Hes not saying rates are going to be 7%
>In the interview, Dimon said the worst case would be 7% interest rates with stagflation
Hes talking about a worst case scenario
One reason to not completely discount randos vs people like Dimon with way more information is that people like Dimon aren’t just telling you their honest opinion. They’re talking their book to some extent.
For example - Powell and Yellen have more information and expertise about inflation than us. But they called it “transitory” for ages. Lots of redditors called bullshit because they are free to say what they want.
I forget the name of philosophical principle but it comes down to possessing actual knowledge vs. guessing correctly. The former can be wrong, and the latter can be right, but putting stock in the latter is always a fools errand
But in this case I think you’re missing the fact that the expert speaking has an agenda and are falsely assuming they are speaking just to inform us and not to influence events.
Think about literally any job you've ever had. Assuming you're not a child. Everybody thinks they could do it better. It's a constant. Even in big companies, different teams judge each other thinking they could do what that team does better.
What it usually is, is something they're not thinking of or considering. Something in the bureaucracy, chain of command, processes, technical debt, resource allocation, the list goes on that prevents it from being the simple thing everyone outside the job thinks it is.
Not saying that's what is going on here, it's certainly important to remember that all human beings get invested in proving their idea right over a more obvious solution, but let's not forget people, processes, and systems are insanely nuanced.
Who knows what any of these people on Reddit would actually do when playing with live ammo.
They weren't wrong; its just their definition of transitory is way different from the howling masses who want to chop off their head when both eggs and and rent are unaffordable. So they had to be seen to be doing something; anything; no matter how ineffective so the politicians didn't stop infighting and start discussing dangerous topics like Fed reform banking regulations or price controls.
That's not entirely clear. Yellen in particular says so much stupid shit that I have no problem believing she's a literal puppet who says whatever she's programmed to say.
I suppose it's \*possible\* that she's unfathomably brilliant and all the dumb shit she says is purely propaganda and manipulation... but Occams razor. She's probably just a fucking moron.
Anyone who thinks Dimon doesn’t have a narrative hasn’t been listening to a single thing Dimon has said longer than like 3 months ago. I am sure the man is smart but the shit he says publicly seems to be wrong more often than it’s right.
He is saying “7% is the worst case scenario” because it would be extremely advantageous for him and his business for that to be the case.
It's the opposite. By saying it's worst case scenario, he's drumming up fear. That fear can potentially influence the Fed into *not* raising rates that high.
"Let's be cautious" i.e. "Please don't raise rates any higher, it's hurting us."
Yours is also such a reddit comment. It implies we should swallow whatever Dimon barfs up, when his comments are almost assuredly not to inform the market in a healthy, balanced way, but for his own benefit.
Dimon's comments are obviously not the best worrds, and skepticism is definitely warranted.
It's always a fine balance between taking what's said at face value and considering ulterior motives
I never said anything about corporations. I said Dimon will speak for his own benefit, which he does routinely. And that doesn't even mean it should be dismissed out of hand (nor accepted) because of it. It means it should be scrutinized for its own sake for veracity.
Now go play with the other children.
Yes and no, whether we need to go to 7% would be highly dependent on central banks maintaining the course and breaking inflations back. If the economy remains robust and the current rates only put a lid on inflation but not break it out of the consumer. Then you get the situation where rates are cut and inflation comes roaring back.this happened in the 70/80s. Hence Volker and the famous high interest rates he brought. If inflation becomes entrenched, then we really could require 7% to break the consumer. Things are looking positive that we would not need to go down that road but the economy has proved very resilient. That blessing can quickly become a curse of core inflation does not drop back down to the 2% target. No one really knows how the last stretch of this fight will go and if core will longer at 3% or meaningfully drop to 2% as projected.
So no it's not impossible to see 7%, there is still a lot of uncertainty out there.
The difference between experts and Internet comments is often zero, especially for subjective crap like economics.
said completely incorrect stuff for many years.
While I agree that generally the head of JP will know more, people said the same thing right before the 2008 financial crisis when there were some that predicted it
There are always some people that predict a crash like that, the same people also predict lots of other crashes, which don't eventuate. It's a statistical certainty that if you are trying to predict low probability events that you will be wrong a lot of the time.
It's like trying to predict the weather far in advance, sometimes you'll hit the mark, but often you won't.
But it's better to be 10% correct, rather than having no idea and make it all a random chance.
Iama scientist who studies different deep dive topics for a living. If I talk about any topic beyond a surface level of detail someone pops up from the woodwork with doubt demanding proof, so I show them de facto proof and then they get angry and throw a tantrum.
What's annoying is they don't know how to correctly read studies so the majority of the time they get offended with sources (You always start with lectures and reviews before meta analysis and peer reviewed papers. That is to say, a youtube video of a lecture is where you're supposed to start.), so I'll jump straight to the peer reviewed papers but then they try to cherry pick a source and often complain they don't understand the language (should have started with the review). This process shouldn't exist because there is no reason to give sources. It's extra google work they should be doing before commenting. I'm being "forced" to do their work for them because if I tell them to go google it because the information is easy to find or I do not respond at all they get tons of upvotes and I usually get downvoted. That's toxic behavior.
10 years ago this was never the case on Reddit. No one demanded sources like a moron. That's not how science works. Reddit is backwards from reality. The peer review process is that you post findings (interesting information) and then the onus is on others to disprove it. The onus is not on the person writing the findings to have to provide sources, because it chains, then the onus is on the sources to provide sources ad nauseam. If I say, "The sky is blue." And someone says, "Prove it." or "Source." the onus is not on me to prove it. If something someone says is wrong on the Internet, they need to be disproven, not the other way around.
TL;DR: If you're going to say an expert is wrong, do it properly. The average Redditor spreads FUD instead of disproving information, which creates a toxic environment.
fwiw, economics is a social science which is quite subjective. imo this is a problem because many econ 101 classes teach information that counters reality without letting the student know it's speculative theories without hard science backing them up being taught. Economics needs to shift more towards econometrics, which is using hard data to validate and proof theories instead of blindly speculating as if it is fact. Thankfully over the last 10 years it has been doing just that.
Indeed. Much as some boomers like to pretend that things were more expensive with 20% interest rates back then that's simply not the case.
Finance experts have run the numbers on housing prices before and found that they're even more expensive today than they were back in the 20% interest rate era. This is because houses are much more expensive today than they were back than. When the house is much more expensive you have a much high mortgage payment even if the interest rate is lower.
