The Economy and The Fed. (1 Viewer)

[You]

The fed has lowered interest rates and they're very very low. I don't know that he can lower it any more.
The question I have is:
What more can the fed do to stimulate the economy?

 

[KardiacKat]

First off, I know very little about economics. Just enough to give a stupid opinion probably. But here's a theory from someone more interested in how human emotion drives things.

It occurs to me that the stock market is fueled by emotion and speculation as much as or more than it is by actual fact. The reason I say this is because let's say the Fed chairman is going to lower interest rates, and he's expected to lower them by half a percent. Instead, he announces he's lowering interest rates, but only by .25 percent. Oh nooos! There's a selloff, stocks take a tumble, people freak out. We've seen this happen a million times. As a layperson, I'm thinking "he still lowered it, so what's the problem?" Obviously, I don't "get" it. So anyhow, from my uneducated perspective, I would suggest the Fed pick a good spot and stick with it for a couple years. Let things settle down around it. Because every time the Fed chairman changes his necktie, somebody on Wall Street panics.

 

[deltadawg]

Question;

Are the feds still giving the first time home buyers tax credit?

 

[You]

Question;

Are the feds still giving the first time home buyers tax credit?

Not sure but my thought was that the program ended.


Kardiac, I agree that part of the stock is emotion. It's that emotion that allows the calculated smart investor to make REAL money. The stock market NEEDS that emotion.

 

[BHM]

They can lift the moritorium on offshore drilling. Announce that cap and trade is dead. Give large tax breaks to companies that move to the US. Give lrge tas breaks to all companies....

 

[BIG E]

Everyone does realize that the FED is not government, right?

 

[KardiacKat]

Not sure but my thought was that the program ended.


Kardiac, I agree that part of the stock is emotion. It's that emotion that allows the calculated smart investor to make REAL money. The stock market NEEDS that emotion.

Do you mean playing off other people's fears and emotions so you make lots of money and they lose? That kind of REAL money?

 

[BIG E]

Do you mean playing off other people's fears and emotions so you make lots of money and they lose? That kind of REAL money?

The stock market is legalized gambling. Just like a Casino, someone has to lose for the other person to make money.

 

[cdogg]

First off, I know very little about economics. Just enough to give a stupid opinion probably. But here's a theory from someone more interested in how human emotion drives things.

It occurs to me that the stock market is fueled by emotion and speculation as much as or more than it is by actual fact. The reason I say this is because let's say the Fed chairman is going to lower interest rates, and he's expected to lower them by half a percent. Instead, he announces he's lowering interest rates, but only by .25 percent. Oh nooos! There's a selloff, stocks take a tumble, people freak out. We've seen this happen a million times. As a layperson, I'm thinking "he still lowered it, so what's the problem?" Obviously, I don't "get" it. So anyhow, from my uneducated perspective, I would suggest the Fed pick a good spot and stick with it for a couple years. Let things settle down around it. Because every time the Fed chairman changes his necktie, somebody on Wall Street panics.

If they were expecting a .50% cut then they would have already built some of that into the market before the announcement, you don't wait until the announcement to place your bet, that's how you don't make money, so if its annoucned at .25%, the people that placed their bets early then scramble to try and cut their losses. I guess in your world a stock's price is based solely on earnings and there are no risks in the world?

 

[You]

Do you mean playing off other people's fears and emotions so you make lots of money and they lose? That kind of REAL money?

They don't HAVE to lose but it is a zero sum game.

Don't hate me because I'm rich.

But I DIGRESS!

This thread is about the Federal Reserve and what they can do further to stimulate the economy.
Where is DapperDan?

 

[BHM]

Everyone does realize that the FED is not government, right?

I thought they were created and controlled by Congress but I get what you mean.

So I wish to change my answer. They can give me 5 million dollars.