Curt Doolittle

Category: Economics, Finance, and Political Economy

  • BANKS: WAIT FOR EVIDENCE I enjoyed the SVB debacle on Friday, and the events cre

    BANKS: WAIT FOR EVIDENCE
    I enjoyed the SVB debacle on Friday, and the events created a wonderful opportunity to catch eyeballs and chide, insult, criticize and defame our banking and finacial system, our fed and treasury, our government, and the problems of the ‘experiment’ we’re running with the postwar economy, and funny money.

    That said, this is a fed-created problem that could have been fed-solved with a few phone calls, and a little humility. Because the only real problem the company had was holding government bonds at tiny interest instead of filling a vault with at the fed with physical currency and electronic digits. And when the government raised interest rates, those otherwise liquid bonds turned immediately from liquid into illiquid. So does the fed want us to stop buying bonds so it can use our cash in exchange for giving us a couple points of interest? It’s ridiculous.

    So this vast drama-queen attention-whoring and wisdom-pretention on social media is embarassing. If there is contagion it’s intellectually embarassing, and confirms the political catastrophe of our government as it continues to fail at one thing after another. Because this isn’t like 08 where there were nonsense novel financial instruments out there (that many of us criticized teh entire time they were used), instead this is the fed flooding the market with cheap money, trading it for a security, then trashing the value of the security.

    I’d say why aren’t the grownups in charge? the answer is … there aren’t any.

    #SVB #SVBank #SVBCollapse #SVBCrash

    Source date (UTC): 2023-03-12 19:57:49 UTC

    Original post: https://twitter.com/i/web/status/1635007206071365633

  • THE (REAL) ROLES OF THE FEDERAL RESERVE by: Thomas Massie @RepThomasMassie U.S.

    THE (REAL) ROLES OF THE FEDERAL RESERVE
    by: Thomas Massie @RepThomasMassie
    U.S. Representative for KY4

    Let’s review the Federal Reserve Bank’s many roles, and how each of them enabled the SVB failure and malfeasance:

    (1) Santa Claus. (Hazarder, “baiting into hazard”)
    By… https://twitter.com/RepThomasMassie/status/1634949873803075587

    Source date (UTC): 2023-03-12 18:44:23 UTC

    Original post: https://twitter.com/i/web/status/1634988724072198146

  • EE ON ROUBINI ON MEGATHREATS (please watch. my two comments below for general au

    EE ON ROUBINI ON MEGATHREATS
    (please watch. my two comments below for general audiences:)

    1) EE made a minor point that was helpful for general audiences: Lawyers and Economists are paid to identify risks, that improve your chances regardless of which https://www.youtube.com/watch?v=XmxRR3ZG02M…

    Source date (UTC): 2023-03-12 16:35:02 UTC

    Original post: https://twitter.com/i/web/status/1634956174582849536

  • True. Take it further: given that tolerance for float (before default) varies fr

    True. Take it further: given that tolerance for float (before default) varies from country to country, and wages, and taxes on wages, are the majority of float, I’ve wondered why we pay taxes first, or why, in the extreme, the central banks don’t carry the float. The state (especially UK) is far more concerned about a biz exporting a visible quantifiable loss to the state, than it is about the externalization of an invisible unquantifiable chain of causality into the economy the state taxes? That only sounds a bit odd if you don’t do the math. And the data the state would get from that float movement would provide the best and fastest information on the economy without externalizing the cost of reporting onto every biz in the system.

    Reply addressees: @Max_Stoic

    Source date (UTC): 2023-03-12 15:42:35 UTC

    Original post: https://twitter.com/i/web/status/1634942972901875712

    Replying to: https://twitter.com/i/web/status/1634613421306966022

  • True. Take it further: given that tolerance for float (before default) varies fr

    True. Take it further: given that tolerance for float (before default) varies from country to country, and wages, and taxes on wages, are the majority of float, I’ve wondered why we pay taxes first, or why, in the extreme, the central banks don’t carry the float. The state (especially UK) is far more concerned about a biz exporting a visible quantifiable loss to the state, than it is about the externalization of an invisible unquantifiable chain of causality into the economy the state taxes? That only sounds a bit odd if you don’t do the math. And the data the state would get from that float movement would provide the best and fastest information on the economy without externalizing the cost of reporting onto every biz in the system.