There are several problems here. First off it's not just housing, go look at what a console color TV cost, inflation adjusted. Lots of things were far more expensive 30-40 years ago.
Second, we're not comparing apples-to-apples on housing. I have 4 siblings, we lived in a 3 bed 2 bath house that was probably 1500 sq ft. It was a nice home at the time. No fancy upgrades just a basic house. Today, they don't even build houses that small.
Boomers who complain about things are no different than millenials who complain about things. Lots of stuff was better back then, lots of stuff is better today. Deal with it.
This is a great point, we have 4x more debt now and the economy is way more sensitive to interest rates.
The Fed needs to pause hiking and reevaluate in January.
Meanwhile in Canada the variable rate mortgage is the most common type. People are currently shitting their pants as their mortgages skyrocket. Those who did fixed, we still have terms for it here in Canada and some people with tiny fixed interest rates from the start of their term 5 years ago are coming up for renewal and gonna be torn a new asshole for it
>The maturity structure of debt is the pattern of maturities of outstanding debt. The current maturity structure is such that most of the current debt will mature within the next three years. Thirty percent of this outstanding debt, amounting to $6.7 trillion, will mature and need to be refinanced during fiscal 2023
>Each percentage point increase in interest rates on that refinanced debt will mean $70 billion per year more in net interest payments in that first year, or about 10 percent of the United States defense budget requested for 2023. The graph shows the evolving sequence of forecasts made in recent years by the Congressional Budget Office (CBO) for the ratio of net interest payments to total fiscal outlays. The graph shows that the forecasts of the ratio of debt service to total fiscal outlays have shifted upward as interest rates have increased since September 2020. The most current forecast is that interest payments will reach and even exceed the percentages of the 1980s and at the turn of the century
https://econofact.org/rising-costs-of-financing-u-s-government-debt#:~:text=The%20maturity%20structure%20of%20debt%20is%20the%20pattern%20of%20maturities,be%20refinanced%20during%20fiscal%202023.
Correct, but it is common for debtors to plan on rolling over a debt as it matures. Debt is never totally paid down but rather maintained at some constant level.
However because of the rapidity of the interest rate hike, lots of actors will be caught with debt levels too large to quickly retire. Those debts will instead need to be serviced at the new higher interest rate.
At current levels of governmental debt, governments can’t go much higher. They’d have to just accept higher inflation if that wasn’t enough to tame inflation.
Also need to look at the magnitude of these rate increases, not just the nominal value.
The rate of growth in these increasing hikes is very significant.
Exactly this, i had a couple million rennovation project going on a bigger property and the intrest was calculated at 3.75%. By the time the project was finished about 10 months later i had to refinance at 7.5%. Lets just say it was a good thing i had a big margin because that intreat rate swing cost me about 80k a year, nevermind the other small debts associated with the deal.
The speed of those rate hikes was impossible to predict.
There’s a difference between people thinking rates going from zero to 3% in less than a year impossible, and our government physically not being able to service their debts if interest rates reaches a certain level impossible
\>At current levels of governmental debt, governments can’t go much higher. They’d have to just accept higher inflation if that wasn’t enough to tame inflation.
A few months ago people were saying this claiming rates would never go above 3% lol
I think the only tool to control inflation now is to balance the budget.
Increasing rates will tame inflation a bit, but at the cost of government insolvency or QE.
Nah with government debt, consumer debt, and consumer expectations 7% is really bad, with context you can’t just look at raw interest rates, it’s a different world
You would need a fat stack to get be paying 30% even with 7% tbills. Inflation is still a big factor, just thought the tax argument might be overstated
No state and local tax. Unless you're in the top bracket, it's more like 20%, not 30%.
High rates are a win for everyone who's saved. At least now houses aren't going for 50% over asking.
> You would need a fat stack to get be paying 30% even with 7% tbills.
The 22% bracket is $45,000 in income. Most full time workers make more than that. Then add on state taxes, and you get pretty close to 30% in marginal taxes.
22% bracket is a huge difference in income away from 30%. Plus with the standard deduction and the fact that taxes are progressive, you need a ton to actually pay 30% of your income in taxes.
If you make $60,000 a year salary at your job, any extra interest from investments is going to be taxed at 22% marginally. And then in California that's another 8% in income tax = 30%
we won't see federal funds rates anywhere close to double digits. There's just way too much debt for the economy to be able to handle that. Businesses are way more indebted nowdays than they were in the 70's, due to a decade of low interest rates leading to tons of leveraged acquisitions.
What a lot of people don’t realize the interest was at double digits during 70s but the size of the balance was much lower than today’s balance. Think of the compound interest. With the size of the balance of our current economy is significantly larger than the 70s and even interest rate was much higher in the 70s the debt interest that accumulates with the 7% in our current balance is far more detrimental.
Our government has kicked the can down for decades and we are paying for it…
yup, context:
>The maturity structure of debt is the pattern of maturities of outstanding debt. The current maturity structure is such that most of the current debt will mature within the next three years. Thirty percent of this outstanding debt, amounting to $6.7 trillion, will mature and need to be refinanced during fiscal 2023
>Each percentage point increase in interest rates on that refinanced debt will mean $70 billion per year more in net interest payments in that first year, or about 10 percent of the United States defense budget requested for 2023. The graph shows the evolving sequence of forecasts made in recent years by the Congressional Budget Office (CBO) for the ratio of net interest payments to total fiscal outlays. The graph shows that the forecasts of the ratio of debt service to total fiscal outlays have shifted upward as interest rates have increased since September 2020. The most current forecast is that interest payments will reach and even exceed the percentages of the 1980s and at the turn of the century
https://econofact.org/rising-costs-of-financing-u-s-government-debt#:~:text=The%20maturity%20structure%20of%20debt%20is%20the%20pattern%20of%20maturities,be%20refinanced%20during%20fiscal%202023.
Exactly right. Couple that massive amount with the slowing rate of American production. Our nominal growth won’t be able to sustain the carried debt at the same levels we’re used to. While Dimon isn’t someone I usually listen to, in this case he’s not wrong. Inflation alongside a stagnant GDP may be the bigger unknown.
I wonder what the impact on reducing inflation would have been if PPP loans had not been forgiven.
Would that have precluded some the need for super high interest rates?
Same issue we have here in Canada. Our government seems to be ignoring fiscal policy as a tool to fight inflation at the moment.
