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Stocks Might Be 50% Lower Without Fed

http://www.cnbc.com/id/48165921

by adventureful • 14 years ago

1 2 14 years ago

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washedup• 14 years ago

this makes perfect sense. the Fed, over the last decade, has run a policy of credit expansion, followed by liquidity expansion since 2007. this is always priced in as a positive movement in equities, but many people believe that this is an illusion, and that "inflating" the preceived value of a stock has nothing to say about the true value.

bediger4000• 14 years ago

I'm no stock market or finance expert, but this seems a bit simplistic. CNBC just subtracted any stock price index gain from 24 hours before a Fed announcement. I don't think they added back in any price index loss from 24 hours after. Which seems to me to make the "price indexes lower" conclusion sort of a necessity of the arithmetic.

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