Fed buying stocks and corporate bonds

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ochotona
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Re: Fed buying stocks and corporate bonds

Post by ochotona » Fri Apr 10, 2020 3:27 am

Just substitute HYG for TLT niw
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Re: Fed buying stocks and corporate bonds

Post by mathjak107 » Fri Apr 10, 2020 7:35 am

i said i really liked the high yield sector.

hyg was up almost 6% yesterday plus pays 7-8% interest
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Re: Fed buying stocks and corporate bonds

Post by pmward » Fri Apr 10, 2020 8:39 am

I Shrugged wrote:
Thu Apr 09, 2020 11:02 pm
I agree with pmward. Gold isn't on the radar. It could be taxed in a zombie desperation world, I suppose.

However, to disagree with myself, some have said the US could go back on a gold standard as a painful cure at some point. Peg gold at $5000 per ounce or some such number. If that happened, I'm sure the existing holders would not get away without being hammered somehow.

OK, so there are two completely opposite opinions, LOL!
Time to go to bed, I guess.
I do actually agree with you. If they did lose control of the currency, going back on a gold peg... at least temporarily until things settle and confidence is returned, is *FAR* more likely than gold confiscation. This would initially be good for people holding gold as the would do it in conjunction with a devaluation, so your gold would go overnight from say 1600-3000... but once the peg was set, the peg would be set, so gold would no longer be a volatile asset to hold and profit from, it would be essentially the same as holding cash.
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Re: Fed buying stocks and corporate bonds

Post by doodle » Tue Apr 14, 2020 1:48 pm

mathjak107 wrote:
Fri Apr 10, 2020 7:35 am
i said i really liked the high yield sector.

hyg was up almost 6% yesterday plus pays 7-8% interest
Basically same safety as treasury bonds since corporotocracy has decided that we as a society are going to be collectively responsible for bailing out the largest most powerful corporations that have existed since the gilded age. Same will happen probably when all the beach side mansions begin to flood in Miami. Privatize profits and collectivize loses...wonderful living in a society where money has such strong influence on government. Why are so few outraged by what is happening?
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Re: Fed buying stocks and corporate bonds

Post by ochotona » Tue Apr 14, 2020 2:32 pm

doodle wrote:
Tue Apr 14, 2020 1:48 pm
mathjak107 wrote:
Fri Apr 10, 2020 7:35 am
i said i really liked the high yield sector.

hyg was up almost 6% yesterday plus pays 7-8% interest
Basically same safety as treasury bonds since corporotocracy has decided that we as a society are going to be collectively responsible for bailing out the largest most powerful corporations that have existed since the gilded age. Same will happen probably when all the beach side mansions begin to flood in Miami. Privatize profits and collectivize loses...wonderful living in a society where money has such strong influence on government. Why are so few outraged by what is happening?
Use the S word.... "Socialize" the losses. There it is.
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Re: Fed buying stocks and corporate bonds

Post by CT-Scott » Tue Apr 14, 2020 2:42 pm

doodle wrote:
Tue Apr 14, 2020 1:48 pm
Why are so few outraged by what is happening?
I'm outraged, too. But I realize I'm powerless to change any of it. We're just "subjects" in this empire. The best we can do, especially as people who recognize the depravity of it, is to try to figure out how we can best protect our family and wealth, and possibly increase our wealth, as we interpret some of what is going on and what the impacts might be. But I still feel pretty ignorant as to things I can do to capitalize on it personally. Ideas?
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Re: Fed buying stocks and corporate bonds

Post by pmward » Tue Apr 14, 2020 3:07 pm

CT-Scott wrote:
Tue Apr 14, 2020 2:42 pm
But I still feel pretty ignorant as to things I can do to capitalize on it personally. Ideas?
100% VTSAX >:D
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Re: Fed buying stocks and corporate bonds

