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Earnings are commonly up due to stock buy backs it is worth noting. Agreed though, it was the best course of action despite what the fear mongering Glen Beck's of the world want you to believe.
Same with the bailout. Was it ideal? No, but absolutely necessary.
I think QE is absolutely NOT necessary and puts us in a worse off position in the long run.
QE is helping in the short term, driving down interest rates and propping up the bubble housing, stock, bond market. This will end in a huge clusterf-ck of people losing a lot of money.
So all the government really has is a way to manipulate how much money gets released into banks, and the cost of that money. Since we have a centrally planned/controlled government (private issuer of money and controlling interest rates (cost of money)) we get massive malinvestments. These investments would not occur under such low interest rates for as long of periods of time. so we have industries created under low interest rates which should not have been created if the free market controlled rates.
If we had competing currencies, no federally backed bank accounts, etc we would have banks competing for customers. We would also see much less leverage in the system making the system much more robust. We also wouldn't need to pay interest on a fictitious sum of money made from thin air to private bankers.
The system would be 100X more robust. The competing currencies would also limit how much money the government could spend because they could not fund their stupid ideas with printed money (inflation) since competing currencies would ruin it for them. The individuals and working class would prosper in this system. The fradualent rich people would suffer and so would government.
Stocks are in bubble territory, they are not priced well at all. Look at dividend yields and P/E ratio's. They are extremely overvalued.
We know only that QEs purpose is to lower rates and make bonds less attractive in theory. Now much we will only know if it stopped. But see now markets have reacted to just the rumor of stopping or guessing the FED minutes of ending has moved them quite abit. Many are looking forward to rising rates and fixed income interest rates rising .Some say it will mean more to that market than anything. One had s to remember what the 70's recession did to markets called a generation who never came back to equities. Some think massive amounts will move their that are on sidelines or want no risk. After all many are willing to take basically no interest for no risk now.
Japan is going down. The interest payments will soon eclipse their tax revenue. They will be the first domino in line to fall, and then it gets very "real" after that, as the domino's all start falling.
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