    Source date (UTC): 2023-03-12 15:42:35 UTC

    Original post: https://twitter.com/i/web/status/1634942973010911233

    Replying to: https://twitter.com/i/web/status/1634613421306966022

  • Vapid Criticisms The current problem is the intersection of inflation vs interes

    Vapid Criticisms
    The current problem is the intersection of inflation vs interest rates to suppress it, and no possibility of buyback from the treasury on 2% securities that they could then re-issue at 5% at tiny cost to taxpayers.

    This would prevent both SVB failure AND contagion because it was a simple liquidity problem caused by the delta in interest rates due to the killing of the bond market by the treasury by increasing interest rates. I don’t see distortion out there. I see debt out there. But not distortion.

    The government, treasury, and fed must choose a delicate balance of regulation that doesn’t constrain investment, but maybe constrains debt expansion, and maybe just consumer debt expansion, and to do that the treasury would have to bring (almost) ALL credit (credit money) expansion IN HOUSE.

    Because no one is going to run an economy today on 100% reserves unless the want the entire financial sector to move somewhere that doesn’t.

    Cheers

    Source date (UTC): 2023-03-12 15:32:50 UTC

    Original post: https://twitter.com/i/web/status/1634940518659391489

  • Vapid Criticisms The current problem is the intersection of inflation vs interes

    Vapid Criticisms
    The current problem is the intersection of inflation vs interest rates to suppress it, and no possibility of buyback from the treasury on 2% securities that they could then re-issue at 5% at tiny cost to taxpayers.

    This would prevent both SVB failure AND contagion because it was a simple liquidity problem caused by the delta in interest rates due to the killing of the bond market by the treasury by increasing interest rates. I don’t see distortion out there. I see debt out there. But not distortion.

    The government, treasury, and fed must choose a delicate balance of regulation that doesn’t constrain investment, but maybe constrains debt expansion, and maybe just consumer debt expansion, and to do that the treasury would have to bring (almost) ALL credit (credit money) expansion IN HOUSE.

    Because no one is going to run an economy today on 100% reserves unless the want the entire financial sector to move somewhere that doesn’t.

    Cheers

    Source date (UTC): 2023-03-12 15:32:50 UTC

    Original post: https://twitter.com/i/web/status/1634940518781034498

  • Vapid. The problem is the intersection of inflation vs interest rates to suppres

    Vapid.
    The problem is the intersection of inflation vs interest rates to suppress it, and no possibility of buyback from the treasury on 2% securities that they can re-issue at 5%. This would prevent both SVB failure AND contagion because it was a simple liquidity problem caused by the delta in interest rates due to the killing of the bond market by the treasury by increasing interest rates. I don’t see distortion out there. I see debt out there. But not distortion.

    Reply addressees: @MikeHuez

    Source date (UTC): 2023-03-12 15:28:42 UTC

    Original post: https://twitter.com/i/web/status/1634939479239585792

    Replying to: https://twitter.com/i/web/status/1634937059256446978

  • Vapid. The problem is the intersection of inflation vs interest rates to suppres

    Vapid.
    The problem is the intersection of inflation vs interest rates to suppress it, and no possibility of buyback from the treasury on 2% securities that they can re-issue at 5%. This would prevent both SVB failure AND contagion because it was a simple liquidity problem caused by the delta in interest rates due to the killing of the bond market by the treasury by increasing interest rates. I don’t see distortion out there. I see debt out there. But not distortion.

    Source date (UTC): 2023-03-12 15:28:42 UTC

    Original post: https://twitter.com/i/web/status/1634939479331860482

    Replying to: https://twitter.com/i/web/status/1634937059256446978

  • CLEAR EXPLANATINO OF WHY SVB GOT HIT. (“A bit of a management judgement, combine

    CLEAR EXPLANATINO OF WHY SVB GOT HIT.
    (“A bit of a management judgement, combined with wrong place at wrong time so to speak”)
    Again, I’m just using this as an example of why I’ve suggested accounting and reporting reform. Not so much because people are https://www.youtube.com/watch?v=G1qNAPVx8A4…

    Source date (UTC): 2023-03-12 00:54:39 UTC

    Original post: https://twitter.com/i/web/status/1634719518571282432