Post by CT-Scott » Tue Apr 14, 2020 3:27 pm

pmward wrote:
Tue Apr 14, 2020 3:07 pm
CT-Scott wrote:
Tue Apr 14, 2020 2:42 pm
But I still feel pretty ignorant as to things I can do to capitalize on it personally. Ideas?
100% VTSAX >:D
Not sure if you're joking or being serious. The Fed is certainly artificially propping up stock prices right now, but we haven't even seen the medium-term impact to the real economy yet. Do you believe that that won't matter and all of this money-printing will result in stocks continue going higher? Picking specific winners and losers seems like it might be easier/smarter than VTSAX right now. Or, staying out of stocks altogether until the real crash comes.
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Re: Fed buying stocks and corporate bonds

Post by CT-Scott » Tue Apr 14, 2020 3:28 pm

CT-Scott wrote:
Tue Apr 14, 2020 3:27 pm
pmward wrote:
Tue Apr 14, 2020 3:07 pm
CT-Scott wrote:
Tue Apr 14, 2020 2:42 pm
But I still feel pretty ignorant as to things I can do to capitalize on it personally. Ideas?
100% VTSAX >:D
Not sure if you're joking or being serious. The Fed is certainly artificially propping up stock prices right now, but we haven't even seen the medium-term impact to the real economy yet. Do you believe that that won't matter and all of this money-printing will result in stocks continuing to go higher? Picking specific winners and losers seems like it might be easier/smarter than VTSAX right now. Or, staying out of stocks altogether until the real crash comes.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Tue Apr 14, 2020 3:37 pm

CT-Scott wrote:
Tue Apr 14, 2020 3:28 pm
Not sure if you're joking or being serious. The Fed is certainly artificially propping up stock prices right now, but we haven't even seen the medium-term impact to the real economy yet. Do you believe that that won't matter and all of this money-printing will result in stocks continuing to go higher? Picking specific winners and losers seems like it might be easier/smarter than VTSAX right now. Or, staying out of stocks altogether until the real crash comes.
If you can't beat em', join em'. I mean if you want to be on the right side of the increasing wealth gap, you should own the assets that respond most to the Fed and congress continuing to increase that gap.

Also, I should mention I am short term bearish... but on the long term I'm very bullish. The question you have to ask yourself is this: if the Fed and congress can print and inject infinite dollars, what amount of dollars is required to diverge stocks from the economy? There definitely is such a level. Are we over or under that level? Also, always be careful with assuming that a crash is coming. The pitching being thrown by markets right now is much more difficult to hit than that. Half the people I follow are super bearish and think there is no place to go but down... half are super bullish and think there is no place to go but up. These are very smart, educated, and experienced people, and all have logical arguments that make sense. Yet, one of those two groups is going to prove to be spectacularly wrong. This isn't a bet on or against the economy at this point... this is a bet on or against the Fed and congresses ability to print and give enough money away to cause the stock market to go up in spite of the economic damage.
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Re: Fed buying stocks and corporate bonds

Post by mathjak107 » Tue Apr 14, 2020 4:41 pm

A lot of what stocks do over the near term is going to be about their bottom lines

Remember cost cutting goes right to the bottom line , laying off people , furloughing workers , cutting dividends , cutting capital spending. Goes right to the bottom line ..

Wall Street is a game based on beating earnings expectations..you don’t need to do well , all you need to do is to do less bad and markets go up .

This is why malkiel in his book a random walk down Wall Street found there is no link between earnings doing well and market gains .

Markets have their biggest gains while corporations actually have negative earnings
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Re: Fed buying stocks and corporate bonds

Post by vnatale » Tue Apr 14, 2020 5:56 pm

pmward wrote:
Tue Apr 14, 2020 3:37 pm
The pitching being thrown by markets right now is much more difficult to hit than that.
You have prior revealed yourself here to be a baseball fan?

Vinny
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Re: Fed buying stocks and corporate bonds

Post by pmward » Tue Apr 14, 2020 6:25 pm

vnatale wrote:
Tue Apr 14, 2020 5:56 pm
pmward wrote:
Tue Apr 14, 2020 3:37 pm
The pitching being thrown by markets right now is much more difficult to hit than that.
You have prior revealed yourself here to be a baseball fan?

