6 ms·

Apple is now worth 1.5T dollars

18 points by headalgorithm 6y ago

seibelj 6y ago
With the Fed setting interest rates at 0% through 2022[0], all equities will continue to rise in our nothing-fails, free-money, inflationary economy. [0] https://www.wsj.com/articles/fed-debates-how-to-set-policy-for-the-post-pandemic-economy-11591781402?mod=hp_lead_pos2&mod=hp_lead_pos1 https://www.wsj.com/articles/fed-debates-how-to-set-policy-f...
- nine_zeros 6y ago
  So we are truly going the way of inflating assets as high as possible. What is really stopping leveraged gambling any more? What happens to people still paid in dollars? That 60k a year household income won't be enough to survive
- cko 6y ago
  It seems to me that assets are inflationary and consumer products are somewhat deflationary. Most people don't own assets, so even if the Fed gives money directly to consumers (e.g. UBI), that money will be just enough to live on, and trickle up to the asset owning class.
  - chrisseaton 6y ago
    > Most people don't own assets Almost everyone owns a pension.
    - deleted 6y ago
      [deleted]
beezle 6y ago
Thank the Fed for this bubble explosion. All those bonds they've been buying? What do you think happens with that loot? BTW - MSFT 1495B AMZN 1320B GOOG 1002B TSLA 188B (QCOM+AXP) (edit grammar)
- deleted 6y ago
  [deleted]
- chrisseaton 6y ago
  I thought the government sold bonds in an emergency, not bought them? Who are they buying them from?
  - MagnumOpus 6y ago
    The treasury issues (sells) bonds and t-bills to banks/asset managers/random people, in order to get money to give away in bailouts and handouts. The Federal Reserve increases its balance sheet ("prints money") and buys bonds and t-bills in order to keep demand high and interest rates low. (Net net this causes the value of the dollar to drop and to devalue against "real assets" like company shares, real estate and commodities. This "asset price inflation" is a desired side effect.)
    - beezle 6y ago
      That's not really what has happened here. Asset/fund managers buy all types of fixed income instruments - government bills, notes, bonds, municipals debt, corporate debt, mortgages, bank loans, on and on. During the mayhem in late Feb/early March the secondary market for any and all of that debt for all intents vanished. This left many funds in difficult positions - their cash reserves are low and not sufficient to meet large daily redemptions therefore they need to sell assets they own. Those that also owned equities/commodities (balanced style funds) sold those more liquid assets, adding fuel to that dumpster fire. However, debt only funds were still left with no where to go. Thus the Fed stepped in and agreed to purchase exceedingly large amounts of debt instruments - pretty much anything rated investment grade. Thus the Fed monetized those holdings and we are now seeing that cash pushing up equity prices. The above is a little bit over simplified and leaves out many other players (ie repo problems) Also - the Treasury issues debt every week to meet the regular financial obligations of the US government, not just for special needs (various bailouts)
zwieback 6y ago
I had an Apple ][ in the 80s, (the last Apple product I loved unconditionally) and I told my dad "we should buy stock, it'll be great". Unfortunately, I had no money then.
- cko 6y ago
  It's ok. If you had money you may have bought some stock, but it's less likely you would have held onto it this whole time.
  - zwieback 6y ago
    Very true - I remember the crisis before Jobs returned, probably would have dumped it and bought Pets.com or something like that.
mcphage 6y ago
I think Apple reveals the upper limit of what Capitalism can produce. Worth 1.5 trillion dollars, with hundreds of billions in the bank, and what are they doing with it? Stock buy-backs and dividends? They have tremendous margins, and mostly high quality products, but they can't or won't leverage their profits to either lower costs, or raise quality on their bad components. So they're winning in the profit category, but can't seem to translate that into winning elsewhere. More money seems to be only so useful, and they've crossed that point.
- deleted 6y ago
  [deleted]
- PaulStatezny 6y ago
  I don't understand why you're being downvoted. I think this is an interesting point. They're not cycling that money back into the economy, they're holding onto it. Which, in general, is considered bad for the economy, no?
  - chooseaname 6y ago
    > They're not cycling that money back into the economy, they're holding onto it. I'm no economist, but this seems counter to what we've been told since Reagan.
  - mcphage 6y ago
    > They're not cycling that money back into the economy, they're holding onto it. I definitely agree with you here, but my point was slightly different—they can't even use that money to improve their products. They're successful beyond compare but that doesn't even do them much good, let alone anyone else.
  - perl4ever 6y ago
    Their money doesn't represent resources sitting idle. The whole point of the financial system is that there isn't $X trillion idle. The securities they own are claims on stuff other people are using. Talking about cycling it back into the economy is nonsense, because it isn't, can't be, taken out.
drannex 6y ago
Definitely overly inflated.
nikolay 6y ago
I just wonder how those Republicans who claim that Trump is fighting the Deep State, part of which is the Fed, take the fact that the Fed actually supports Trump for the upcoming presidential elections. Or maybe don't just don't see what's going on...
xtiansimon 6y ago
I just want to take this moment to remind peeps: "You can take my Mac when you pry my cold dead fingers off the mouse." Power Computing circa 1996

