Replies to post #124787 on Biotech Values

[BTH]

Hell. Just give every family a check for $50,000 to spend on stuff. That outta take care of it. Talk about goosing the economy.

[zipjet]

OT

Why should the Fed care to game the market??? How does that actually help the economy?

Consumer spending accounts for about 70% of GDP. The top 5% of consumers by income, account for 20% of consumption spending or 14% of GDP. This subset of consumers is market sensitive and will back down their spending when investments are in the trash. 14% of GDP is a big deal. If this group cuts back their spending by 1/3 it could lead to another ~3M people losing their jobs.

ij

[10nisman]

OT

Why should the Fed care to game the market??? How does that actually help the economy?

Not really gaming the system but taking advantage of the sell-off to buy great american companies at attractive prices. From an economic standpoint, it helps owners of equities feel richer and more confident about their financial position and thus more likely to spending money and invest. I don't recall any time in history when higher equity prices ever hurt the economy. Plus, the Fed stands to make decent long-term returns buying at or near current multiples.