Darleen, okay. But, aren't we talking about relative value of stocks? Isn't the only absolute value for stocks at "zero"? Should all companies, then, be priced at their absolute value? This would be a ridiculous measurement to use.
Yes it would be.
Similarily, if we price most companies at or below their "replacement value", then what long term value does the Fed anticipate relative to allowing this to continue?
The FED is incapable of directing the business environment all the FED can do is create low cost lending and that is about it.
They, the Fed, had less strict borrowing requirements with the market above 10,000 than they do now. This still makes little justifiable sense to me. Did they just now wake up, or is there some other deviant reason?
They didn't do their research. You look at stats and they are based on the whole. When you have enthusiasm that it running like water you have many lemmings.
To a common person it looks like we have a bunch of retards running the money supply.
If they were looking at money supply this would not of happened. By keeping tabs on the money supply the free market would of determined the value of the supply. By having too much money flowing you decrease the value it can create for you.
can see your reasoning, but I believe it may represent faulty thinking on the part of the Fed. Someone, somewhere has decided that stock prices are still too high? High compared to whose predefined measurements?
You and I all of us determine how the market is valued. If you are working at a company and your wages are looking about as grim as their outlook you certainly are not going to put your dollars in their stock.
Why don't we price all stocks at the cash they have in the bank, and give nothing relative to the value of their business? There are a ton of companies in this row...some priced less than their cash in the bank
It is a little more than that you can have all the cash in the world but if you don't know if you can make it grow the future appreciation of investment dollars is just too questionable.
We have "zero-sum", "cash", "replacement value"...which dumb ass has decided that stocks should be priced at arbitrary figures that fit nicely into their predefined forumula? <?I>
You are taking highly speculative stock when you are thinking in terms of Zero Value. Real is that there is a value but overvalued is condition of exuberance that inflates real value.
can have a $20 stock priced at "replacement value" and earn 6%. Or I can own a $30 stock at "replacement value plus earnings power" and still earn 6%.
What is the relative difference between 6% and 6%? They can support the market to keep stock prices sustained. Or they can withdraw their support and keeps prices falling.
Here you confuse me as the people all of us determine the value of stocks and if there is no value. Within that when the financial shenanigans becomes to large the value is not there. In other words the shenanigans created the value.
It appears the Fed has chosen to support the market at some predefined criteria, none of which makes long term sense relative to generating local support or stability for the US stock market.
The FED does want to support business as a sound economy pertains to how well business is doing. When the FED is throwing out too many dollars they are devaluing what the business economy can do.
It doesn't matter if the rate is 1.75% of .25%. If the Fed closes off all borrowing power, then the relative worth of low rates is meaningful only to the housing market...and this worth dries up eventually too at some point, does it not? We already have people remortgaging their homes twice within the same year as rates have fallen this quickly within a year's time.
The FED really can't determine who should borrow or who should not that is up to the specific lender. You have numerous laws working for property investment tax benefits were part of the incentive. The housing market cannot drive the economy as job creation is limited not only because housing is not a broad money producer but it is negative on cost of growth when put into perspective of labor costs. |
