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> One of my favorite things to highlight was that following the Fed receiving taxpayer funds to prop up the stock market Disney had their greatest single day stock gains in history all while every single theme park, hotel and cruise ship were indefinitely shutdown and every single movie production was indefinitely suspended.

This only sounds meaningful when you take it out of context. Leading up to that it was quite clear the government had effectively mandated for Disney to stop doing business. One day a business, one day not. It was on a trajectory to zero.

It only had a good day after the government decided “maybe it will be less damaging to the economy to float all of the existing companies through this huge pause rather than let them all collapse and have everyone lose their retirement and their job simultaneously”.

The same for cruises, airlines, hotels, restaurants, museums, concert halls, doctors offices, etc. All sane businesses one day worthy of investment, the next day not.

There really aren’t parallels to what happened in 08 here. In 2008 it was a single sector imploding that happened to be the one with its tentacles wrapped around everything else. With Covid everything was failing because everything stopped.

> There really aren’t parallels to what happened in 08 here.

Well leading up to 2008 the banks were making record profits and had record high stock prices. However, they were under funded, over leveraged and couldn’t absorb their losses.

Similarly, in 2020 nearly all publicly traded companies were trading at all time highs, but in reality they were all significantly overvalued and the businesses themselves were all significantly over leveraged.

You are focused on the difference in the cause of the losses, rather than the historic valuations completely detached from business fundamentals (i.e. the bubbles), and the governmental responses to prop up bubbles. Taxpayer funds shouldn’t have gone to financing foreclosures and acquisitions for failing banks and they shouldn’t have gone to the Fed to propping up businesses record high stock prices.

> “maybe it will be less damaging to the economy to float all of the existing companies through this huge pause rather than let them all collapse and have everyone lose their retirement and their job simultaneously”.

The irony is you are using the very same political justification for the government response to the banks in 2008, and it only highlights my point how people will be all to happy to say thank you for allowing us to bailout your failing business and return it to record high stock prices.

One my pet peeves is that better ventilation legislation has been blocked and for that 7T you could probably upgrade every ventilation system in existence. According to a NYT article the average vent system is 4 on a scale to ten. In a pandemic you want something like an 8.

This would seriously hamper COVID / airborne viruses.

> better ventilation legislation

Why worry about ventilation and masking - particularly in schools - when one could spend that time looking at data showing who is actually at risk, and how to protect them.

Spoiler: for this pandemic at least, the risk group simply isn't healthy children. Or indeed healthy young adults. Or maybe even anyone healthy under say 45[0]

Our 8 year old had a PCR-confirmed Covid infection three weeks ago, as far as we know that's the first case in our immediate family. He's not vaccinated.

For him, it represented a four-hour headache. No fever, no sore throat, no cough. He's finally been allowed to go back to school this week.

[0] https://www.euromomo.eu/graphs-and-maps

What about the teachers and all other staff at the school? Or everyone those children will run into, like parents, siblings, grandparents, friends, etc.? Even if the majority of them are healthy and under 45, some won't be and would require hospital treatment. And that's a severely limiting factor on how much Covid a health system can bare - in many countries that was stretched to and beyond it's limits. Now thankfully the latest variants are much more benign so that's not really a serious risk, for now.

> What about the teachers and all other staff at the school? Even if the majority of them are healthy and under 45, some won't be and would require hospital treatment.

Isn't this why we developed vaccines? To reduce the risk of serious illness?

"Every year around 600,000 people die in the UK. The Imperial College team estimates that if the virus went completely unchallenged, around 80% of people would be infected and there would be around 510,000 deaths.

So, roughly speaking, we might say that getting COVID-19 is like packing a year’s worth of risk into a week or two. Which is why it’s important to spread out the infections to avoid the NHS being overwhelmed."[0]

Once we've vaccinated a large proportion of the at-risk groups, then the risk of overwhelming the hospitals drops. Then life can, and should, get back to normal.

[0] https://wintoncentre.maths.cam.ac.uk/news/how-much-normal-ri...

Anecdotally I am a 30 year old male who is usually only ill for about a day or 2 every year. I had COVID for a couple of days and then a week later after recovery a started getting this super-dry cough. This stayed with me for 2 months, first of which was so bad I could barely sleep until I got a codeine-based cough syrup.

On the other hand I was also considering what our politicians did to the society keeping them locked up in their rooms and not training their immune systems on a regular basis which usually happens with normal interaction.

> One of my favorite things to highlight was that following the Fed receiving taxpayer funds to prop up the stock market Disney had their greatest single day stock gains in history all while every single theme park, hotel and cruise ship were indefinitely shutdown and every single movie production was indefinitely suspended.