Vinny
I'm a Tigers fan. The pitching being thrown by the stock market right now is like trying to hit the Tigers starting pitching a few years back when we had Verlander, Scherzer, and Price as our top 3 starters LOL. Still can't believe we didn't win a World Series with that lineup...
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Re: Fed buying stocks and corporate bonds

Post by vnatale » Tue Apr 14, 2020 6:30 pm

pmward wrote:
Tue Apr 14, 2020 6:25 pm
vnatale wrote:
Tue Apr 14, 2020 5:56 pm
pmward wrote:
Tue Apr 14, 2020 3:37 pm
The pitching being thrown by markets right now is much more difficult to hit than that.
You have prior revealed yourself here to be a baseball fan?

Vinny
I'm a Tigers fan. The pitching being thrown by the stock market right now is like trying to hit the Tigers starting pitching a few years back when we had Verlander, Scherzer, and Price as our top 3 starters LOL. Still can't believe we didn't win a World Series with that lineup...
Buck Showalter constantly brings up how his Orioles beat in the post season the Tigers who had a trio of Cy Young Award winners. The catch is that I think only one of the three was that great that year. And, as they say time flies! With as bad and for long as the Orioles have been bad, it's been a lot more than a "few years".

Vinny
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Re: Fed buying stocks and corporate bonds

Post by Mark Leavy » Tue Apr 14, 2020 6:34 pm

pmward wrote:
Tue Apr 14, 2020 3:37 pm
...

If you can't beat em', join em'. I mean if you want to be on the right side of the increasing wealth gap, you should own the assets that respond most to the Fed and congress continuing to increase that gap.

Also, I should mention I am short term bearish... but on the long term I'm very bullish.

...
That's how I'm betting also. I expect a gut churning roller coaster ride in the short term, but I will hang on tight - and not fight the feds.
And if the printing presses don't win, then that yellow metal I have should be worth something.
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Re: Fed buying stocks and corporate bonds

Post by CT-Scott » Tue Apr 14, 2020 6:45 pm

pmward wrote:
Tue Apr 14, 2020 3:37 pm
If you can't beat em', join em'. I mean if you want to be on the right side of the increasing wealth gap, you should own the assets that respond most to the Fed and congress continuing to increase that gap.
OK, so let's start there. Which stocks/companies, in particular, would you recommend? Companies like Wells Fargo and various big banks that just sounded some alarms, but are most likely to benefit from the corporatism bail-out? Others?
pmward wrote:
Tue Apr 14, 2020 3:37 pm
Half the people I follow are super bearish and think there is no place to go but down... half are super bullish and think there is no place to go but up. These are very smart, educated, and experienced people, and all have logical arguments that make sense. Yet, one of those two groups is going to prove to be spectacularly wrong.
Or they're both equally right/wrong and we're going to see a mostly flat economy for quite some time (though possibly up/down significantly in any given day/week).

Or this is truly unprecedented and is the start of the end of the US Empire.

On a more "optimistic" outlook, one thing I often remind myself of is that the USA is still the only country with military bases across the entire globe, with the ability to nuke any and every country. As a Christian, I find war and militarism abhorrent, but as an American citizen who worries about my family and my finances, this can bring me some sense of calm (as much as I'm ashamed to admit it). The USA can print money at will, and can point a gun at other countries to make sure it remains the world's currency. The biggest factor that can cause that system to fail will be if/when the grunts in the military say "no more." With the power of the internet and the ability to share news/info outside of the mainstream media (propaganda), that could eventually be in jeopardy. But the state/media has continued to demonstrate their expertise at pitting the common man against one other, and diverting them from realizing that their true enemy is the state.

So as long as we have this false left/right conflict, and the USA is the world police, perhaps I should be more optimistic that the government & Fed's actions won't totally destroy our way of life, and maybe I should be more optimistic about medium-term stock values.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Tue Apr 14, 2020 6:54 pm

CT-Scott wrote:
Tue Apr 14, 2020 6:45 pm
pmward wrote:
Tue Apr 14, 2020 3:37 pm
If you can't beat em', join em'. I mean if you want to be on the right side of the increasing wealth gap, you should own the assets that respond most to the Fed and congress continuing to increase that gap.
OK, so let's start there. Which stocks/companies, in particular, would you recommend? Companies like Wells Fargo and various big banks that just sounded some alarms, but are most likely to benefit from the corporatism bail-out? Others?
The money does go to banks, but from there it finds it's way all over the place. My best advice, look at what has been winning for the last 10 years since we started this. Follow those trends, as they are likely to continue to win until these policies change and we enter a true paradigm shift. What will work after the next paradigm shift? Your guess is as good as mine, but I would say that having an allocation to gold would probably not be a bad thing.

