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At this point its helping companies buy their own stock by having cheap loans to use instead of cash. It's not really doing much for the economy such as spurrin
by coldcode 7y ago
At this point its helping companies buy their own stock by having cheap loans to use instead of cash. It's not really doing much for the economy such as spurring more investment or hiring.
- aguyfromnb 7y agoWhat are the mechanics by which loans and stock buybacks do nothing, while investment and hiring do good things? It's all shifting money around, the results of which benefit different groups. That's not to say that in specific cases dollars couldn't be spent better elsewhere, but there is no "this is better than that" formula. "Investing" when there's nothing to invest in is pointless, and if you hadn't heard, unemployment is near all-time lows; companies are hiring.
- kurthr 7y agoWell, actually the stated point of the Fed's move is to spur inflation and that requires monetary velocity (spending and re-spending). For that stock buybacks are not very effective (relative to other Gov spending), because the money just stays in people's investments and doesn't go anywhere. Also, I think you really want to look at the participation rate rather than the un-employment (which has been steady for a year whatever the Fed is doing).