Tech faces hour of reckoning as fundraising drops, layoffs rise

Re:Tech faces hour of reckoning as fundraising drops, layoff... by Silhouette on Monday January 18, 2016 @10:58AM (#10925080)

On the other hand, anybody whose financial situation was severely affected by a widely predicted and minimally sized increase in extremely low interest rates was pretty toasted anyway.

If you're looking at medium-term financing options -- on the scale of multi-year business loans, mortgage fixed rate periods, and the like -- in most of the Western world, you should probably be considering whether you can afford at least 2.5% interest rate rises over the next few years, not just 0.25%.

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Re:Tech faces hour of reckoning as fundraising drops, layoff... by marcosdumay on Monday January 18, 2016 @01:10PM (#10925832)

The point is, it's not a minimally sized change. You double the interest rate, you half the amount of money big institutions have available to roll around.

I happen to think it was a good decision. But why does everyone insist on calling this change "small"?

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Re:Tech faces hour of reckoning as fundraising drops, layoff... by jeffwass on Monday January 18, 2016 @02:16PM (#10926236)

So if the rate was zero, and they increased it by 0.01%, your claim would be that it was an infinite rate increase, and big institutions would have zero money to roll around?

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Re:Tech faces hour of reckoning as fundraising drops, layoff... by marcosdumay on Monday January 18, 2016 @03:42PM (#10926771)

If the rate was zero the, incredibly small attrition banks suffer while creating money would completely determine how much money is in circulation. If not for it, yes, the amount of money would go to infinity, and would get down infinitely much by any positive rate.

My point is, this attrition turned up to be incredibly small, and still irrelevant at the US later interest levels.

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Re:Tech faces hour of reckoning as fundraising drops, layoff... by Silhouette on Monday January 18, 2016 @02:51PM (#10926461)

You double the interest rate, you half the amount of money big institutions have available to roll around.

Maybe I'm missing something really obvious here, but in what practical sense is that true?

But why does everyone insist on calling this change "small"?

Because by law or convention 25 basis points is the smallest increase in base interest rate that most national banks will ever make, and since this change was telegraphed long ago it's literally the minimum anyone working with serious finance was expecting.

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