Probably because of their massively successful streaming service that was perfectly placed to pick up the slack. They also have one of the deepest content libraries around so production stoppage hurts them less than competitors like Amazon, Netflix, AppleTV.

To drive it home, Disney had record revenue in 4Q2021, driven by streaming and parks revenue [1]. Maybe it’s you who had it wrong?

[1] https://www.marketwatch.com/story/disney-stock-soars-after-r...

> To drive it home, Disney had record revenue in 4Q2021, driven by streaming and parks revenue [1]. Maybe it’s you who had it wrong?

You are cherry picking an article from Q42021 that references park revenue, whereas I gave a very specific example of their record single day gains in company history which occurred while the parks were closed in 2020.

As to Disney+ streaming service it launched in 2020 but the Disney+ lost $2.8B in fiscal 2020, the same period of time it’s parks were closed and park losses total about $7B, and yet during this period it saw it’s record single day stock price gains in history. That record day was a direct result of the Fed and taxpayer money, not record theme park revenue (it was record losses) nor Disney+ which was a brand new division and recording its own multibillion dollar losses.

The article is proof that investors were correct. Stock prices are a present value of future earnings. In 2020, after the stock price had already tanked due to COVID and the bailout was announced, investors thought future earnings would increase. They bid up the stock price to acknowledge that belief.

At the time Disney+ was losing money, but the pandemic and the bailout were indicators that the steaming business would take off (it did). Their huge content backlog had them perfectly placed to manage a production shutdown. There’s also the 21st Century Fox acquisition that was Closed in 2019 and gave them more content.

If investors expected future earnings to grow more than current losses (which were already priced in by the market), then it isn’t wild for the stock to bounce. A year later, their earnings pretty much prove it.

We could also go into the calculations of why the value of recurring revenue (streaming subscribers) is much higher than the value of non-recurring revenue (park visits).

> If investors expected future earnings to grow more than current losses

Well of course Disney future theme park earnings were going to increase from zero. You aren’t considering the actual E/P ratio.

Pre-Covid Disney both stock price was a at all time high and their E/P ratio was at an all time high (about 22, where usually an 18 is considered over priced).

Those “investors” you suggest were the Fed using taxpayer money buy and prop up the stock price. With the Fed money Disney stock price once again reached a new all time high price and a P/E ratio over 90, meaning the Fed was bailing out shareholders at a historic high of $90+ to $1 earned, where an average publicly traded company should be closer to 13-14.

> Well of course Disney future theme park earnings were going to increase from zero. You aren’t considering the actual E/P ratio.

This isn't how investors think. If you know that future earnings are going to increase from zero due to outside circumstances (COVID, in this case), why would you base your analysis on past earnings? The past earnings don't matter, especially when you admit that they were heavily influenced by COVID.

$1 of recurring revenue from subscriptions (Disney+) is worth more than $1 spent at a Disney theme park. The recurring revenue costs less to service and is more predictable going forward. This is why businesses (like Adobe, Apple, Disney, etc.) have been working to shift revenue towards subscriptions over one-time purchases.

> Those “investors” you suggest were the Fed using taxpayer money buy and prop up the stock price. With the Fed money Disney stock price once again reached a new all time high price and a P/E ratio over 90, meaning the Fed was bailing out shareholders at a historic high of $90+ to $1 earned, where an average publicly traded company should be closer to 13-14.

It feels like you are working backwards to try and find the nefarious actions you are so positive about. The Fed deciding to bailout companies and consumers obviously helped businesses (especially consumer facing businesses, like Disney). The entire stock market exploded when it was announced.

The P/E ratio of the entire S&P 500 spiked from around 20-25x to 40-45x due to Fed and Congressional actions [1]. Average publicly traded companies do not trade at 13-14x P/E, and low interest rates for decades have made that a fact. That said, Disney isn't a traditional company because their investments and growth in streaming make them look more like a growth stock. Which is, again, reinforced by their record revenue numbers.

[1] https://www.multpl.com/s-p-500-pe-ratio

> The P/E ratio of the entire S&P 500 spiked from around 20-25x to 40-45x due to Fed and Congressional actions

Again Disney was double that at 90 after the FED began buying Disney stock/bonds using taxpayer funds and pumped it to an ATH.

> It feels like you are working backwards to try and find the nefarious actions you are so positive about.

It’s all public record, the stock was tanking, after the FED began to directly prop up Disney the stock price reached a new ATH in 2021 at which point executives/insiders, including the Chairman, began to sell sending the price downward from ATH and leaving the FED holding the bag. Despite your claims of Disney behind a growth stock the Chairman liquidated something like 50% of his holdings.

