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uncledad

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Member since: Tue May 13, 2014, 06:50 PM
Number of posts: 5,424

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Negative interest rates: absolutely everything you need to know

Conclusions

Negative interest rates have become part of the central bank’s toolkit for responding to an economic downturn when nominal interest rates are already very low. They have worked largely as interest rate policy does in positive territory. This is a success and shows that central banks have a bit more firepower than they thought they had.

However, there are limits to how far interest rates can fall below zero in the absence of further measures to reduce general financial and economic risks.

With lacklustre growth, high unemployment and stubbornly low investment activity in many economies, policy-makers may want to do more, and monetary policy is far from the only option, although other types of monetary policy measures can be used. Public investment projects and a boost to government spending more generally can go a long way in complementing rate cuts. Government spending has a good track record when it comes to boosting growth, particularly when interest rates are low.

Supply-side reforms, ideally combined with fiscal policies, can also help to make economies more competitive and productive by improving the functioning of markets, upgrading educational systems, building critical infrastructure and unleashing entrepreneurship and innovation. Such measures will increase the potential for future growth. If this is understood – and believed – by the public, it could also increase confidence here and now, boosting spending and growth.

https://www.weforum.org/agenda/2016/11/negative-interest-rates-absolutely-everything-you-need-to-know/

Dow 25896

Previous close 26287. 52 wk high 27398. 52 wk low 21712. Today's low 25824. High 26178.

NASDAQ : 7863 ▼

S&P : 2882 ▼

Soybeans : 8.62 ▼

DOW 26287 for Friday 8-9-19

Previous close 26380. 52 wk high 27398. 52 wk low 21712. Today's low 26097. High 26413.

26486 last Friday's close.

NASDAQ : 7959 ▼

S&P : 2918 ▼

Soybeans : 8.75 ▲

DOW 26380

Previous close 26007. 52 wk high 27398. 52 wk low 21712. Today's low 26038. High 26383.

NASDAQ : 8039 ▲

S&P : 2938 ▲

Soybeans : 8.63 ▲

Recovered some ground.

DOW 26007

Previous close 26030. 52 wk high 27398. 52 wk low 21712. Today's low 25440. High 26073.

NASDAQ : 7862 ▲

S&P : 2884 ▲

Soybeans : 8.48 ▼

Thanks for your hard work Plunge Protection Team !

Pelosi markets are having a bad start...

Algos set in the wrong direction...

DOW 26030

Previous close 25719. 52 wk high 27398. 52 wk low 21712. Today's low 25710. High 26038.

NASDAQ : 7833 ▲

S&P : 2881 ▲

Soybeans : 8.50 ▲

A pick up of 1% across the markets.

DOW 25719

Previous close 26486. 52 wk high 27398. 52 wk low 21712. Today's low 25523. High 26259.

NASDAQ : 7726 ▼

S&P : 2844 ▼

Soybeans : 8.50 ▼


DOW -2.9%

NASDAQ -3.4%

S&P -2.9 %

the mechanics of negative interest rates

I explain to mrs_horseman the mechanics of negative interest rates. < that's the original title by the author.

A bond is simply a loan agreement between a borrower and one or more lenders. It has an initial loan amount called the par value, an annual payment amount called the coupon, and a date called maturity, when the loan is to be paid back in full. To keep the math simple, let us use the following for our illustration:

&

For anyone interested in how bonds and negative interest rates work. It's well done (IMHO)

https://www.zerohedge.com/news/2019-08-02/i-explain-mrshorseman-mechanics-negative-interest-rates

Pentagon Tops $2 Trillion in Costs to Field Major Arms Programs

The estimated total price for F-35 research and procurement has risen by $22 billion, according to the report, and the estimate for operating and supporting the fleet of fighters over more than six decades grew by almost $73 billion to $1.196 trillion. The increase reflects for the first time the current cost estimates for a major set of upgrades planned in forthcoming “Block 4” modifications, according to the report. Bloomberg News first reported the projected cost increase in April.

Missile programs accounted for some of the largest increases, particularly because of the boost in quantities that the military services plan on buying. Lockheed Martin’s Joint Air-to-Surface Standoff Missile program costs increased by 113.4%, or $5.3 billion, according to report data. That boost is primarily because the Air Force now plans to buy 7,200 missiles—an increase of 4,335.

The costs of the Navy’s Standard Missile program, under contract with Raytheon Co., increased $2.7 billion, or 31.5%, to $11.5 billion, because of plans to buy 2,331 missiles, a boost of 531 from previously planned numbers.

The Army had scrapped the funding in its fiscal 2020 budget request as part of a plan to save $962 million through 2024 by cutting 28 of 68 previously planned Chinook heavy-lift helicopters. The Chinook proposal is the most controversial part of the Army’s plan to shift as much as $31 billion through 2024—which would be saved from trimming 186 existing programs and lowering troop levels—into new projects intended to position the service for a potential conventional conflict with Russia or China.

https://about.bgov.com/news/pentagon-tops-2-trillion-in-costs-to-field-major-arms-programs/

Business as usual for the MIC.
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