Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

What's up with the Repo rate?

Discussions about the economic and financial ramifications of PEAK OIL

Re: What's up with the Repo rate?

Unread postby Revi » Fri 08 Nov 2019, 13:07:53

I guess the market's way up lately, so that's something. Everything's fixed this week!
Deep in the mud and slime of things, even there, something sings.
User avatar
Revi
Light Sweet Crude
Light Sweet Crude
 
Posts: 7274
Joined: Mon 25 Apr 2005, 02:00:00
Location: Maine

Re: What's up with the Repo rate?

Unread postby Outcast_Searcher » Fri 08 Nov 2019, 16:04:45

sparky wrote:.
I'm not so sure about the importance of the trade deals ,
they certainly matter but seems to be used as an excuse to move the stock markets
in a time of very low return on money investment , money flow to shares
the returns are slim but better than lending money
so the stock market valuations are just financial refuge for lone desperate trillions of bucks

Well, certainly they don't matter if they're not real. It would mainly be about helping confidence that reasonable growth is feasible going forward.

At least if China isn't making more short term threats re trade, that's better than things have been with them.

Unfortunately, as per usual, how can anyone have any confidence over what Trump says when the story changes daily in some cases, or what he says defies objective reality in many others?

I'll give him a break on the things open to political interpretation -- since all "successful" politicians play the spin game. But on the rest, not so much.

The stock market will end up where it ends up, re the overall economy and confidence. If the recent turmoil re all the negative trade news and fears hadn't happened, we probably would have set the stock market records earlier, but could well have ended up in the same place.

There's FAR too much fixation over day to day and even month to month stock market movements, IMO. The markets are trying to digest a LOT of information, often conflicting information, and they're also trying to look 6 to 12 months ahead. Little wonder the short term meanderings are so random.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 7219
Joined: Sat 27 Jun 2009, 20:26:42

Re: What's up with the Repo rate?

Unread postby evilgenius » Sat 09 Nov 2019, 12:12:45

The general trend, over a temporary move in one direction or another, is what matters. That's precisely why I am worried about the anti-globalization of Trump. Globalization, and the actual US dominance of the result rather than the perceived failure, have caused much of the stock market run up that everybody is pointing to when they cite the markets as proof that everything is well. Will there be a change? Will that change come about because of the perception of failure, or some new position that seeks to curry favor with those who feel that way, but still embraces globalization?
Will we pull back from the world we are on the cusp of achieving? Even slightly altering its approach could be dangerous for the US, as there really is talk of abandoning the dollar as the world's reserve currency https://www.cnbc.com/2019/10/31/de-dollarization-russia-china-eu-are-motivated-to-shift-from-using-usd.html?&qsearchterm=reserve%20currency. That's much easier to do, if other countries perceive that the US no longer takes the stance that open markets are the best thing for it, but, instead, offers some sort of compulsion that incites resentment among even historical allies.
User avatar
evilgenius
Intermediate Crude
Intermediate Crude
 
Posts: 2687
Joined: Tue 06 Dec 2005, 03:00:00
Location: Stopped at the border.

Re: What's up with the Repo rate?

Unread postby Outcast_Searcher » Sat 09 Nov 2019, 12:53:33

evilgenius wrote:The general trend, over a temporary move in one direction or another, is what matters. That's precisely why I am worried about the anti-globalization of Trump. Globalization, and the actual US dominance of the result rather than the perceived failure, have caused much of the stock market run up that everybody is pointing to when they cite the markets as proof that everything is well. Will there be a change? Will that change come about because of the perception of failure, or some new position that seeks to curry favor with those who feel that way, but still embraces globalization?
Will we pull back from the world we are on the cusp of achieving? Even slightly altering its approach could be dangerous for the US, as there really is talk of abandoning the dollar as the world's reserve currency https://www.cnbc.com/2019/10/31/de-dollarization-russia-china-eu-are-motivated-to-shift-from-using-usd.html?&qsearchterm=reserve%20currency. That's much easier to do, if other countries perceive that the US no longer takes the stance that open markets are the best thing for it, but, instead, offers some sort of compulsion that incites resentment among even historical allies.

But surely the vast majority of people can see that Trump and most of his antics are an anomaly. Of course, electing someone like Warren who wants to see how rapidly she can steal wealth to buy the election is just a different sort of catastrophe, re much of what has made America successful.

