[quote=deadzone][quote=Rich Toscano]Although in fairness, I suppose that’s what spd was getting at with his “animal spirits” comment. But still, my reply to that would be “who cares?”
I am baffled by the idea that it’s somehow good for the economy if people want to overpay for stocks (or houses or other financial assets). That may provide a short-term economic boost via the wealth effect, but that cuts both ways and there will be a reverse wealth-effect if/when asset prices return to normal. (And if they don’t return to normal, then you’ve permanently lowered future returns, ie you just moved returns forward in time a bit).
Sorry spd, not to pick on you… you’ve just hit on one of my pet peeves*, which in this case is trying to derive meaning from short term stock price movements, combined with a second pet peeve which is pretending there is or should be a relationship between stock performance and presidential performance.
* – I have many, many pet peeves and this is a function of my bad personality, nothing to do with you.[/quote]
That is my complaint about our entire system which is completely run by the Fed (irrespective of President or party in Office). It is disturbing that our economy is run by a secret cult of “Fed Presidents” that aren’t elected or accountable to the people. And as Rich points out this endless money printing to create “wealth effect” just causes people to overpay for assets and the less fortunate to be completely priced out of housing and other things.
Another example of the craziness of this everything bubble we are in: I just pulled up a chart of microsoft stock at random. Since 2017 it is up 400%! Just another example of the extreme price distortion caused by Fed money printing. Anyone who argues this is a good thing is just selfish and greedy because they are part of top % who are benefitting from this.[/quote]
Ive owned MSFT shares for over 30 years. Might want to look back longer than 2017. It was pretty much flat from 1999 to 2017. A successful dominant tech company was almost flat for close to 20 years until they made the transition to the cloud and SAAS. They have massive dedicated customer base and finally were able to increase their margins. Thats the primary reason the stock finally went up.