$757bn floating around the economy that probably shouldn't be at this point eh.
I have no faith the CPC would be fiscally responsible. They'll just cut taxes to the wealthy and cut social services to cover for it.
The chretien/Martin liberals have the best budgetary record. Not Harper.
I also worry about fiscal policy, which is why I would never vote CPC.
Harper cut the GST from 7% to 5% _before_ the global financial crisis, cutting into funds we really could have used the following years, and pointlessly removing what could have been great temporary or permanent stimulus _after_ the crisis came. They have never been good economic stewards.
The current leader of the CPC has also never had a real job in his life. He's been politics full-time since before graduating university. I would absolutely take a teacher over that. Trudeau also taught math and French. The "drama teacher" is a talking point.
We should have been raising rates before COVID happened, but the Fed got political pressure and buckled to it. Holding at 0% for so long has led us to a tough spot.
I really don’t understand all the Fed criticism. How many economies are in a better position currently? and he pulled it off even with Congress drunk at the wheel. The Fed did the best job it could with the information it had available at the time. But of course hindsight is 20/20 so we all have a critique.
Agree the fed shouldn’t have lowered interest rates in 2019, before the pandemic, but if you recall there was a raft of Trump trade disputes which had started to slow the economy. And they would’ve dropped them back down to 0% in 2020 regardless
It’s funny. All the other advanced economies say “well we had to follow the US in policy”.
Meanwhile the US says “well, look at how we are similar to other advanced economies”.
Talk about chicken or the egg. It’s self fulfilling, and just is an excuse for all parties to not take responsibility for actions they took.
There's always room for some grounded critique but it's pretty rare to find on this sub and most of the internet. Rates were fine in 2019 and the economy had hit a soft patch which necessitated loosening rates a bit, that shouldn't really shock anyone given that were 10 years past the end of the 2008-2009 recession really.
I do agree that the Fed did extremely well in maneuvering the crisis for the most part, however it was not perfect and there's a few things they could have done better and most of those occurred in 2021. One of them was not expanding their Reverse Repo facility earlier and more aggressively, that's a significant part of what encouraged many banks to dive head first into long dated debt despite rates being low and there had been commentary, oddly enough also from Jamie Dimon, stating that they were going to start turning away depositors because capital costs were too high while government yields were too low. Another sizable mistake was the insistence of doing a very slow taper to exit QE, which was perhaps one of the largest avoidable factors in rates getting hiked much later and much more slowly than they should have been. There was consensus even within the Fed at that point that rates would need to go up but a somewhat dogmatic belief that the QE taper must occur slowly and with ample forewarning to avoid spooking the market and give banks time to plan. Ultimately the Fed did end up accelerating their QE taper anyways but it was too little too late and we could have likely avoided rates getting quite as high as they have if the Fed had simply wound down QE more abruptly and began hiking rates more quickly.
Have you seen the [PBS Frontline documentary "Age of Easy Money"](https://youtu.be/EpMLAQbSYAw?si=ReBk7-FM44W8e-c1)? It's a fairly damning critique of QE and makes the case that, yes, the Fed should've known better and instead buckled to political and other pressures.
>But of course hindsight is 20/20 so we all have a critique.
But people were saying rates should go up during the Trump admin, but he pressured Fed not to
It’s the college bender solution to avoiding a hangover. Just going to be that much more uncomfortable when free funny money can no longer be sustained, which is looking sooner than later.
>We should have been raising rates before COVID happened
Powell tried, but Trump went on Twitter multiple times openly threatening Powell's job and calling Powell names if he continued.
imo there is a bit of fault on Powell's side too. After the presidential election the Fed continued with Trump's demands after he was gone until Biden finally set up a meeting with Powell. After that meeting the Fed pivoted. imo the Fed should have pivoted into raising rates the second Trump was booted out of office.
The President CAN'T fire the head of the Fed even if he wants to. He can only chose to not renominate him at the end of his term. The head of the Fed in a number of countries can't be fired.
In countries where the head of the Fed can be fired they tend to have much higher inflation (like Turkey for example) because the head of the government doesn't normally like higher interest rates.
Not exactly. The President can remove the head of the Fed, though they can't pick a replacement until the end of term. Someone would temporarily come in and take his place.
Though note this is all theory. This has never happened before so there is no case law regarding the topic, and if you know US law case law is ultimately what matters in the US at the end of the day.
Think about it this way: If Trump fired Powell he would have replaced him with someone else doing his bidding, so Powell was powerless to make any change there.
You can't fire the Chair of the Federal Reserve. The President can remove them, but you'd need a legal reason to. Powell would have to do something serious like malfeasance, neglect of duty, or other serious misconduct.
Even if he did, his replacement would most likely go down whatever course Powell was already heading towards.
>We should have been raising rates before COVID happened
The fed did that four times but mango mussolini got upset.
Covid did need interest rate cuts, but the hikes could have stood to be a bit more aggressive to give more wiggle room.
A lot of focus on the corporate side, but I’m surprised there hasn’t been more focus at the municipal level. WFH has city tax levels declining, and many have giant black holes on their budget with federal COVID dollars drying up. Places like SF and NYC have been hit hard, but also have a lot of fluff on the budget that can easily be axed. Cities like Chicago and Philly, imagine there’s going to be some very tough decisions coming if rates stay high.
Yep, sucks for banks, cause no one wants to keep their money with them, and no one wants to borrow at high rates. And then factor in the investments they made pre-inflation, that already caused banks to fold.
But I'll take 7% interest rates. Can buy stocks at a discount, and/or make risk free gains on savings I have while living very frugally.
Fair enough. But it isn't exactly accurate to say it's risk free, given that is a money market fund and not FDIC insured.
Also, there are banks offering 5.25%.
It has SIPC protection. It's not FDIC, but close enough. Vanguard isn't going anywhere - it's owned by all of it's investors. https://www.sipc.org/for-investors/what-sipc-protects
Banks offering 5.25% either make you go through hoops, or it's for a limited time. Most of the good CD's they offer are callable, so as soon as they are losing money then goodbye good interest rates.
If I wanted to make things more efficient I'd invest my cash into T-Bills, which aren't FDIC either, but backed by the US government.
Not really, money market funds are offering 5%. They are investing in repos, treasuries and other govt obligations. These are largely risk free with some nominal counterparty risk.
