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The fact that YOU may not understand what QE is (and isn't) is not my problem.
I stand behind everything I've posted here.
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It's just indicative of your ignorance on the subject. QE is a very specific thing. It's not simply "whatever the Fed does". Anyone who makes that claim is clearly ignorant of economics. QE is a very exceptional thing that's been done very rarely - and only under dire circumstances. It's not just the Fed setting interest rates by setting the overnight rate or prime rate (which is part of what the Fed normally does). QE was a means of driving interest rates even lower than was possible using simply the prime rate or the overnight rate. The end of QE simply means this exceptional effort is deemed no longer necessary in order to keep money moving. It doesn't mean that interest rates will suddenly skyrocket. It just means that they won't be as low as they are TODAY. They'll still be kept low for the foreseeable future through conventional means however - but QE itself will no longer be used. That particular tool will be "put back on the shelf". QE is a tool that was used to help boost the housing market and get money moving again in the overall economy. It has done that. It's time to end it - and the Fed WILL
The Fed is going to do whatever it has to do to keep rates artificially low. We both have agreed that is a bad thing but yet, that is what they are going to do.
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Does the Fed affect the stock market with all this manipulation?
Of course it does (along with affecting many other things) - because it controls the cost of money - that's what it was DESIGNED to do. The Fed was created to help avoid the constant roller-coaster of boom and bust cycles that existed before it.
Did you write this with a straight face? LOL......they are the reason for the bubbles. The housing bubble does not happen with the actions by the Fed.
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It has not been completely successful in that, but anyone with a knowledge of economic history of the 1700s and 1800s knows that such cycles were FAR more fequent before the creation of the Fed than after.
By and large the Fed has done what it was meant to do - not always of course, as the 2007/2009 Great Recession shows - but certainly the fequency of booms/busts has been reduced significantly.
Ken
The markets are not supposed to be a guaranteed thing.
just in one month it has dropped 1000 points from 17.3 to 16.3.....years ago that would be devastating , but today people just laugh it off
Because they know the Fed will come in and do whatever that have to, to make sure the markets are taken care of. Even if it continues to harm the middle and lower classes.
just in one month it has dropped 1000 points from 17.3 to 16.3.....years ago that would be devastating , but today people just laugh it off
In your example a 1000 point swing today is only a 5.7% loss. "Years ago" in 1982, the DOW moved above 1,000 for the first time. A 1,000 point drop would have made the stock market lose 100% of its value.
I think you have to look at proportionality more than raw numbers.
Plus Obama's Fed is openly stating that they will protect the markets through QE Trickle Down if need be.
In your example a 1000 point swing today is only a 5.7% loss. "Years ago" in 1982, the DOW moved above 1,000 for the first time. A 1,000 point drop would have made the stock market lose 100% of its value.
I think you have to look at proportionality more than raw numbers.
Plus Obama's Fed is openly stating that they will protect the markets through QE Trickle Down if need be.
The Dow hit 1000 in 1973. In 1975 it was down to below 600. The world didn't end.
just in one month it has dropped 1000 points from 17.3 to 16.3.....years ago that would be devastating , but today people just laugh it off
That's because the that drop is less than 10%. It's not the NUMBER OF POINTS the DOW drops that's important, it's the PERCENTAGE of the drop. Far smaller drops in the past had more impact because they represented a larger percentage of the DOW.
Did you write this with a straight face? LOL......they are the reason for the bubbles. The housing bubble does not happen with the actions by the Fed.
The Fed did play a big role in the housing bubble, and even Greenspan admitted it. In 2004 when the markets were heating up, the Fed should have started to cool them down, but they did the opposite keeping rates artificially low, and Greenspan even went in front of the TV cameras to encourage people to take advantage of sub-prime variable rate mortgages, although he knew the rates had nowhere to go but up. But then again, it was election year, and they wanted things to look good......
Utter nonsense.
52 MILLION American workers have 401Ks - with most of that money invested in the market. Tens of millions more have pensions with money invested in the market.
Funny how well over 60 MILLION Americans are "rich".
Ken
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