> ... The Fed hasn't bought a single share of stock.
1. This is actually currently being debated within the Fed.
2. I didn't say the Fed is buying stocks. They are buying the stable assets that the mega-wealthy have in their portfolio. Mega-wealthy don't have all their eggs in one basket. The Fed in solidifying a portion of their basket which allows mega-wealthy to retain the added risk in the markets.
When you throw extra demand in a market, prices go up all across the board, not equally though.
As for this particular situation, Fed buys corporate bonds, making companies less risky for stockowners. They also push those yields down, so capital goes to stocks to seek better returns.
Tell me how Federal reserve's actions don't prop up the stock market?
The Fed is artificially keeping interest rates low allowing idiotic stock buybacks to continue for almost no cost, keeps the cost of investor speculation cheap and they are bailing out companies that have bad non-performing loans (banks included)...
The Fed's "Rube Goldberg activity" holds up the stock market...uuuuntil it doesn't.
heimatau|5 years ago
1. This is actually currently being debated within the Fed. 2. I didn't say the Fed is buying stocks. They are buying the stable assets that the mega-wealthy have in their portfolio. Mega-wealthy don't have all their eggs in one basket. The Fed in solidifying a portion of their basket which allows mega-wealthy to retain the added risk in the markets.
heimatau|5 years ago
This is not aging well.
https://www.newyorkfed.org/markets/primary-and-secondary-mar...
legolas2412|5 years ago
As for this particular situation, Fed buys corporate bonds, making companies less risky for stockowners. They also push those yields down, so capital goes to stocks to seek better returns.
Tell me how Federal reserve's actions don't prop up the stock market?
mrscottson|5 years ago
The Fed's "Rube Goldberg activity" holds up the stock market...uuuuntil it doesn't.
Source: My black swan farm