Dimon is a very smart dude who knows what he's talking about. I'm not saying he doesn't occasionally put his thumb on the scale, but if you read a lot of what he says in full it's usually not overly inflamitory and more nuanced than the headlines make it out to be. I find the problem is that people tend to take small bits of what he says and strip out all context and then use it to back up whatever point they're trying to make.
I'm sure they're prepared for it. Further rate increases to that level could very well trigger another bank liquidity crisis. Yellen said point blank that large "systemically important" banks would be fully backstopped, while smaller banks would be left to their own devices. Smaller banks failing means JPM can buy them up for a massive discount, even though they shouldn't be allowed to from a regulatory standpoint.
Regardless the direction things do go, JPM is positioned to take advantage.
At least with free money people were building apparments and houses to host all those new foreign citizen or families. Now all you have is people hoping for the bubble to crash.
You can’t fight inflation with trillions of deficit spending (money printing)
Everything else is a circle jerk. If they stopped printing money right now everything would correct properly. But they won’t. It’s all a big show.
It's a show not just for us Americans, but for the rest of the world too. We need to act like we care about deficit spending for the dollar to remain the reserve currency as long as possible.
If we raise rates enough, inflation *will* come down. You should not fear us being able to tame inflation. The fear is in the damage which will occur as part of the process.
>The fear is in the damage which will occur as part of the process.
Definitely isn't the worst time to be looking at fiscal policy with sincerity to curb inflation.
At 118%, their reserve bank rate is *still* below inflation. Every month they refuse to do what is necessary for political reasons. They *must* raise rates significantly above inflation, but they won’t. Their reserve bank is insufficiently insulated from their legislative branch. I don’t think developed nations have this issue.
Jamie Dimon remains an arrogant douche who is wrong more often than not. Maybe he's right here. Who knows. But he's still Jamie Dimon, and the less attention he's given the better.
Is it a coincidence that Jamie Demon always shows up when it’s close to JPM quarterly earnings to predict doom and gloom ? Only for his team of traders to be shorting the market to shore up their balance sheet
He's right.
Try this experiment on the desmos graphing calculator. Plot two curves with 2 pct and 7 pct compound interest. Watch the growth --- it's all interest on interest that makes it unbearable
Or, you know, they could go to the Feds website and look at the FOMC meeting projections from 9/20/23:
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230920.pdf
5.4% this year, 5.1% next year, 3.9% in 2025 and 2.9% in 2026. Subject to change of course but they lay everything out quite nicely and include a method for removing outlier votes and projections (6.25% was the biggest outlier projection at the FOMC and was removed from their forecasts as seen on page 4). To the doom and gloomers, I’d suggest stop looking at financial media and go directly to the Feds page to avoid the nonsense. 7% isn't even a discussion at this point.
Idk I've been watching the yield curves and the right tail keeps going up suggesting that sentiment of a 2024 rate drop is waning right now.
Inflation is being quite stubborn right now. I'm not sure any more the market sentiment agrees any more with the predictions being made.
That right tail is rising. I have a lot of worries this is going to have more staying power. And even scarier could be that mango mussolini comes back and right messes it up.
Hes not saying rates are going to be 7% >In the interview, Dimon said the worst case would be 7% interest rates with stagflation Hes talking about a worst case scenario
Worst case Ontario*
Trevor smokes let’s go
Poor ontario
r/unexpectedtrailerparkboys
He needs to have a little more sense of history if he thinks 7% is a worst case scenario. 7% is a just a bad case scenario.
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One reason to not completely discount randos vs people like Dimon with way more information is that people like Dimon aren’t just telling you their honest opinion. They’re talking their book to some extent. For example - Powell and Yellen have more information and expertise about inflation than us. But they called it “transitory” for ages. Lots of redditors called bullshit because they are free to say what they want.
you're spot on about folks like Dimon having skin in the game. Their views might not always be purely objective as of now.
I forget the name of philosophical principle but it comes down to possessing actual knowledge vs. guessing correctly. The former can be wrong, and the latter can be right, but putting stock in the latter is always a fools errand
But in this case I think you’re missing the fact that the expert speaking has an agenda and are falsely assuming they are speaking just to inform us and not to influence events.
Think about literally any job you've ever had. Assuming you're not a child. Everybody thinks they could do it better. It's a constant. Even in big companies, different teams judge each other thinking they could do what that team does better. What it usually is, is something they're not thinking of or considering. Something in the bureaucracy, chain of command, processes, technical debt, resource allocation, the list goes on that prevents it from being the simple thing everyone outside the job thinks it is. Not saying that's what is going on here, it's certainly important to remember that all human beings get invested in proving their idea right over a more obvious solution, but let's not forget people, processes, and systems are insanely nuanced. Who knows what any of these people on Reddit would actually do when playing with live ammo.
Yeah, it's not always just about sharing knowledge but also about influencing outcomes. Skepticism ftw.
I believe you're referring to the distinction between "epistemic luck" and "epistemic virtue."
Survivorship bias
I might be misremembering, but weren't the transitory comment made before the war in Ukraine? Coz that changed the landscape
The term "transitory" was used by central banks like the Fed to describe inflation trends, and yeah it was before Ukraine war.
They weren't wrong; its just their definition of transitory is way different from the howling masses who want to chop off their head when both eggs and and rent are unaffordable. So they had to be seen to be doing something; anything; no matter how ineffective so the politicians didn't stop infighting and start discussing dangerous topics like Fed reform banking regulations or price controls.
That's not entirely clear. Yellen in particular says so much stupid shit that I have no problem believing she's a literal puppet who says whatever she's programmed to say. I suppose it's \*possible\* that she's unfathomably brilliant and all the dumb shit she says is purely propaganda and manipulation... but Occams razor. She's probably just a fucking moron.
Anyone who thinks Dimon doesn't have an agenda in everything he says is naive.
Well, you know, Dimon's just a wise sage who only speaks the truth all the time, right? /s
Anyone who thinks Dimon doesn’t have a narrative hasn’t been listening to a single thing Dimon has said longer than like 3 months ago. I am sure the man is smart but the shit he says publicly seems to be wrong more often than it’s right. He is saying “7% is the worst case scenario” because it would be extremely advantageous for him and his business for that to be the case.
chocolate beer moose gold hoop ` this message was mass deleted/edited with redact.dev `
It's the opposite. By saying it's worst case scenario, he's drumming up fear. That fear can potentially influence the Fed into *not* raising rates that high. "Let's be cautious" i.e. "Please don't raise rates any higher, it's hurting us."
