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> Investors know that the government will do anything to underwrite their risk. The FED only steps in for once in a lifetime risks that impacts the market broa
by malandrew 6y ago
> Investors know that the government will do anything to underwrite their risk.
The FED only steps in for once in a lifetime risks that impacts the market broadly. Any risk specific to individual firms, which is all the risk between these broad market events.
- Supermancho 6y ago> The FED only steps in for once in a lifetime risks that impacts the market broadly. Those risks overlap. It's not effectively once-in-a-lifetime, as of the last century.
- tsimionescu 6y agoThese once-in-a-lifetime risks have been happening about every 10 years lately. It's also important to remember that there are sectors of the economy receiving huge subsidies. One of the most striking is banking, which derives a good proportion of its value from the federal government guarantees on deposits[0]. [0]http://www.adriendavernas.com/papers/valuationofbanks.pdf http://www.adriendavernas.com/papers/valuationofbanks.pdf