CT-Scott wrote:
Tue Apr 14, 2020 6:45 pm
pmward wrote:
Tue Apr 14, 2020 3:37 pm
Half the people I follow are super bearish and think there is no place to go but down... half are super bullish and think there is no place to go but up. These are very smart, educated, and experienced people, and all have logical arguments that make sense. Yet, one of those two groups is going to prove to be spectacularly wrong.
Or they're both equally right/wrong and we're going to see a mostly flat economy for quite some time (though possibly up/down significantly in any given day/week).

Or this is truly unprecedented and is the start of the end of the US Empire.

On a more "optimistic" outlook, one thing I often remind myself of is that the USA is still the only country with military bases across the entire globe, with the ability to nuke any and every country. As a Christian, I find war and militarism abhorrent, but as an American citizen who worries about my family and my finances, this can bring me some sense of calm (as much as I'm ashamed to admit it). The USA can print money at will, and can point a gun at other countries to make sure it remains the world's currency. The biggest factor that can cause that system to fail will be if/when the grunts in the military say "no more." With the power of the internet and the ability to share news/info outside of the mainstream media (propaganda), that could eventually be in jeopardy. But the state/media has continued to demonstrate their expertise at pitting the common man against one other, and diverting them from realizing that their true enemy is the state.

So as long as we have this false left/right conflict, and the USA is the world police, perhaps I should be more optimistic that the government & Fed's actions won't totally destroy our way of life, and maybe I should be more optimistic about medium-term stock values.
Look back at all that happened in the 1900s. WWI, WWII, the Great Depression, the great stagflation, the Cold War, Vietnam, etc. We are talking a lot of truly scary times. Look at how well the stock market performed on the whole through all of that. Now look at what we are facing today. I think if we could make it through all those things just fine, we will make it through the virus and the Fed printing just fine. Sure, there will be repercussions, but the world is not going to end, the U.S. will not collapse, and stocks will continue to go up over time.
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Re: Fed buying stocks and corporate bonds

Post by doodle » Wed Apr 15, 2020 9:17 am


Look back at all that happened in the 1900s. WWI, WWII, the Great Depression, the great stagflation, the Cold War, Vietnam, etc. We are talking a lot of truly scary times. Look at how well the stock market performed on the whole through all of that. Now look at what we are facing today. I think if we could make it through all those things just fine, we will make it through the virus and the Fed printing just fine. Sure, there will be repercussions, but the world is not going to end, the U.S. will not collapse, and stocks will continue to go up over time.
Don't understand this from a data perspective. On a real basis stocks have had periods of nearly 50 years of nearly flat returns. If anything the 1980s to present have marked a divergence from trend.

Image
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Re: Fed buying stocks and corporate bonds

Post by shekels » Wed Apr 15, 2020 10:47 am

doodle wrote:
Wed Apr 15, 2020 9:17 am

Look back at all that happened in the 1900s. WWI, WWII, the Great Depression, the great stagflation, the Cold War, Vietnam, etc. We are talking a lot of truly scary times. Look at how well the stock market performed on the whole through all of that. Now look at what we are facing today. I think if we could make it through all those things just fine, we will make it through the virus and the Fed printing just fine. Sure, there will be repercussions, but the world is not going to end, the U.S. will not collapse, and stocks will continue to go up over time.
Don't understand this from a data perspective. On a real basis stocks have had periods of nearly 50 years of nearly flat returns. If anything the 1980s to present have marked a divergence from trend.

