily, that you want Treasury to Issue Securities (Gasp gubmint debt) in order for the FED to intervene in the interbank lending market and drain reserve balances and hit its interest rate targets. The only way you get those higher interest rates you want is with Tsy securities and Central Bank intervention to prevent what would naturally happen.
Sep 19, 2013 3:32pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 3:34 PM
gut;1503890 wrote:Woooaaahhhh....Easy there buddy. Boat isn't ready for a discussion on negative feedback of pensions and people on fixed income getting 40bps.
There are plenty of policies that we could implement to provide better incomes for these folks but you would dismiss them out of hand....i.e. a Better social security system. But you still think that a sovereign currency issuer can be insolvent, etc.
Sep 19, 2013 3:34pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 3:39 PM
gut;1503888 wrote:OMG you need to stop reading ignorant liberal bullshit and actually educate yourself. I'm not sure where to even begin with this. I don't think you understand the variety of factors that go into pricing bonds and are oblivious to the secondary market.

Any idea how treasury auctions work? Saying the FED determines whatever interest rate it will pay is a gross overstatement, and pretending that the Fed can manipulate the rate it pays indefinitely is a fundamental misunderstanding of the process. Ever heard of pushing on a string?
There's limitations when it comes to long term bonds because of issues related to the FED's credibility but IMHO we shouldn't even issue longer term treasury bonds anyways.
Sep 19, 2013 3:39pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 4:01 PM
BoatShoes;1503897 wrote:There's limitations when it comes to long term bonds because of issues related to the FED's credibility but IMHO we shouldn't even issue longer term treasury bonds anyways.
The FED doesn't issue bonds. Could you possibly be more ignorant on this topic?

And you believe we can just keep printing money, but think long-term bonds are a bad idea? So locking in low rates is a bad thing? You should do some reading on the term structure of interest rates and duration.

You've got it ass-backwards. It's the short-term rates and rollover risk that make this a precarious game. They should be locking in 2.5% all day on long-term bonds, but they've gone way lower on duration to save a few hundred billion in interest. That's the game of chicken being played, pushing on a string.

Once again, I have no idea what you read or where you get your ideas from, but you should find some better sources or at least ones you understand.
Sep 19, 2013 4:01pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 4:06 PM
BoatShoes;1503893 wrote:Interest rates are not artificially low.
And the hits keep rolling...Do you not understand what QE is and how it functions?

OK, I have to ask...where are you reading that interest rates are not arbitrarily low?
Sep 19, 2013 4:06pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 4:07 PM
gut;1503905 wrote:The FED doesn't issue bonds. Could you possibly be more ignorant on this topic?

And you believe we can just keep printing money, but think long-term bonds are a bad idea? So locking in low rates is a bad thing? You should do some reading on the term structure of interest rates and duration.

Once again, I have no idea what you read or where you get your ideas from, but you should find some better sources or at least ones you understand.
I know the FED doesn't issue bonds you silly goose. I meant the treasury. The FED should just announce that it is going to let FED Funds rate go to zero permanently and the Tsy should only issue short term bonds at best and we wouldn't have to listen to people complain about "debt bubbles" and capital losses for long-term bond holders, etc. etc.
Sep 19, 2013 4:07pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 4:09 PM
gut;1503909 wrote:And the hits keep rolling...Do you not understand what QE is and how it functions?
Lol yes. It's just expanded versions of the OMO's that the FED uses to hit its target interest rates under "normal conditions".
Sep 19, 2013 4:09pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 4:13 PM
BoatShoes;1503915 wrote:Lol yes. It's just expanded versions of the OMO's that the FED uses to hit its target interest rates under "normal conditions".
So if we take out these extraordinary interventions, then interest rates are not going to rise? There's nothing artificial about interest rates when the Fed is buying 80-90% of treasury issues?
Sep 19, 2013 4:13pm
BGFalcons82's avatar

BGFalcons82

Senior Member

2,173 posts
Sep 19, 2013 4:18 PM
jmog;1503836 wrote:Have you completely ignored the news lately? How many companies are dropping their coverage and giving their employees information on Obamacare exchanges?
He's in complete denial of the hideousness of ObamaKare. However, I'm certain there's a way to blame Bush for some, if not most, of the 23,000 pages of evolving horseshit.

Here's today's company delivering the news to their employees and it was one of Barry's shining examples of how great life was supposed to be as predicted in 2009 - http://fox8.com/2013/09/18/cleveland-clinic-employees-react-to-big-budget-cuts/
Sep 19, 2013 4:18pm
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gut

Senior Member

15,058 posts
Sep 19, 2013 4:20 PM
BoatShoes;1503912 wrote:I know the FED doesn't issue bonds you silly goose. I meant the treasury. The FED should just announce that it is going to let FED Funds rate go to zero permanently and the Tsy should only issue short term bonds at best and we wouldn't have to listen to people complain about "debt bubbles" and capital losses for long-term bond holders, etc. etc.
What happens when those bonds come due? In your world there are no repercussions from endlessly printing more money.

Just monetize the debt. Inflation is dead. La-la-lalala, free money. What a reckless and ignorant view.
Sep 19, 2013 4:20pm
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BoatShoes

Senior Member

5,703 posts
Sep 19, 2013 4:21 PM
gut;1503909 wrote:And the hits keep rolling...Do you not understand what QE is and how it functions?

OK, I have to ask...where are you reading that interest rates are not arbitrarily low?
You've got to understand what happens when the government spends. When the government spends it credits a member bank account and therefore adds excess reserves into the banking system. If the government didn't debit a member bank account as a payment of taxes or debit a member bank account when a tsy bond is issued the member banks with excess reserve balances would bid down the overnight lending rate to the interest rate paid on reserve balances (normally zero).

Hence, that is why the natural rate of interest is zero. However, the FED normally sets an interest rate target and has to be able to offer interest bearing securities or set an interest rate on reserve balances that it pays in order to hit that target and thereby intervene in what the otherwise natural rate would be.
Sep 19, 2013 4:21pm