>fed says rate hike coming due to improved economy
>wall street gets "spooked" by this news acting like its a bad thing
>stock market turns red
no wonder why everything thinks this shit is rigged
>t-the economy is doing good guys
>oh fuck better overreact and drop value in everything!!!!!!!!!!!!!!!!
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>everything thinks this shit is rigged
Only the "everythings" that don't know dick about how markets work.
New to this?
It's all manipulation
That's how the modern Fed works post-QE. I don't have the picture of the flow-chart from zerohedge saved but it goes something like "Economy is good-Fed threatens rate hike-Economy slows down-Fed backs off-Repeat".
Also, Wall St. should get spooked by a rate hike, it means bonds yields will increase and returns in the equities markets will be lessened. It's pretty basic econ/finance.
>It's pretty basic econ/finance
That shit's in pretty short supply around here.
returns will be the same but the relative value of those returns is diminished when weighted for risk.
About 90 percent of trades are hft/automated anyway. It's all a house of cards.
Returns from before the rate hike to after the rate hike (so rate hike included within the return period) will be less than average returns from the equity invested in before the rate hike. Once the market adjusts, returns will normalize as they always do but I was just saying it simply so OP could understand the basics.
>stock market decreases in value, naturally by its own accord
>OH MY GOD, SOMEONE DO SOMETHING
>fed prints four trillion dollars to boost stock prices
Yep, definitely not rigged.
That's not how increasing the money supply works. The Fed by definition was created to control inflation, currency, and market stability. If it did nothing and let the market crash then it wouldn't be doing it's one job would it? Now sometimes the Fed does something and it's too little too late and the market crashes anyways, that's going to happen occasionally, but make no mistake, the game isn't rigged just because you don't understand it and aren't good at playing.
During the dot com boom the fed would raise rates and the market would panic and sell off. Next day might be down a little, but basically flat. Third day all loses were reversed. Repeat next month.
You must not understand his argument.
He lost money, therefore it is rigged.
Simplicity itself.
Give this a read, you illiterate fucks.
en.wikipedia.org
They printed money specifically to raise stock prices.
>fed says they are going to hurt growth
Sounds like a great time to invest
Please stop kidding yourself.
That article says that the Fed purchased securities from banks in order to stimulate lending to the public and increase public consumption/investment. That didn't help your point at all and it actually hurt your argument. Quit trying kiddo hahaha
Raise rates is a good thing you Greenspan kikes
Fuck your stock bubble and fuck you
>sideways indices for over 18 months
>economy's all good guys
This stupid bitch is killing me.
This isn't the 80's, the Fed doesn't have to raise rates anymore. Any time it threatens a rate hike then the market sells off or manipulates data to stop the Fed from having a reason to let some air out of the economy. Let the market skyrocket until it crashes, who cares, we all know we'll have a Greenspan Put from Yellen. We can't lose nigga.
>t. 2007
>keeping interest rates low is totally not creating another bubbles guys i promise
Yellen has done the smartest thing her entire term by raising interest rates
The DJIA is overvalued at around 110%
>QE 1, 2, & 3
>Problem was solved
>Another market crash
>QE 4, 5,.......
>?
>profit
Fucking this
Goddamn millenials.
GET OFF MY LAWN
>interest never actually raised
>bubble popped
>maybe lowering interest rates will help the economy recover from the bubble bursting!
>oh god it keeps happening
Low interest fags have been retards since the fucking silverites in the 1870s
>quantitative easing fixes market bubbles and asset inflation
youre a special kind of stupid arent you?
Yeah because hyperinflation is a great fucking state for the USD to be in considering it backs several large currencies around the world and is the primary currency of the worlds largest stock market. Let's not even get into what that would do to foreign markets as a result of trade imbalances stemming from vast price differences due to currency deflation.
I never said it fixed the problem. I just said "problem solved." The problem at the time was that the market was going to crash and that problem was solved via Quantitative Easing. The problem was not "fixing market bubbles and asset inflation" as the general public (and believe it or not the Fed) doesn't give two shits about those things as long as they make money and their 401(K)s are sound. Try to be a smartass again kid
Higher interest rates causes the USD to appreciate you fucking retard
High interest rates ELIMINATES inflation
The economy NEEDS to crash to get rid of all the trash in its system. It needs a fucking purge so the economy doesnt shoot off like a rocket and fucking Challenger explode all the way to the fucking stone age like 2008 again (which is going to happen again very shortly because the original fundamental issues that caused the 2008 depression hasnt been resolved and has actually accelerated)
You got me on the i(r) relation to the USDs state of inflation vs. deflation. I got confused.
But 2008 was an issue that stemmed from the real estate sector and then asset inflation held within. Unless banks can find another form of debt to securitize, sell in a secondary market for a profit, and/or repackage into multiple derivative securities which are then rated unjustly by ratings agencies who are getting paid by the profits from the banks then we won't have another 2008.
Also, it was technically a "recession" not a "depression".
>They printed money specifically to raise stock prices.
Yeah, I remember when they did this in 1999.
All of a sudden, every stock was worth $50 more than it was the day before.
Why can't they just do it again?
was 2008 crash really only 2 quarters of negative economic growth? im sure it was longer than that.
The point is that because of the stupidly low interest rates people made unbelievably risky investments because there was no downside and people were essentially getting free money to do whatever they want.
High interest rates makes it so people need to make safe and successful investments.
