..if so, maybe one of you financial types here could enlighten me, or straighten out my thinking...
....banks "raw material" is money..
...given the present FED actions, the banks' cost for their raw material is near zer0, so are they using the money in the stock market instead of lending it into the private sector?..
.. would this perhaps be the main reason for the stock market rally?
I know that if I was in the ice cream business, and my cost of milk was near zero, even I could make a killing....
....what will happen if the FED is unable to hold the interest rate at such a low level, and it rises 3 or 4 points?
Another question, is the Fed Reserve’s electronic money transfers coming with strings attached or instructions on how to spend it? I’ve heard it was being spent in the stock market, but where is the evidence or proof?
The actions of the Fed have contributed greatly to the rally. As long as they continue, the party will go on. They say they won’t back down until economic indicators like employment improves, so for the market, bad news is good news!
http://www.freerepublic.com/focus/f-news/3003400/posts
Here is something on what higher interest rates will do to our present “boom”