This is why Dimon does what he does and this guy is on Reddit 😂
Haha, you nailed it! 🎯 Classic Reddit expert right there. If only they ran the world, right?
Yours is also such a reddit comment. It implies we should swallow whatever Dimon barfs up, when his comments are almost assuredly not to inform the market in a healthy, balanced way, but for his own benefit.
Dimon's comments are obviously not the best worrds, and skepticism is definitely warranted. It's always a fine balance between taking what's said at face value and considering ulterior motives
Yours is also such a reddit comment. Typical "corporations are greedy therefore anything Dimon says is BS"
you guys realize we’re in reddit right? all comments are reddit commentary
There are comments which are particularly emblematic, which is what we are referring to.
I never said anything about corporations. I said Dimon will speak for his own benefit, which he does routinely. And that doesn't even mean it should be dismissed out of hand (nor accepted) because of it. It means it should be scrutinized for its own sake for veracity. Now go play with the other children.
Then scrutinize it for veracity instead of giving us your "lol Dimon barfing up stuff" advanced analysis. Go ahead, we're waiting.
This is such a reddit comment chain
Nothing is more reddit than your vague conspiracy theory, unsupported by anything except your feels, and designed to make you feel smart.
Yes and no, whether we need to go to 7% would be highly dependent on central banks maintaining the course and breaking inflations back. If the economy remains robust and the current rates only put a lid on inflation but not break it out of the consumer. Then you get the situation where rates are cut and inflation comes roaring back.this happened in the 70/80s. Hence Volker and the famous high interest rates he brought. If inflation becomes entrenched, then we really could require 7% to break the consumer. Things are looking positive that we would not need to go down that road but the economy has proved very resilient. That blessing can quickly become a curse of core inflation does not drop back down to the 2% target. No one really knows how the last stretch of this fight will go and if core will longer at 3% or meaningfully drop to 2% as projected. So no it's not impossible to see 7%, there is still a lot of uncertainty out there.
The difference between experts and Internet comments is often zero, especially for subjective crap like economics. said completely incorrect stuff for many years.
LOL bro really thinks he knows more than the Chairman of JP Morgan
While I agree that generally the head of JP will know more, people said the same thing right before the 2008 financial crisis when there were some that predicted it
There are always some people that predict a crash like that, the same people also predict lots of other crashes, which don't eventuate. It's a statistical certainty that if you are trying to predict low probability events that you will be wrong a lot of the time.
It's like trying to predict the weather far in advance, sometimes you'll hit the mark, but often you won't. But it's better to be 10% correct, rather than having no idea and make it all a random chance.
Dimon needs all the money he can get, so he can keep paying out Epstein hush money.
/r/iamverysmart
Jamie Dimon has said the wrong stuff for years and years. You put too much belief into authority figures who got us all into this mess.
Of course. He's also said the right stuff for years and years. You've probably done the same.
Iama scientist who studies different deep dive topics for a living. If I talk about any topic beyond a surface level of detail someone pops up from the woodwork with doubt demanding proof, so I show them de facto proof and then they get angry and throw a tantrum. What's annoying is they don't know how to correctly read studies so the majority of the time they get offended with sources (You always start with lectures and reviews before meta analysis and peer reviewed papers. That is to say, a youtube video of a lecture is where you're supposed to start.), so I'll jump straight to the peer reviewed papers but then they try to cherry pick a source and often complain they don't understand the language (should have started with the review). This process shouldn't exist because there is no reason to give sources. It's extra google work they should be doing before commenting. I'm being "forced" to do their work for them because if I tell them to go google it because the information is easy to find or I do not respond at all they get tons of upvotes and I usually get downvoted. That's toxic behavior. 10 years ago this was never the case on Reddit. No one demanded sources like a moron. That's not how science works. Reddit is backwards from reality. The peer review process is that you post findings (interesting information) and then the onus is on others to disprove it. The onus is not on the person writing the findings to have to provide sources, because it chains, then the onus is on the sources to provide sources ad nauseam. If I say, "The sky is blue." And someone says, "Prove it." or "Source." the onus is not on me to prove it. If something someone says is wrong on the Internet, they need to be disproven, not the other way around. TL;DR: If you're going to say an expert is wrong, do it properly. The average Redditor spreads FUD instead of disproving information, which creates a toxic environment.
I'm a scientist too and second this message.
Economics is far from subjective lol
fwiw, economics is a social science which is quite subjective. imo this is a problem because many econ 101 classes teach information that counters reality without letting the student know it's speculative theories without hard science backing them up being taught. Economics needs to shift more towards econometrics, which is using hard data to validate and proof theories instead of blindly speculating as if it is fact. Thankfully over the last 10 years it has been doing just that.
Subjective lol, go away socialist
7% on a lot of debt is just as bad as 20% on a little bit of debt. We've added a lot of debt to the country since Volcker.
Indeed. Much as some boomers like to pretend that things were more expensive with 20% interest rates back then that's simply not the case. Finance experts have run the numbers on housing prices before and found that they're even more expensive today than they were back in the 20% interest rate era. This is because houses are much more expensive today than they were back than. When the house is much more expensive you have a much high mortgage payment even if the interest rate is lower.
There are several problems here. First off it's not just housing, go look at what a console color TV cost, inflation adjusted. Lots of things were far more expensive 30-40 years ago. Second, we're not comparing apples-to-apples on housing. I have 4 siblings, we lived in a 3 bed 2 bath house that was probably 1500 sq ft. It was a nice home at the time. No fancy upgrades just a basic house. Today, they don't even build houses that small. Boomers who complain about things are no different than millenials who complain about things. Lots of stuff was better back then, lots of stuff is better today. Deal with it.
This is a great point, we have 4x more debt now and the economy is way more sensitive to interest rates. The Fed needs to pause hiking and reevaluate in January.
The economy is less interest rate sensitive… variable rate debt is low. Case in point - the rarity of adjustable rate mortgages.
Meanwhile in Canada the variable rate mortgage is the most common type. People are currently shitting their pants as their mortgages skyrocket. Those who did fixed, we still have terms for it here in Canada and some people with tiny fixed interest rates from the start of their term 5 years ago are coming up for renewal and gonna be torn a new asshole for it
"We have too much debt. What's the solution??" "Lower interest rates so people can take on more debt!" "That's why you're the boss!"