Anyway I’m not here to debate the merits of the Disney stock price. The FED shouldn’t be getting taxpayer funds much less buying Disney stock/bonds, it’s corporate welfare, and when the stock price is propped up to an ATH with taxpayer funds and the Chairman and other executives sell out it’s a golden parachute. Like I said people look back on 2008 and think taxpayers should thank the banks, and similarly people (presumably like you) will think taxpayers should thank companies like Disney that were bailed out by taxpayers.

> There is no doubt that the entire housing market was exploited to float the US economy and covered up a recession dating from 2000-2001

This is false. There is no doubt that, while there was a short recession in early-mid 2001, there was a general economic expansion, not a recession, after that; to the extent that housing market was exploited to paper over something, it was the unusually top-loaded distribution of the benefits of that expansion, where the bottom 3 income quintiles and the fourth quintile was basically flat, with the gains concentrated in a fair small segment at the top, which it covered by (non-sustainably) paying for continued debt-fueled lifestyle improvements for groups that weren't seeing real income gains.

> there was a general economic expansion… with the gains concentrated in a fair small segment at the top, which it covered by (non-sustainably) paying for continued debt-fueled lifestyle improvements for groups that weren't seeing real income gains.

That’s one long sentence.

The thing is it’s impossible to decouple any economic expansion from 2000-2008 from the trillions of dollars that flooded into the economy during that period as a direct result of the artificial housing prices and newly available debt.

I agree with you though to the extent that any actual wealth that was generated was concentrated to the top, it always is. There hasn’t been real income gains for the working class in about 50 years, but the explosion in household and consumer debt in that time is incontrovertible from about $300B in 1970 to $11.5T in 2010.

To some extent we actually have the counterfactual to the US, i.e. not bailing out the banks broadly in Europe. There recovery was slower, banks did do less funding of "real economies" in the aftermath, the bailouts did come with net costs overall and the banks are still not so competitive.

All hail us rich savers, our savings must be subsidized at all costs. The fact that there is barely anything to invest in, the fact that any further investment would make us a loss, all of that must be ignored because human time can obviously be owned and if the people that this time represents dare to do something as foolish as age while they wait for us to employ them, they are clearly stealing from us the value of our money! Aging is a sin. Starvation is a sin. Homelessness is a sin. So we let the government indirectly borrow money from us, to pay for welfare, to keep these people alive so they stop stealing the value of our money from us by dying. How dare they die!

The fact that this debt isn't paid by us but rather by the working class, is how we get away with this scheme. After all, those who work for a living, those who spend almost all of their money, unable to save it for the sake of subjugating society, spending it just to live their life, using it as the medium of exchange so many postulate it to be, do not have any significant savings to speak of and would not significantly benefit from any reward that is proportional to how much they own.

I must remind everyone that the Greece financial crisis was actually a bank bailout program for German banks. After all, savings are the holy cow of the rich. If you take something away that didn't exist, in proportion to how much the real world lost, you are a communist.

If you can't touch the savings and the savings keep growing, the economy must grow in lock step with the savings. Endless growth is just a subsidy to endless savers since you can't tell them to stop.

Adding that although 'the Fed receiving taxpayer funds to prop up the stock market' happened, the USD as the world reserve currency allowed the Fed to create digital dollars ('money printer goes brrr' in wall street parlance) until eventually there are so many dollars in circulation we get inflation ...and here we are...one of the reasons the US now has a weaponized dollar and China and Russia are now openly challenging the reserve currency...

> one of the reasons the US now has a weaponized dollar and China and Russia are now openly challenging the reserve currency

Ah yes, people are just flocking to buy roubles as an inflation hedge, and there's definitely no war on.

Russia has the biggest goal reserves on the planet, presumably in an attempt to attack the fiat dollar. Hot wars are usually ultimately about money.

Not only does Russia not have the biggest gold reserves on the planet, they are 5th after the US, Germany, Italy and France.

The US has just about 4 times more gold reserves than Russia and more than double that of Germany in 2nd.

https://www.statista.com/chart/26940/russian-central-bank-fo...

Did you link the wrong article?

Nowhere does it say that Russia has the largest gold reserves on the planet.

Meanwhile:

https://www.statista.com/statistics/267998/countries-with-th...

https://en.wikipedia.org/wiki/Gold_reserve

https://tradingeconomics.com/country-list/gold-reserves

https://edition.cnn.com/2022/03/11/business/russia-economy-s... My understanding is that Russia's gold reserves are pretty tangible where the west has some pretty mysterious gold reserves.