So, let's assume America's days of global dominance are behind it, and China takes over: in terms of economic power, military power, and having the global reserve currency. (Given current trends, the question isn't if, but when).

I don't see why that's so "dangerous" for America. If America focused on spending for things like infrastructure and education vs. a gigantic military to "police the world", that would seem like a good thing for America. As long as the US maintains its nuclear arsenal and the will to use it in self defense, it's not like China is going to try to militarily conquer the US. (And in fact, primarily maintaining the capability could be the bulk of the US defense spending, at something like 20 to 25% of what it spends today, including a "normal" level or overall defense). If China did try to strongly attack the US and its top 50 or 100 cities get nuked, so much for China's dominance. And if China wants to pay a $trillion or more annually to do things like police the Middle East -- let them "enjoy" that role of global leader.

Despite endless concerns on the net re the dollar, currency strength is about trust at the end of the day, and the FX markets do trade over $5 trillion a day among all the major currencies. I have YET to see a convincing argument for why in the modern era, it matters much at all whether the US dollar is the world's reserve currency. Once the initial surprise induced volatility in the dollar passes, SO WHAT? I think all the histrionics over that are just another way for fast crash doomers to tell themselves there's yet another reason to expect "doom". If the dollar ends up, say, 20% or 30% weaker, it's not doom, it means foreign goods are somewhat more expensive.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 7219
Joined: Sat 27 Jun 2009, 20:26:42

Re: What's up with the Repo rate?

Unread postby rockdoc123 » Sat 09 Nov 2019, 13:10:56

If China wants to pay a $trillion or more annually to do things like police the Middle East -- let them "enjoy" that role of global leader.


they most certainly will not elect to do that. What I witnessed in Africa over the years was Chinese national companies with zero regard for human rights, the environment or anything else that many believe are essential. As partners, they refused to participate in humanitarian investments, traded weapons for opportunities, blatantly stole technology and were more than willing to put their own people at risk. Maybe they are gradually changing and becoming more "responsible" but I acknowledge their culture is a lot different from our own, very hierarchical. I just can't see them stepping up as World Police unless there was something in it for them (which is a danger in itself).

So the US and Nato can decide to back off all responsibility and then I think it will be every megalomaniac dictator for himself. In keeping with what I think Trump is after which is insular countries and walking away from globalization. Good or bad depending on your perspective I suppose.
User avatar
rockdoc123
Expert
Expert
 
Posts: 7194
Joined: Mon 16 May 2005, 02:00:00

Re: What's up with the Repo rate?

Unread postby Outcast_Searcher » Sat 09 Nov 2019, 14:04:07

rockdoc123 wrote:
If China wants to pay a $trillion or more annually to do things like police the Middle East -- let them "enjoy" that role of global leader.


they most certainly will not elect to do that. What I witnessed in Africa over the years was Chinese national companies with zero regard for human rights, the environment or anything else that many believe are essential. As partners, they refused to participate in humanitarian investments, traded weapons for opportunities, blatantly stole technology and were more than willing to put their own people at risk. Maybe they are gradually changing and becoming more "responsible" but I acknowledge their culture is a lot different from our own, very hierarchical. I just can't see them stepping up as World Police unless there was something in it for them (which is a danger in itself).

So the US and Nato can decide to back off all responsibility and then I think it will be every megalomaniac dictator for himself. In keeping with what I think Trump is after which is insular countries and walking away from globalization. Good or bad depending on your perspective I suppose.

All that sound reasonable, given some of China's known behavior.

Now, a rational world community could try to work together, and basically have some sort of global military and economic truce/force which would make it highly unpalatable for at least major players to do really egregious things, given the economic and potential military consequences.

However, given the cluster-f*** the UN mostly is in reality, and how irrational much of the world is, it's not like I expect that any time soon.

As a US citizen, I'd be all for the US maintaining its role as global policeman -- but I'd want the various groups being protected to pay for those services. And I realize that figuring out the tab for, say, middle east oil policing is easier than for many of the other roles we play in force projection.

And yes, if we wanted much of NATO et al to play along with that sort of payment plan, it's a huge ask if we don't elect POTUSes more credible than Trump on the "playing well with others" front.

More and more, as I contemplate the global situation, I can imagine Toffler saying, "See? Future shock! I told you so.") :idea:
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 7219
Joined: Sat 27 Jun 2009, 20:26:42

Previous

Return to Economics & Finance

Who is online

Users browsing this forum: No registered users and 4 guests