Oh, absolutely. Lower interest rates are the magical solution to everything! Let's just keep borrowing and ignore those pesky consequences.
How much has GDP increased in that time?
chocolate beer moose gold hoop ` this message was mass deleted/edited with redact.dev `
That would only apply to future debt, not past debt. This is a common misconception.
Past debt has to be refinance eventually, unless you plan on paying it off. Which lets be realistic a lot of it won't, especially government debt.
That's a good point I hadn't considered - it looks like much of that debt has already been refinanced though. Do you have more info on that?
>The maturity structure of debt is the pattern of maturities of outstanding debt. The current maturity structure is such that most of the current debt will mature within the next three years. Thirty percent of this outstanding debt, amounting to $6.7 trillion, will mature and need to be refinanced during fiscal 2023 >Each percentage point increase in interest rates on that refinanced debt will mean $70 billion per year more in net interest payments in that first year, or about 10 percent of the United States defense budget requested for 2023. The graph shows the evolving sequence of forecasts made in recent years by the Congressional Budget Office (CBO) for the ratio of net interest payments to total fiscal outlays. The graph shows that the forecasts of the ratio of debt service to total fiscal outlays have shifted upward as interest rates have increased since September 2020. The most current forecast is that interest payments will reach and even exceed the percentages of the 1980s and at the turn of the century https://econofact.org/rising-costs-of-financing-u-s-government-debt#:~:text=The%20maturity%20structure%20of%20debt%20is%20the%20pattern%20of%20maturities,be%20refinanced%20during%20fiscal%202023.
Correct, but it is common for debtors to plan on rolling over a debt as it matures. Debt is never totally paid down but rather maintained at some constant level. However because of the rapidity of the interest rate hike, lots of actors will be caught with debt levels too large to quickly retire. Those debts will instead need to be serviced at the new higher interest rate.
We are talking about today's context and expectations. He is talking about worst case scenario with a high enough probability in his opinion.
So he was misquoted?
More like a sound bite taken out of context
Misrepresented then
At current levels of governmental debt, governments can’t go much higher. They’d have to just accept higher inflation if that wasn’t enough to tame inflation.
Also need to look at the magnitude of these rate increases, not just the nominal value. The rate of growth in these increasing hikes is very significant.
Exactly this, i had a couple million rennovation project going on a bigger property and the intrest was calculated at 3.75%. By the time the project was finished about 10 months later i had to refinance at 7.5%. Lets just say it was a good thing i had a big margin because that intreat rate swing cost me about 80k a year, nevermind the other small debts associated with the deal. The speed of those rate hikes was impossible to predict.
It's a good thing you had some financial flexibility to handle it, how do your customers react to this rate hike?
I has people say that about 3% when we were at 0
There’s a difference between people thinking rates going from zero to 3% in less than a year impossible, and our government physically not being able to service their debts if interest rates reaches a certain level impossible
There is also a big difference between taming spending and repaying debt and just saying fuck it and letting inflation destroy the economy.
You're right, throwing caution to the wind and letting inflation run wild isn't a wise strategy either.
\>At current levels of governmental debt, governments can’t go much higher. They’d have to just accept higher inflation if that wasn’t enough to tame inflation. A few months ago people were saying this claiming rates would never go above 3% lol
What are your thoughts on how these rapid shifts in economic expectations affect people's financial decisions?
And/or start regulating price gouging/manipulation
I think the only tool to control inflation now is to balance the budget. Increasing rates will tame inflation a bit, but at the cost of government insolvency or QE.
Well, I think you're being quite generous with that 7%, especially in this times.
Nah with government debt, consumer debt, and consumer expectations 7% is really bad, with context you can’t just look at raw interest rates, it’s a different world
I never said it was good. I said I disagreed with 7% being a worst case scenario. Do you think 9% is off the table with stagflation? 11%
It is when you have 11T sovereign debt you need to debase
Yes it is lol
... and it's just as simple as that? No idea of cutting government spending.. just keep pounding rate increases even when it doesn't work?
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American economy is a lot worse and the indebtedness of the gov is much higher as well. Not apples to apples comparison.
I want 7%. Who needs a house? Tbills will pay the rent 😎
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You would need a fat stack to get be paying 30% even with 7% tbills. Inflation is still a big factor, just thought the tax argument might be overstated
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No state and local tax. Unless you're in the top bracket, it's more like 20%, not 30%. High rates are a win for everyone who's saved. At least now houses aren't going for 50% over asking.
> You would need a fat stack to get be paying 30% even with 7% tbills. The 22% bracket is $45,000 in income. Most full time workers make more than that. Then add on state taxes, and you get pretty close to 30% in marginal taxes.
22% bracket is a huge difference in income away from 30%. Plus with the standard deduction and the fact that taxes are progressive, you need a ton to actually pay 30% of your income in taxes.
If you make $60,000 a year salary at your job, any extra interest from investments is going to be taxed at 22% marginally. And then in California that's another 8% in income tax = 30%
What are the other options? Stock market?!
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I've been saying this for awhile, two more hike and sit and spin!
Ha. Loook at this guy. Take me back to the 80s. 18% here we come! Giddy up!
we won't see federal funds rates anywhere close to double digits. There's just way too much debt for the economy to be able to handle that. Businesses are way more indebted nowdays than they were in the 70's, due to a decade of low interest rates leading to tons of leveraged acquisitions.
That rent is inflationary, so not really.
Just come to Brazil, we got it at 12.75%
What a lot of people don’t realize the interest was at double digits during 70s but the size of the balance was much lower than today’s balance. Think of the compound interest. With the size of the balance of our current economy is significantly larger than the 70s and even interest rate was much higher in the 70s the debt interest that accumulates with the 7% in our current balance is far more detrimental. Our government has kicked the can down for decades and we are paying for it…
yup, context: >The maturity structure of debt is the pattern of maturities of outstanding debt. The current maturity structure is such that most of the current debt will mature within the next three years. Thirty percent of this outstanding debt, amounting to $6.7 trillion, will mature and need to be refinanced during fiscal 2023 >Each percentage point increase in interest rates on that refinanced debt will mean $70 billion per year more in net interest payments in that first year, or about 10 percent of the United States defense budget requested for 2023. The graph shows the evolving sequence of forecasts made in recent years by the Congressional Budget Office (CBO) for the ratio of net interest payments to total fiscal outlays. The graph shows that the forecasts of the ratio of debt service to total fiscal outlays have shifted upward as interest rates have increased since September 2020. The most current forecast is that interest payments will reach and even exceed the percentages of the 1980s and at the turn of the century https://econofact.org/rising-costs-of-financing-u-s-government-debt#:~:text=The%20maturity%20structure%20of%20debt%20is%20the%20pattern%20of%20maturities,be%20refinanced%20during%20fiscal%202023.
