Why Is The Stock Market Doing So Well In A Bad Recession?
- Thread starter PoliTalker
- Start date
PoliTalker
Diversity Makes Greatness
Yep. That can be fixed, but we've let it go on so long that only a drastic measure (the one time wealth tax is the best thing I've seen proposed) will correct it. We have to do something like that, and follow it up by significantly raising taxes on the top 1%. Will it hurt the stock market? Yep. That's what happens when house stops giving you credit.
Dont undetstand markets do you ?
cawacko
Well-known member
Dude, are we looking at the same thing here? Unwinding of the Fed balance sheet? The Fed balance sheet has been exploding. What do you think the Fed’s been doing these last few months? We’re in a recession and a global pandemic yet the stock market is booming. It sure as hell isn’t economic fundamentals driving it.
And regarding the stock market the stock market isn’t the economy. You’re free to debate what economy policy you prefer but that’s not what’s moving equities.
It wasn’t economic fundamentals driving the boom the past decade. As stated, we had the weakest economic recovery since the Great Depression yet the equities boomed. QE punished savors. It forced people into more risk. Each time the thread threatened to stop QE the market dove, and ultimately the Fed would pull back because the market was addicted to the stimulus.
I understand them perfectly. If you have a point, why don't you make it instead of trolling?
cawacko
Well-known member
Not following what you’re referring to here
Up until recently, the Fed was unwinding the balance sheet that exploded because of QE. The point is that the money did not go into the money supply. So your posit is demonstrably wrong. That money went directly to excess reserves. Excess reserves are not part of the money supply.
cawacko
Well-known member
They can put it in real estate, they can invest in new companies, they can put it in bonds. Where do you think capital comes from to invest in new ideas and companies?
cawacko
Well-known member
Until recently? Ok. The thread is about why the stock market is booming in a recession. Look at the Fed balance. It ain’t unwinding.
It is not demostratobly wrong that QE punishes savors and pushed people into riskier investments (like the stock market) to find higher returns and was the driver behind the market booming.
PoliTalker
Diversity Makes Greatness
Hello Concart,
It's really kind of simple. The economy will always be strong when the government is bleeding itself to death to fuel it. Republicans want to do it by greasing the rich. Democrats want to do it by taking care of everybody who can't find a job.
Balance the federal budget and we'd find out how things really are.
It's really kind of simple. The economy will always be strong when the government is bleeding itself to death to fuel it. Republicans want to do it by greasing the rich. Democrats want to do it by taking care of everybody who can't find a job.
Balance the federal budget and we'd find out how things really are.
PoliTalker
Diversity Makes Greatness
Hello cawacko,
If a strong quick recovery is fueled by excessive government debt then it is false and doomed. It has to be build up slowly for resilience.
If a strong quick recovery is fueled by excessive government debt then it is false and doomed. It has to be build up slowly for resilience.
Horse mierda.
When was the last time that Democrats supported reduced spending?
Dementia Joe has already said that he will raise taxes, fool.
PoliTalker
Diversity Makes Greatness
The economy is on life support and it's plugged into the government. Cut that off and things go downhill rapidly.
Hello cawacko,
We cut taxes for the rich too much. The deficit got run up during a good economy. Totally irresponsible.
If the economy is so good we should be able to eliminate the deficit and start paying down the debt.
Not doing that? Then is a false boom; and doomed.
Hello cawacko,
We cut taxes for the rich too much. The deficit got run up during a good economy. Totally irresponsible.
If the economy is so good we should be able to eliminate the deficit and start paying down the debt.
Not doing that? Then is a false boom; and doomed.
This round of QE is simply intended to increase short term liquidity. Nothing more. The Fed buys longer term bonds, but the money is placed directly into excess reserves. It enters the money supply only when a bank chooses to lend that money or the bond matures.. Until they do, the money remains in excess reserves, and the Fed has discouraged lending from excess reserves by paying interest on them. I believe that practice is still in place. If it's on the Feds balance sheet it isn't in the money supply.
cawacko
Well-known member
I don’t know how many times this has to be repeated, the stock market isn’t the economy. You started the thread about the stock market and why is it performing like it is.
“It has to be build up slowly for resilience.”
The future perfect of “build” is “built,” fool.
You’re quite an “intellectual.”
I made my point. You dont understand them at all.
PoliTalker
Diversity Makes Greatness
Hello cawacko,
They should be paying more taxes. You can't have a country without a government. That costs money. Republicans are running the government on credit and pocketing the tax cuts. Irresponsible!
They should be paying more taxes. You can't have a country without a government. That costs money. Republicans are running the government on credit and pocketing the tax cuts. Irresponsible!