I'm a US/UK citizen, I'm not arguing a pro Russia position here just talking realpolitik and geo politics.

Here's a Russian position which arguably gives away that gold and currency control is central to their positions http://thesaker.is/natos-internal-gold-war/

There are endless articles elsewhere questioning whether there really is any gold in Fort Knox etc because gold reserves are the king in the geopolitical chess games

Your replies are getting further and further away from your original definitive statement that Russia has the most gold reserves on the planet. It's all a bit strange.

Now that we're down to claims about the US lying about its gold reserves I'm afraid I have to check out.

Thanks for correcting me, I was wrong about the Statista chart I posted. My point was a broader one about the war for who would control future world reserve currencies, which appears to be between the US, China and Russia right now with Russia making a bit of a hail Mary pass https://www.suissegold.eu/en/posts/russias-massive-gold-accu...

This is a broad diatribe against monetary base expansion. The counterfactual for which, post crisis, we have in Europe. (And Depression-era America.)

I find it amusing when people automatically think that an increase in the money supply must result in inflation.

There is this inherent contradiction that people are angry that the money supply grows because they save, while themselves demanding high interest rates like 5% to let their money compound over time.

If you limit the money supply and demand high interest, that interest must circulate from lender back to the borrower. The money supply is $100. I lend out $100 and demand $105 back. The borrower pays me the full $100 back. Where does he get the $5 to pay interest? The easy answer is that I spend $5 of the money he paid to me. He then has $5 and pays off the entire loan.

What if I lend out the $5 to him instead? The money supply rose by $5. Letting money compound over time by reinvesting/lending the interest will let the money supply grow exponentially and in principle there is nothing wrong with that, if I, the lender, eventually spend off all the interest income I earned because then the whole thing settles and all debt including interest is gone.

Now, there is a problem here. Why doesn't that spending phase set in? Why does the money supply keep growing until the system collapses? Because of an artificial interest rate floor of 0% on cash. The saver has the option of refusing to lend out his money or spend it and wait until an inevitable recession sets.

During deflation, the value of money goes up. This is terrible for debt contracts. If you rented a Prius 2010 knowing you have to return Prius in the same condition but instead you return a 2020 Prius you would expect the rental company to compensate you for returning the car in an even better condition.

With debt it doesn't work that way, since you can just hold cash with 0% interest. Imagine if the car dealer had a <current_year> Prius that automatically upgrades to the latest year. You are expected to pay interest on top and bring a 2022 Prius because the dealership could just let the Prius sit in a garage and go up in value.

This is because of the inherent contradiction of being able to own a store of value. A store of value can only ever be a contract between two parties. The mythical self upgrading Prius doesn't exist in the real world. Someone has to promise to manufacture the 2020 Prius in exchange for you giving him the 2010 Prius. Deflation on a fixed debt contract is the equivalent of demanding a 2022 Prius when a 2020 Prius was agreed upon. The borrower never promised a 2022 Prius so it is only natural that he ends up defaulting through no fault of his own.

> There is this inherent contradiction that people are angry that the money supply grows because they save, while themselves demanding high interest rates like 5% to let their money compound over time.

When's the last time a high yield savings account made 5%? Or even matched inflation?

People are angry that they are punished by thr fed for trying to save money for a rainy day.

> People are angry that they are punished by thr fed for trying to save money for a rainy day

Rainy day funds should approximately track inflation. There are plenty of assets that have been good havens over the past decade. It’s odd to expect real gains on a rainy day fund.

> I find it amusing when people automatically think that an increase in the money supply must result in inflation.

Because that is what happens with other countries. The only reason US gets a free pass is because the dollar is a global currency which is sought by everyone.

Your example is a good example of the Motte and Bailey fallacy. Yes, if he uses that $100 to create something worth more than $5, he wins, you wins, the community wins. That's the motte. But the vast majority of loans are not that type. The vast majority of loans are fighting over zero-sum resources. Think buying land. That's the bailey.

When the money supply increases in that way, while it does not immediately create inflation, as the new money will be stored in investments and those investments rising in value are not considered inflation, as soon as the down-turn occurs, that money, being liquid, becomes inflation.

So when you create money through artificially low interest rates that goes to rent-seeking, you are creating inevitable inflation in the future.

Criticizing people for being thankful that their government used taxpayer funds to save failed private businesses and worse prop up bubbles is not a broad diatribe against monetary base expansion.

Though generally I don’t think it’s for a private entity such as the Federal Reserve to be given taxpayer money and have the power to increase the money supply, it makes a private bank a de facto 4th branch of government with powers to coin money reserved by the Constitution to the Government by the people for the people.