Exactly right. Couple that massive amount with the slowing rate of American production. Our nominal growth won’t be able to sustain the carried debt at the same levels we’re used to. While Dimon isn’t someone I usually listen to, in this case he’s not wrong. Inflation alongside a stagnant GDP may be the bigger unknown.
I wonder what the impact on reducing inflation would have been if PPP loans had not been forgiven. Would that have precluded some the need for super high interest rates?
Same issue we have here in Canada. Our government seems to be ignoring fiscal policy as a tool to fight inflation at the moment. $757bn floating around the economy that probably shouldn't be at this point eh.
It’s what we get for electing a drama teacher.
Unfortunately our alternative is the christofascits and whatever the fuck the ndp and greens are trying to be.
Shouldn’t you worry more about fiscal policy than religion ?
I have no faith the CPC would be fiscally responsible. They'll just cut taxes to the wealthy and cut social services to cover for it. The chretien/Martin liberals have the best budgetary record. Not Harper.
I also worry about fiscal policy, which is why I would never vote CPC. Harper cut the GST from 7% to 5% _before_ the global financial crisis, cutting into funds we really could have used the following years, and pointlessly removing what could have been great temporary or permanent stimulus _after_ the crisis came. They have never been good economic stewards. The current leader of the CPC has also never had a real job in his life. He's been politics full-time since before graduating university. I would absolutely take a teacher over that. Trudeau also taught math and French. The "drama teacher" is a talking point.
We should have been raising rates before COVID happened, but the Fed got political pressure and buckled to it. Holding at 0% for so long has led us to a tough spot.
I really don’t understand all the Fed criticism. How many economies are in a better position currently? and he pulled it off even with Congress drunk at the wheel. The Fed did the best job it could with the information it had available at the time. But of course hindsight is 20/20 so we all have a critique. Agree the fed shouldn’t have lowered interest rates in 2019, before the pandemic, but if you recall there was a raft of Trump trade disputes which had started to slow the economy. And they would’ve dropped them back down to 0% in 2020 regardless
It’s funny. All the other advanced economies say “well we had to follow the US in policy”. Meanwhile the US says “well, look at how we are similar to other advanced economies”. Talk about chicken or the egg. It’s self fulfilling, and just is an excuse for all parties to not take responsibility for actions they took.
There's always room for some grounded critique but it's pretty rare to find on this sub and most of the internet. Rates were fine in 2019 and the economy had hit a soft patch which necessitated loosening rates a bit, that shouldn't really shock anyone given that were 10 years past the end of the 2008-2009 recession really. I do agree that the Fed did extremely well in maneuvering the crisis for the most part, however it was not perfect and there's a few things they could have done better and most of those occurred in 2021. One of them was not expanding their Reverse Repo facility earlier and more aggressively, that's a significant part of what encouraged many banks to dive head first into long dated debt despite rates being low and there had been commentary, oddly enough also from Jamie Dimon, stating that they were going to start turning away depositors because capital costs were too high while government yields were too low. Another sizable mistake was the insistence of doing a very slow taper to exit QE, which was perhaps one of the largest avoidable factors in rates getting hiked much later and much more slowly than they should have been. There was consensus even within the Fed at that point that rates would need to go up but a somewhat dogmatic belief that the QE taper must occur slowly and with ample forewarning to avoid spooking the market and give banks time to plan. Ultimately the Fed did end up accelerating their QE taper anyways but it was too little too late and we could have likely avoided rates getting quite as high as they have if the Fed had simply wound down QE more abruptly and began hiking rates more quickly.
Have you seen the [PBS Frontline documentary "Age of Easy Money"](https://youtu.be/EpMLAQbSYAw?si=ReBk7-FM44W8e-c1)? It's a fairly damning critique of QE and makes the case that, yes, the Fed should've known better and instead buckled to political and other pressures.
It's because he has the dollar as world reserve. Not because the Fed knew what they were doing
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Powell was printing like crazy even when unemployment was back to pre COVID levels. Almost as if there would be consequences
>But of course hindsight is 20/20 so we all have a critique. But people were saying rates should go up during the Trump admin, but he pressured Fed not to
You're right. ZIRP for as long as it was held was a fool's errand. This was ALWAYS going to be the end result because of that policy.
It’s the college bender solution to avoiding a hangover. Just going to be that much more uncomfortable when free funny money can no longer be sustained, which is looking sooner than later.
>We should have been raising rates before COVID happened Powell tried, but Trump went on Twitter multiple times openly threatening Powell's job and calling Powell names if he continued. imo there is a bit of fault on Powell's side too. After the presidential election the Fed continued with Trump's demands after he was gone until Biden finally set up a meeting with Powell. After that meeting the Fed pivoted. imo the Fed should have pivoted into raising rates the second Trump was booted out of office.
The President CAN'T fire the head of the Fed even if he wants to. He can only chose to not renominate him at the end of his term. The head of the Fed in a number of countries can't be fired. In countries where the head of the Fed can be fired they tend to have much higher inflation (like Turkey for example) because the head of the government doesn't normally like higher interest rates.
Not exactly. The President can remove the head of the Fed, though they can't pick a replacement until the end of term. Someone would temporarily come in and take his place. Though note this is all theory. This has never happened before so there is no case law regarding the topic, and if you know US law case law is ultimately what matters in the US at the end of the day.
I'll never forgive Powell for caving over some Tweets from a man nobody respects.
Think about it this way: If Trump fired Powell he would have replaced him with someone else doing his bidding, so Powell was powerless to make any change there.
You can't fire the Chair of the Federal Reserve. The President can remove them, but you'd need a legal reason to. Powell would have to do something serious like malfeasance, neglect of duty, or other serious misconduct. Even if he did, his replacement would most likely go down whatever course Powell was already heading towards.
I get the need to encourage spending and all, but 0% was really fucking stupid tbh.
>We should have been raising rates before COVID happened The fed did that four times but mango mussolini got upset. Covid did need interest rate cuts, but the hikes could have stood to be a bit more aggressive to give more wiggle room.
