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Yeah, the quote is bizarre considering the financial industry held us all at gunpoint less than 4 years ago.
Yeah, the quote is bizarre considering the financial industry held us all at gunpoint less than 4 years ago.
Do they assume we have no memories?!
If they assume so, they are largely correct.Yeah, the quote is bizarre considering the financial industry held us all at gunpoint less than 4 years ago.
Do they assume we have no memories?!
Yeah, the quote is bizarre considering the financial industry held us all at gunpoint less than 4 years ago.
Do they assume we have no memories?!
They made the bond yields so low that the money had to flow into the market, right?
"It is one of the serious evils of our present system of banking that it enables one class of society–and that by no means a numerous one–by its control over the currency, to act injuriously upon the interests of all the others and to exercise more than its just proportion of influence in political affairs. The agricultural, the mechanical, and the laboring classes have little or no share in the direction of the great moneyed corporations, and from their habits and the nature of their pursuits they are incapable of forming extensive combinations to act together with united force...The mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining in the different States, and which are employed altogether for their benefit; and unless you become more watchful in your States and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of Government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations."
well think of it this way - QE basically allows for cheaper money to enter the market via ZIRP. Now, if I was a corporation or a hedge fund who wanted to maximize returns, where would I put that money? Believe it or not, many corporations are sitting well in regards to their liquidity. Apple is a common long for many hedge funds (Greenlight capital, Riaff partners etc). When your hedge fund valued in the hundreds of millions has a 15% portfolio in these types of blue chips and you get good returns, do you think its advantageous to take a "risk" and invest in American labor which is costly? It seems institutions and money funds prefer the 'safe' haven of the S&P 500 when it comes to parking their money. QE in my mind has facilitated the general bullish trend in the major indexies. With little interest in borrowing, as well as many toxic assets freed up, it pays to invest in public blue chips.
The bullish upward trend seems to coincide with QE , but no one can be certain obviously. It makes some sense though that if there is cheap money to borrow, the best thing to do with it is go long in companies with good balance sheets and growth prospects. Unfortauntly, more money is being funneled there instead of actually growing our economy, especially when you consider the outsourcing the bigger companies partake in.
For now I am out of the market. Actually, I dislike ANYTHING with counterparty risk and will likely build a portfolio around physical assets, or personal business ventures. My retirement funds are parked in a very disappointing treasury bonds which are barely outpacing inflation.. Sad panda