18 points by headalgorithm 6y ago

With the Fed setting interest rates at 0% through 2022[0], all equities will continue to rise in our nothing-fails, free-money, inflationary economy. [0] https://www.wsj.com/articles/fed-debates-how-to-set-policy-for-the-post-pandemic-economy-11591781402?mod=hp_lead_pos2&mod=hp_lead_pos1 https://www.wsj.com/articles/fed-debates-how-to-set-policy-f...

nine_zeros 6y ago
So we are truly going the way of inflating assets as high as possible. What is really stopping leveraged gambling any more? What happens to people still paid in dollars? That 60k a year household income won't be enough to survive
cko 6y ago
It seems to me that assets are inflationary and consumer products are somewhat deflationary. Most people don't own assets, so even if the Fed gives money directly to consumers (e.g. UBI), that money will be just enough to live on, and trickle up to the asset owning class.
- chrisseaton 6y ago
  > Most people don't own assets Almost everyone owns a pension.
  - deleted 6y ago
    [deleted]

beezle 6y ago

Thank the Fed for this bubble explosion. All those bonds they've been buying? What do you think happens with that loot? BTW - MSFT 1495B AMZN 1320B GOOG 1002B TSLA 188B (QCOM+AXP) (edit grammar)

deleted 6y ago
[deleted]
chrisseaton 6y ago
I thought the government sold bonds in an emergency, not bought them? Who are they buying them from?
- MagnumOpus 6y ago
  The treasury issues (sells) bonds and t-bills to banks/asset managers/random people, in order to get money to give away in bailouts and handouts. The Federal Reserve increases its balance sheet ("prints money") and buys bonds and t-bills in order to keep demand high and interest rates low. (Net net this causes the value of the dollar to drop and to devalue against "real assets" like company shares, real estate and commodities. This "asset price inflation" is a desired side effect.)
  - beezle 6y ago
    That's not really what has happened here. Asset/fund managers buy all types of fixed income instruments - government bills, notes, bonds, municipals debt, corporate debt, mortgages, bank loans, on and on. During the mayhem in late Feb/early March the secondary market for any and all of that debt for all intents vanished. This left many funds in difficult positions - their cash reserves are low and not sufficient to meet large daily redemptions therefore they need to sell assets they own. Those that also owned equities/commodities (balanced style funds) sold those more liquid assets, adding fuel to that dumpster fire. However, debt only funds were still left with no where to go. Thus the Fed stepped in and agreed to purchase exceedingly large amounts of debt instruments - pretty much anything rated investment grade. Thus the Fed monetized those holdings and we are now seeing that cash pushing up equity prices. The above is a little bit over simplified and leaves out many other players (ie repo problems) Also - the Treasury issues debt every week to meet the regular financial obligations of the US government, not just for special needs (various bailouts)

zwieback 6y ago

I had an Apple ][ in the 80s, (the last Apple product I loved unconditionally) and I told my dad "we should buy stock, it'll be great". Unfortunately, I had no money then.

cko 6y ago
It's ok. If you had money you may have bought some stock, but it's less likely you would have held onto it this whole time.
- zwieback 6y ago
  Very true - I remember the crisis before Jobs returned, probably would have dumped it and bought Pets.com or something like that.

mcphage 6y ago

I think Apple reveals the upper limit of what Capitalism can produce. Worth 1.5 trillion dollars, with hundreds of billions in the bank, and what are they doing with it? Stock buy-backs and dividends? They have tremendous margins, and mostly high quality products, but they can't or won't leverage their profits to either lower costs, or raise quality on their bad components. So they're winning in the profit category, but can't seem to translate that into winning elsewhere. More money seems to be only so useful, and they've crossed that point.

deleted 6y ago
[deleted]
PaulStatezny 6y ago
I don't understand why you're being downvoted. I think this is an interesting point. They're not cycling that money back into the economy, they're holding onto it. Which, in general, is considered bad for the economy, no?
- chooseaname 6y ago
  > They're not cycling that money back into the economy, they're holding onto it. I'm no economist, but this seems counter to what we've been told since Reagan.
- mcphage 6y ago
  > They're not cycling that money back into the economy, they're holding onto it. I definitely agree with you here, but my point was slightly different—they can't even use that money to improve their products. They're successful beyond compare but that doesn't even do them much good, let alone anyone else.
- perl4ever 6y ago
  Their money doesn't represent resources sitting idle. The whole point of the financial system is that there isn't $X trillion idle. The securities they own are claims on stuff other people are using. Talking about cycling it back into the economy is nonsense, because it isn't, can't be, taken out.

drannex 6y ago

Definitely overly inflated.

nikolay 6y ago

I just wonder how those Republicans who claim that Trump is fighting the Deep State, part of which is the Fed, take the fact that the Fed actually supports Trump for the upcoming presidential elections. Or maybe don't just don't see what's going on...

xtiansimon 6y ago

I just want to take this moment to remind peeps: "You can take my Mac when you pry my cold dead fingers off the mouse." Power Computing circa 1996