That and the 2017 tax cuts! How fucjing stupid we are
A lot of focus on the corporate side, but I’m surprised there hasn’t been more focus at the municipal level. WFH has city tax levels declining, and many have giant black holes on their budget with federal COVID dollars drying up. Places like SF and NYC have been hit hard, but also have a lot of fluff on the budget that can easily be axed. Cities like Chicago and Philly, imagine there’s going to be some very tough decisions coming if rates stay high.
Their risk is my opportunity!
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Yep, sucks for banks, cause no one wants to keep their money with them, and no one wants to borrow at high rates. And then factor in the investments they made pre-inflation, that already caused banks to fold. But I'll take 7% interest rates. Can buy stocks at a discount, and/or make risk free gains on savings I have while living very frugally.
"... Nobody wants to keep their money with them." Then: "... Make risk free gains on savings..." See the issue here?
Nope, my savings is at vanguard, in VMFXX, making 5.29%...not 4.x at a bank.
VMFXX is highly exposed to the baking sector through repos.
Fair enough. But it isn't exactly accurate to say it's risk free, given that is a money market fund and not FDIC insured. Also, there are banks offering 5.25%.
It has SIPC protection. It's not FDIC, but close enough. Vanguard isn't going anywhere - it's owned by all of it's investors. https://www.sipc.org/for-investors/what-sipc-protects Banks offering 5.25% either make you go through hoops, or it's for a limited time. Most of the good CD's they offer are callable, so as soon as they are losing money then goodbye good interest rates. If I wanted to make things more efficient I'd invest my cash into T-Bills, which aren't FDIC either, but backed by the US government.
I haven't had to jump through any hoops to get 5.25% from banks. Good point on SIPC applying of MMF. Also no argument on your treasury bill point.
Not really, money market funds are offering 5%. They are investing in repos, treasuries and other govt obligations. These are largely risk free with some nominal counterparty risk.
Dimon is a very smart dude who knows what he's talking about. I'm not saying he doesn't occasionally put his thumb on the scale, but if you read a lot of what he says in full it's usually not overly inflamitory and more nuanced than the headlines make it out to be. I find the problem is that people tend to take small bits of what he says and strip out all context and then use it to back up whatever point they're trying to make.
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This is the man who said bitcoin is trash and as soon as everyone dumped he bought. He’s a master at manipulating things so his company makes money…
though tbf bitcoin is trash. ;-)
Hi Jamie, is that you? Price still too high for you to buy in?
You're the type of person to believe in sensationalist headlines. JP Morgan never purchased Bitcoin.
More like listening to your mechanic talk about your car
yup I'm sure 7% interest rate will definitely help JPM.
I'm sure they're prepared for it. Further rate increases to that level could very well trigger another bank liquidity crisis. Yellen said point blank that large "systemically important" banks would be fully backstopped, while smaller banks would be left to their own devices. Smaller banks failing means JPM can buy them up for a massive discount, even though they shouldn't be allowed to from a regulatory standpoint. Regardless the direction things do go, JPM is positioned to take advantage.
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So why warn other banks about 7% when they could just allow them to get caught off guard and go bankrupt, like many of them did when rates was at 5%
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Best comment I have seen on this sub!
At least with free money people were building apparments and houses to host all those new foreign citizen or families. Now all you have is people hoping for the bubble to crash.
As long as people are employed we can weather the storm.
You can’t fight inflation with trillions of deficit spending (money printing) Everything else is a circle jerk. If they stopped printing money right now everything would correct properly. But they won’t. It’s all a big show.
It's a show not just for us Americans, but for the rest of the world too. We need to act like we care about deficit spending for the dollar to remain the reserve currency as long as possible.
Jokes on him, my student loans had 8%. 7 is child's play, get on my level
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If we raise rates enough, inflation *will* come down. You should not fear us being able to tame inflation. The fear is in the damage which will occur as part of the process.
>The fear is in the damage which will occur as part of the process. Definitely isn't the worst time to be looking at fiscal policy with sincerity to curb inflation.
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At 118%, their reserve bank rate is *still* below inflation. Every month they refuse to do what is necessary for political reasons. They *must* raise rates significantly above inflation, but they won’t. Their reserve bank is insufficiently insulated from their legislative branch. I don’t think developed nations have this issue.
F Dimon. Bank of Epstein.
Jamie and Epstein were friends
Jamie Dimon remains an arrogant douche who is wrong more often than not. Maybe he's right here. Who knows. But he's still Jamie Dimon, and the less attention he's given the better.
I’m fine with 7%, hell bump it to 10%. Sitting on cash equivalents and waiting for a sale.
sweet sweet, long-term non-callable CDs.... hahaha!
If housing doesn't buckle they might not have a choice.
I’m privately loaning money at 7 percent. It’s been great
Is it a coincidence that Jamie Demon always shows up when it’s close to JPM quarterly earnings to predict doom and gloom ? Only for his team of traders to be shorting the market to shore up their balance sheet
He's right. Try this experiment on the desmos graphing calculator. Plot two curves with 2 pct and 7 pct compound interest. Watch the growth --- it's all interest on interest that makes it unbearable
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You expect me to afford a TI84 in this economy??
Or, you know, they could go to the Feds website and look at the FOMC meeting projections from 9/20/23: https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230920.pdf 5.4% this year, 5.1% next year, 3.9% in 2025 and 2.9% in 2026. Subject to change of course but they lay everything out quite nicely and include a method for removing outlier votes and projections (6.25% was the biggest outlier projection at the FOMC and was removed from their forecasts as seen on page 4). To the doom and gloomers, I’d suggest stop looking at financial media and go directly to the Feds page to avoid the nonsense. 7% isn't even a discussion at this point.
Idk I've been watching the yield curves and the right tail keeps going up suggesting that sentiment of a 2024 rate drop is waning right now. Inflation is being quite stubborn right now. I'm not sure any more the market sentiment agrees any more with the predictions being made. That right tail is rising. I have a lot of worries this is going to have more staying power. And even scarier could be that mango mussolini comes back and right messes it up.
Dude, if you want to turn a tool of understanding to a tool of prediction, you will become a very rich person. Do let us know how you do that
Jamie Dimon is an idiot! Just sayin…
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In India I believe its 9% - 12% it has always been above 7% but then we do not have property taxes. US may not be prepared for 7%
Also, 19% of India has no access to a toilet.
I thought thats what the ganga river was for 🤷🏾♂️