I agree about public and for profit rating agencies. what the fuck is that shit? its like legal corruption
The ratings agencies seem to be getting a hefty check from banks to give their derivatives nice AAA ratings (which makes sense since the ratings agencies now have a responsibility to shareholders since they are public companies for whatever reason) and this means that the banks keep making money which gives them more money to loan out initially for debt which then is securitized and sent back to the ratings agency for more AAA ratings with a $100 stapled to it. It's an endless mad circle-jerk of money being made with no seemingly bad effects but the markets that the securities are being underwrote into are becoming very inflated and the debt-securities are maturing resulting in shitty yields for investors who aren't able to consume/invest as much next time because they just lose their 401(k).
But I guess as long as theres another sucker lined up willing to (knowingly) overpay for an asset with the thought that they will eventually sell that piece of shit to the next sucker after them for more than it's worth then this merry-go-round keeps on going.
Your in the minority buddy. still believing the 'free markets' function in way people can actually understand. I bet your a Fundamental analysis guy. Or do you read the tealeaves?
Second smart ass comment no useful Input fuck off commie loser.
Should we short the housing market?
Thats what people have forgotten"how much stock the FED owns indirectly" no markets here move along nothing to see. I beleive the JAPS are the same Bank of Japan owns or funds 70-80% of the Nikkei.
But ask this asshole he has all the answers but just wants to lord over us with his superior intellect lol typical leftwing Uni education
Crashes are a healthy part of the market all they're doing is prolonging it driving it into stagflation like JAPAN. hahahaha
Socialism isn't funny.
Yeah your so right man! No because then the the government woulfd have TOTAL control of the stock m.a........oh wait thats what you have now hahahaha
Not just speaking of the stock market silly.
2slowfourme
See what I did there
nahh you (the USA) are not even a wart on the ass of the Capitalist nation you were in the40-50's fuckin Socialist have eaten your guts from the inside out dumb cunts
Your fuckin US economy fucked up with Freddie and Fannie a total commie policy if there ever was one.
Maybe you didn't see it coming ...but fuckin wake up NOW!
Im not ragin' at you directly, just overall the people with their head up their ass.
>you (the us)
Stop
Not from the us but if I was I would call bush to bomb whatever third world goat fucking country you're from
The us is fucked look at their debt counter
Mate just telling them like it is Be assured this little 'goat fucking country'; I'm from will be right alongside the US when we go to war again NO MATTER WHAT so when I find your goat fuckin country we will see who GETS BUSH BOMBED CUNT.
But the economy IS doing good. Why do you have doubts about the US economy? The foundations of the American economy are strong and sound.
>stock market turns red
It's a temporary correction, which is healthy and even necessary for a free market economy to work. If you have a constant, uninterrupted growth it means you have a bubble, which will explode in your face when you don't expect it. The current market behavior is healthy and regulates itself admirably. Therefore, you should be happy when you see the stock market in red from time to time. Any economist can understand that.
>inb4 b-but muh imminent crash
Nigger please.
I've seen to many threads and posts from butthurt "investors", who took the b8 ("shemita" hoax, China collapse hoax), panicked and sold their stocks. After a few days their level of MAD went over 9000%, because the markets rebounded and they've lost a lot of money.
Don't be so gullible.
There will be no big crash.
The government knows what to do.
The Fed knows what to do.
2008 will not repeat itself, everything is under control.
>b-but muh debt
The US debt doesn't matter, don't even get me started again.
And I hope its in Europe cause thats where it will BEGIN mate!
>explode all the way to the fucking stone age like 2008 again
A couple of years of negative growth is a "stone age" now? Don't be ridiculous.
>which is going to happen again very shortly because the original fundamental issues that caused the 2008 depression hasnt been resolved and has actually accelerated
How is that? The only big issue in 2008 was that the government allowed Lehman Brother to collapse. It was a huge mistake and it caused a meltdown. Paulson could have bailed out the LB and nothing big would have happened. In the end the banks paid the TARP money back anyway.
Right now this scenario isn't even possible anymore, because NOONE will let a major investment bank collapse. Not that such scenario is going to happen now, because the banks have enough reserves.
>The government knows what to do.
>The Fed knows what to do.
I mean I agree with everything else you wrote but come on.
C.D.O
But I live on kangaroo island
You don't seriously think that the Fed and the DoT are just a bunch of clueless amateurs, do you? Because they are pros and they know their shit better than anyone else does on this board.
L.O.L.
Do you have any idea how much money it costs to buy into a tranche of a CDO? It's not like the average citizens 401(k) is invested in it hahahaha go back to sleep
Crikey, me too, mate!
Want to play with me knives and go hunt for shahks?
Then we can go find some dumb cunts! Hopefully they're commies.
Mate.
>appeal to authority
>0.2 shekels have been deposited in your account
An appeal to authority is using someone who is NOT an authority on a subject as if they were one.
Like claiming a Psychologist knows something about Cancer.
This is wrong and you are a faggot.
>this DENIAL
Why are you still here? Shouldn't you be out there, buying gold coins and canned food?
It's HAPPENING, you know (NOT).
Maybe not clueluess amateurs, but they sure did try to bullshit their way out of the 08. Like Alan Greenspan.
Maybe they knew what to do, but they sure screwed it up nonetheless.
Freddie mac and Fannie may 2 top tier socialist policies AMERICA WHAT HAPPENED TO YOU???