The FED (Federal Reserve) recently announced that it will purchase up to $750 billion worth of both investment-grade and junk bonds, including bond exchange-traded funds. The Fed hasn’t yet made any purchases but the mere promise alone seems to have achieved the aim of preventing the economic crisis from becoming a financial crisis. So is this a good thing? goal achieved? not exactly, this move may be the worse thing for the US economy, so stick around and watch this video to hear my opinion.
By Stock Chat
where the coffee is hot and so is the chat
Keep it up 👍
Our money is used to bail out the failures of wall street.
This is not capitalism,
losses are distributed to the public,
profits are privatized
If the feds had to announce that, then their intentions weren't pure at all thats for a fact.
It's over commander!
– Han Solo
Bolsho spacibo brat! Great overview of this situation
QE has run its course. It has hurt savers in the process and inflated asset prices, at the benefit of asset holders. It has worked in the US to an extend by suppressing term premium between long-term -short term bonds, forcing portfolio re balancing. However, its has been rather ineffective in Japan and EU due to the dominance of bank loans. Nonetheless, you can print forever if the velocity of the money does not change, simply put, banks holding on to excess reserves and even willing to pay negative interest as safe haven. Therefore, showing that it depends on the banks to lend. Keynes highlighted this issue in the fisher equation and proposed that the only viable option left is for fiscal expansion, if government wants to actually reduce unemployment and increase inflation. Also, it would be naive to think that market correct itself, but its not the case as you can get serve stagflation and thus, central bank has stepped in somewhat support liquidity and insolvency. Another thing, you can have companies with solid market potential that have shit capital structures, which make them more susceptible to default.
On purpose btw…but there's a 0.02% chance I'm wrong.
Best video I seen you do yet!!! Now your talking’
any videos coming out today im hooked
Probably one of the best summaries of what is going on. It is illegal for the Fed to provide funding to a failing company The Federal Reserve Act (Sect 13(3)). Enter the Special Purpose Vehicle. It is a shell game. But the Fed only has to say it is going to do something, and the herd follows.
Heard a rumor the fed is starting tomorrow buying bonds
I understand your perspective on why you disagree with this, but think about how many jobs would be lost if they never did this
You dont need to use foul language man. I can sense its not how you naturally speak. Just be clear and concise with not foul language. Youtube sensors foul language and I believe your videos are being shadow banned. Just stop the bad language so you can grow. you deserve a bigger audience.
Tom Nash Good job to you for making a simple and direct explanation of what the fed is doing. Most layman would not understand the moral hazard that the fed is creating. The fed essentially punishes savers and rewards risky and inefficient behaviors by propping up shitty businesse. This will only delay the inevitable and make the pain worse later on
any videos coming out today
When you live in a society fueled by debt on top of debt on top of debt what else can you do. So it's cigarettes and hookers for everybody.
Do not worry. Everything will be fine. Americans are brutally resilient, the Dems/Libs will do anything to crash this economy. Trump will win this silent war and patriots will endure. Trust God and We will be victorious. WWG1WGA
So what does this mean for the economy then? Are we going into hyperinflation
Loved this economics video please do more!!
Thanks for the info especially the whole way you put it in broke it down keep it up man
While I believe that if a company is failing naturally and any crisis hastens that failure it would be foolish to bail them out. However, there are industries in this crisis that are completely shutdown and revenue has stopped. Healthy companies can deteriorate quickly in instances like these and a bailout like this has a chance to be effective. In any program, there will be companies that don't deserve it and receive funds and vice versa.The main thing the US government would need to do, and is a weak point, is oversight.
Damn dude…you might wanna move back to the USSR!!!
Common' Tom, wats wrong with Jimmy wanting ciggarettes and hookers. 😊
wall street banker like this.fed.action
There's nothing federal about the privately owned Fed. The world owes more than there is in the economy, thus enslaving us with future taxations. Anyone remember why America declared its independence?
Good one, Tom!
It is election year. They will spend whatever and do whatever is possible to keep the stock market up. Trump has bragged about the stock market being so high during his presidency in the past. He won’t let it go down. It is reckless but no politicians ever did care about the future.
What's OG in russki 👊
WoW!!! Talk about eating your own tail!!! The US Economy is doomed!!!