Image
I am very grateful that I was not born during the1900s. WWI, WWII, the Great Depression, but I did live through parts of the rest.
It is a matter of timing. It is a lot different to see what was happening, compared to actually having lived through it.
One thing I consider also, during those hard times. Who had any spare funds to invest in the stock market?
¯\_(ツ)_/¯
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Re: Fed buying stocks and corporate bonds

Post by vnatale » Wed Apr 15, 2020 11:18 am

shekels wrote:
Wed Apr 15, 2020 10:47 am
doodle wrote:
Wed Apr 15, 2020 9:17 am

Look back at all that happened in the 1900s. WWI, WWII, the Great Depression, the great stagflation, the Cold War, Vietnam, etc. We are talking a lot of truly scary times. Look at how well the stock market performed on the whole through all of that. Now look at what we are facing today. I think if we could make it through all those things just fine, we will make it through the virus and the Fed printing just fine. Sure, there will be repercussions, but the world is not going to end, the U.S. will not collapse, and stocks will continue to go up over time.
Don't understand this from a data perspective. On a real basis stocks have had periods of nearly 50 years of nearly flat returns. If anything the 1980s to present have marked a divergence from trend.

Image
I am very grateful that I was not born during the1900s. WWI, WWII, the Great Depression, but I did live through parts of the rest.
It is a matter of timing. It is a lot different to see what was happening, compared to actually having lived through it.
One thing I consider also, during those hard times. Who had any spare funds to invest in the stock market?
I think it was not until the 1980s that there was any significant amount of equity ownership among the general United States population. My father was born in 1913 and I know he never owned any.

Vinny
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Re: Fed buying stocks and corporate bonds

Post by Kriegsspiel » Wed Apr 15, 2020 11:44 am

shekels wrote:
Wed Apr 15, 2020 10:47 am
I am very grateful that I was not born during the1900s. WWI, WWII, the Great Depression, but I did live through parts of the rest.
It is a matter of timing. It is a lot different to see what was happening, compared to actually having lived through it.
One thing I consider also, during those hard times. Who had any spare funds to invest in the stock market?
In his diary (The Great Depression: A Diary), Benjamin Roth talks several times about how everybody knew stocks were going for fire sale prices, but nobody had the cash to buy them. IIRC the ones he generally talks about were local companies, like Youngstown Sheet & Tube, that he followed in the newspaper. It's a fascinating read.
You there, Ephialtes. May you live forever.
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Re: Fed buying stocks and corporate bonds

Post by pmward » Wed Apr 15, 2020 11:44 am

doodle wrote:
Wed Apr 15, 2020 9:17 am

Look back at all that happened in the 1900s. WWI, WWII, the Great Depression, the great stagflation, the Cold War, Vietnam, etc. We are talking a lot of truly scary times. Look at how well the stock market performed on the whole through all of that. Now look at what we are facing today. I think if we could make it through all those things just fine, we will make it through the virus and the Fed printing just fine. Sure, there will be repercussions, but the world is not going to end, the U.S. will not collapse, and stocks will continue to go up over time.
Don't understand this from a data perspective. On a real basis stocks have had periods of nearly 50 years of nearly flat returns. If anything the 1980s to present have marked a divergence from trend.

Image
I didn't say stocks had no volatility. I said they went up over time, in spite of all the fear that pretty much every decade of the 1900's had.
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Re: Fed buying stocks and corporate bonds

Post by Xan » Wed Apr 15, 2020 12:40 pm

Also, does that graph include dividends?
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Re: Fed buying stocks and corporate bonds

Post by mathjak107 » Wed Apr 15, 2020 3:19 pm

Not only don’t the raw numbers reflect dividends but during the Great Depression dividends ran as high as 14% ....

Plus it is real returns that count ...the Great Depression saw the CPI fall 18% as well as many popular stocks like ibm were doing very well but not in the indexes ....it actually took 4-1/2 years for one to recover in real return from the Great Depression...by the time the raw numbers in the index matched again you were far far ahead
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Re: Fed buying stocks and corporate bonds

Post by shekels » Mon Apr 27, 2020 6:30 pm

Myth vs Reality
What is the Central bank Really doing to support the Market
Are You Comforted?

https://youtu.be/HIMAr_QX6lM?t=1986
¯\_(ツ)_/¯
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