Lots of confusion about why Mnuchin is cancelling certain Fed emergency credit facilities, and what it means

couple of observations...
First, the facilities in question have only small current commitments outstanding (summing them up <$18bn). This is very small in a macro context.

full list attached
Second, it is not very helpful to have the Treasury and the Fed in open disagreement about this type of issue. This probably explains why markets reacted negatively.
Third, what happens to the funds now? There seems to be no clear plan. But it is up to Congress how to 'reappropriate', with the usual political issues involved

@stevenmnuchin1 said as much to Bloomberg

Fourth, once the funds have been spent, it will be hard to secure fresh funds to backstop Fed facilities. Hence, if there is a need to put such credit facilities in place under a Biden administration, it may be tricky/a slow process to get it done.
The key bit is probably whether Congress will be able to spend these funds in a sensible way, and quickly. But that issue is subject to the usual 'gridlock' issues, and we have not learnt a lot about that prospect today. I will leave it at that. The US is a complex country. END

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Jens Nordvig

Jens Nordvig Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @jnordvig

18 Nov
Closer than expected... Image
The details are here: fox5atlanta.com/news/fox5-poll…
Everybody hates polls, so adding this color:

The votes counted so far, yields 49.7% Perdue, and 48% Ossoff (so Ossoff -1.7%)

RealClear had Ossoff at +0.7% going in

So, no major difference between polling (average) and actual result for Georgia.
Read 4 tweets
16 Nov
There is a lag between cases & deaths, and as we see acceleration in cases, there is always a debate about whether fatalities will follow. That debate was there in the US second wave in the summer, in the European 2nd wave in recent weeks, & now again in the US 3rd wave

US cases are exploding, we all know that...

But fatalities are growing much more slowly. Does it mean that the 3rd wave is totally different?

Read 13 tweets
14 Nov
I will repeat a point I have made before. When I look at the momentum in COVID cases in Europe (proxy for Rt if you will) the most important thing to monitor now is whether 'lockdown lite' can work.
We know that full-blown lockdown will will work. But it is more interesting that the Netherlands, Germany and Denmark are getting case growth down notably by embarking on lockdown lite (shops remain open, restaurants are restricted (but not shut), mask mandate in public places)
The Netherlands has had negative (smoothed) case growth for 11 days. Denmark has had negative case growth for a few days. Germany is close to zero case growth (Rt=1) on the smoothed measure. But it growth actually turned negative on the non-smoothed daily metric, today. Image
Read 5 tweets
29 Oct
Europe COVID. This week perceptions, and policies changed.

Over the last few weeks, our models have been predicting a significant increase in COVID deaths by end-October

Most though the forecast were alarmist. But the reality is that they have been too low...
Back in mid-October, we predicted a spike to above 500 over the coming 2 weeks...

But the realized numbers are already well above that now.

France is already trending at 250 deaths per day
Read 13 tweets
24 Oct
The WSJ has a good overview of the record number of US COVID cases recorded in the latest daily data. They discuss the various factors contributing. But they do not mention weather/temperature. I think that is a mistake... @JenCalfas @bysarahkrouse

But there is a relationship developing between temperature and transmission rates. Colder areas (states) are seeing more transmission. [R is higher]
This relationship is not always there, as it is non-linear (only kicks in when temperature is below a certain point). But it is there globally too...

[discussed in this THREAD]

Read 7 tweets
23 Oct
There is a big debate about the European 2nd wave, and whether it is serious or not. And it is surely hard to look at cases alone, since the testing quantity is totally different. I think looking at the dynamic CFRs is very informative....

= mini-THREAD
The table here shows Case Fatality Rates over time for several European countries, using recent deaths vs lagged cases. Image
It shows that you cannot really talk about severity in a uniform sense.

Some countries, such as France, Finland, Sweden, Norway an Denmark have stable an very low fatality rates (<1%) even with cases ticking up.
Read 9 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!