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Read the history of the 1929 crash. Right now, central banks are doing what the titans of business did during the 1929 crash. They're trying to shore up the market by injecting cash, so that more money will go into the market. It didn't work in 29, and it's not going to work now. There will be a temporary upward spike (like today), but as the enormity of the economic slowdown due to the pandemic hits, there will be a huge crash. And then, when the pandemic is over, the market will rise again, everyone will forget about this, the way that everyone (who lived) forgot about the Spanish influenza, and economic activity will resume, and the world will go on.
Read the history of the 1929 crash. Right now, central banks are doing what the titans of business did during the 1929 crash. They're trying to shore up the market by injecting cash, so that more money will go into the market. It didn't work in 29, and it's not going to work now. There will be a temporary upward spike (like today), but as the enormity of the economic slowdown due to the pandemic hits, there will be a huge crash. And then, when the pandemic is over, the market will rise again, everyone will forget about this, the way that everyone (who lived) forgot about the Spanish influenza, and economic activity will resume, and the world will go on.
This repo market action has been going on since September 2019 or so give or take so it’s not the responsible action for today’s movement
Read the history of the 1929 crash. Right now, central banks are doing what the titans of business did during the 1929 crash. They're trying to shore up the market by injecting cash, so that more money will go into the market. It didn't work in 29, and it's not going to work now. There will be a temporary upward spike (like today), but as the enormity of the economic slowdown due to the pandemic hits, there will be a huge crash. And then, when the pandemic is over, the market will rise again, everyone will forget about this, the way that everyone (who lived) forgot about the Spanish influenza, and economic activity will resume, and the world will go on.
Dude the first part of that is abysmal analysis. 180 degrees out of phase with reality in some ways.
I don't think understanding the repo market or the complexity of the global financial system is basic Econ 101.
I do think it is interesting to try to understand it and even experts can't seem to agree on why the repo market shot up last fall. This video talks about the event and gives some basic overviews on different theories about what is going on in case the OP is interested.
The OP is correct in that obviously the wealth of the economy has been pooling up for investors and stockholders as of late. And obviously QE and Repo operations are being done to keep the current system working (which helps the former players). Whether that is a good or bad thing is an entirely different question!
This is crazy that the US government is giving free money to investors and stock holders. To keep the stock market up.
All this free money when the US has major debt.
<sigh.>
Econ 101. It's a thing. Free online classes.
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