GET A GRIP Profile picture
Feb 22 8 tweets 2 min read
The 'Fed put': if stock markets fall by 20-25%, central banks will ride to the rescue by cutting interest rates & increasing money supply via QE. The logic is that the world has so much debt that failing to act would incinerate the financial system. But...
theconversation.com/stock-markets-…
A drop of more than about 25% could set off a chain reaction of bad debts that could destabilise the biggest banks and cause a crisis that would make 2008 look mild.

As the global economy shut down in the face of the COVID pandemic, the Fed then swung into full rescue mode.
The Fed announced the most aggressive QE programme to date to support the economy, and the balance sheet ballooned to nearly US$9 trillion by late 2021.

The result of all this easing has been a huge surge in asset prices – not only stocks and bonds but also property.
Though it’s difficult to estimate the effect, the wealthiest 10% in the US now own over 60% of assets, while the poorest 50% own less than 6%.

Coming out of the pandemic means the labour market is robust and lower-skilled workers are finding new opportunities with higher wages.
Yet consumer confidence is low, which is partly due to high inflation. Consumer prices in the US rose by a staggering 7.5% over the 12 months to January 2022, the largest since the early 1980s, while the situation has been similar elsewhere, including here in the UK.
The big fear is that workers begin demanding equivalent pay rises in response. This could cause a wage-price spiral in which producers further raise their prices to pay for higher wages, sparking further wage demands and so on – essentially making inflation a longer-term problem.
Raising rates and winding down QE should be much more achievable with today’s healthier financial system, but it is therefore much less likely that the central banks will rescue the financial markets from a crash by U-turning on tightening out of fear that the system won’t cope.
How far markets fall as the economy slows down depends on many things, not least the Ukraine-Russia conflict and the path of inflation.

But with the Fed put /QE arguably no longer in play, everyone from pension holders to retail investors should tread very carefully. 🤞

• • •

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

Keep Current with GET A GRIP

GET A GRIP 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!

PDF

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 @docrussjackson

Feb 23
#THREAD Putin, Corbyn & Russian money...

In Parliament on March 13th, 2018, after the poisoning of Sergei Skripal, Corbyn drew attention to the Govt “resisting Labour’s amendments to the Sanctions & Anti-Money Laundering Bill that could introduce the so-called Magnitsky powers”.
The @Conservatives responded with cries of “shame” & “disgrace”, which were loudest when Corbyn attacked them for having so many extremely wealthy Russian donors giving them huge amounts of cash.

But ignore the backbenchers, & listen instead to Putin's actual opponents.
What do those brave men & women around the world risking their lives to fight Putin have to say? A cursory look will tell you that what they have to say sounds rather more like Jeremy Corbyn than anything then PM Theresa May or any other Tory at the time had to say on the matter.
Read 24 tweets
Feb 22
In 'After neoliberalism: analysing the present', Stuart Hall, Doreen Massey & Michael Rustin, the founding editors of Soundings, set out their framing analysis for their 2013 online 'Kilburn Manifesto'. Image
Stuart Hall diagnosed the conjuncture: "The breakdown of old forms of social solidarity is accompanied by the dramatic growth of inequality & a widening gap between those who run the system or are well paid as its agents, & the working poor, unemployed, under-employed or unwell."
In 2013, The Sunday Times Rich List was topped by two Russian oligarchs and an Indian billionaire.

Stuart Hall said "They live a life totally divorced from and almost unimaginable by ordinary people, fuelled by an apparently unstoppable appetite for profit."

Since then, well... Image
Read 17 tweets
Feb 22
"It’s not just the economy, stupid."

Surveys show that Americans are paying attention to what’s going on with political tensions in Ukraine — more than they would have about past foreign affairs issues.

ft.com/content/f6d53c…
The current crisis dovetails with the issue of inflation, but it is also a reminder that we are now in a post-American world, where the US no longer calls all the shots and there are new regional powers including China that are shaping global economics and markets in new ways.
It’s important to start to grapple with all this honestly. Take supply-chain disruptions: many experts predict they’ll abate by the end of the year, and that may be true in the short term. But in reality, supply chains are only at the beginning of a long-term, fundamental change.
Read 5 tweets
Feb 22
#THREAD

One of the biggest & most urgent problems that Britain faces - which politicians, the press, and the national broadcast media rarely, if ever, discuss - is the constant amplification of extreme and divisive voices, in an increasingly polarising national media.
The space for intelligent, measured, nuanced, rational, respectful and reasonable debate, between people who represent the views of the vast majority of British people, has been squeezed out by a tiny pool of contrarian and deliberately provocative voices, chasing viral content.
Instead of qualified, intelligent and nuanced experts - who represent the consensus on important issues from climate change to crime, and from COVID to the economy - we get a constant stream of the same tiny number of professional contrarians, who hold marginal & divisive views.
Read 12 tweets
Feb 21
Manipulative charismatic gurus target emotionally insecure social outcasts, prone to believing conspiracy theories, telling them they are 'special'. Their dangerous cobbled together ideologies invariably include unverifiable psychological theories. Joe Rogan interviews them.
We don't know why Joe Rogan’s podcast has vanished from @Spotify.

What we DO know is that paying $200MILLION to a bloke to chat with people who have controversial OPINIONS tells us more about why capitalism is fucked up than any of his guests ever have.

independent.co.uk/tech/joe-rogan…
And for anyone that believes the likes of Jordan Peterson are in any way going to help working class people, or help save us from a cabal of manipulative & exploitative elites, well, maybe you need open your eyes & ears wider, & dig a little deeper. 👍

Read 5 tweets
Feb 20
#THREAD

The source for Jordan Peterson’s claim on the Joe Rogan podcast that 'climate change cannot be modelled' was Fred Singer, a climate science denier who received money from the Heartland Institute, a libertarian think tank funded by oil companies.

desmog.com/2022/01/28/jor…
In 2014 @DeSmog revealed Fred Singer received $5,000/month from US right-wing think tank the Heartland Institute, funded in part by ExxonMobil & Koch.

Singer spoke at a 2012 Heartland conference where sponsors received $67MILLION from Exxon, Koch & the Scaife Family Foundations. Image
Fred Singer was known for rejecting the overwhelming scientific consensus on many issues, including climate change, the connection between UV-B exposure & melanoma rates, stratospheric ozone loss being caused by chlorofluoro compounds, & even the health risks of passive smoking.
Read 11 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

Don't want to be a Premium member but still want to support us?

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

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

:(