This was a great important lesson for me! Thank you mr. Fisher! I just finished "common stocks - uncommon profits" you fisher guys are great. Greets from Austria
I understand that the greater the spread between short and long term interest rates the more banks will be willing to lend thus stimulating the economy, but won’t higher long term rates give investors an incentive to buy bonds over stocks which will send the market lower? We saw this happen to FAANG stocks however many months ago now when rates pushed up… the greater the risk free rate the lower DCF are, pushing valuations lower. I believe this is the fear investors have…
I imagine with investors and banks buying bonds and driving the price up it will reduce the rates/yield and will cause people to buy stocks after due to the reduced benefit with bond prices higher.
Yeah I read you in the book in many books but I have a question. Doesn’t quantitive easing raise the stock market ? Maybe I have no clear understanding between stimulus effect and stock prices.
Well said. Your knowledge and transparency is refreshing in a world full of noise. Thank you for the value you have added to me and countless others. Following in your father’s footsteps, I am sure he would of been very proud.
Emil Kalinowski and Jeff snyder .. Euro-Dollar universe. Thanks Ken, I'll read your papers of the past. I wonder if Jeff Snyder has been following you all along. My deepest sympathies for that finger! You smashed it real good! 😁
You may be right. I mean it is the Austrians vs. MMT. Which will win out? I don't know. I know that after not having gone shopping at my favorite Walmart for a while, had the covid, that prices there are up and up. Everything from paper plates to shampoo, to dog food, to carpet cleaner, to Alka Seltzer. I keep a spreadsheet. So we'll see if it's crack up boom, or magic money with it's own intrinsic value. I have to admit MMT sounds like a better way to go.
First of all, it surprises me that a Ken Fisher video on QE tapering doesn't have millions of views. But let's go... I can agree, to a degree, that QE is NOT an inflationary driver from the consumer perspective, in a sense that: this cheap QE money isn't being lent to the average person. Therefore, how would people pay more for goods? They won't. But... QE also sets the benchmark to corporate bonds, so that, in fact, companies- specially the big ones - have easier access to money. (And that's why it's so perverse, but that's a whole other topic). So, how would tapering QE be good for stocks in general? Since it would make the (companies') access to money more difficult? I could only think of a group of companies that would "benefit" from it: those who lend. With QE tapering, they will face higher demand.
Great content yet again from Ken Fisher! .... Ken's Book, The Only Three Questions That Count, will eventually be regarded as one of the best investment books of all time, if not THE best. It just takes people a little bit of time to figure things out, like QE :)
Very enlightening and thanks. Just about every so called expert on various finance channels has been predicting massive stock drops when the QE stops for some time now, so its good to understand why this won't happen for this reason.
Great insight! Ive never thought of it. So Tapering is a good sign to some extent. But what about interest rate? Interest rate would be eventually going up after tapering. Is it still a good sigh? So bank can earn more profit by lending money on high interest? ( people not borrowing due to high interest VS people borrowing as interest still low even though its gone up higher than before) Im bit confused as there are many after- assumptions regarding the interest going up scenario. It could be good and bad right? I cannot conclude the only one side
QE is contractionary and deflationary on the real economy. It is very much inflationary on financial markets. For years, generous monetary policy has financialized society by favoring those who held capital to the detriment of all others: we have lived for over a decade with inflated financial markets and the real economy in deflation. Now this mechanism no longer holds. Now that the central banks are retreating, the market is doing its job again. I find it dangerous for you to say that QE cannot have negative effects.
This was a great important lesson for me! Thank you mr. Fisher! I just finished "common stocks - uncommon profits" you fisher guys are great. Greets from Austria
I understand that the greater the spread between short and long term interest rates the more banks will be willing to lend thus stimulating the economy, but won’t higher long term rates give investors an incentive to buy bonds over stocks which will send the market lower? We saw this happen to FAANG stocks however many months ago now when rates pushed up… the greater the risk free rate the lower DCF are, pushing valuations lower. I believe this is the fear investors have…
I imagine with investors and banks buying bonds and driving the price up it will reduce the rates/yield and will cause people to buy stocks after due to the reduced benefit with bond prices higher.
False fears are always bullish.
Thank you so much for a great investing quote again!
Yeah I read you in the book in many books but I have a question. Doesn’t quantitive easing raise the stock market ? Maybe I have no clear understanding between stimulus effect and stock prices.
So if they buy less bonds. The price of bonds will go down. So then long term intrest rates on bonds will go up? Do I understand this correct ?
Well said. Your knowledge and transparency is refreshing in a world full of noise. Thank you for the value you have added to me and countless others. Following in your father’s footsteps, I am sure he would of been very proud.
Emil Kalinowski and Jeff snyder .. Euro-Dollar universe. Thanks Ken, I'll read your papers of the past. I wonder if Jeff Snyder has been following you all along. My deepest sympathies for that finger! You smashed it real good! 😁
You may be right. I mean it is the Austrians vs. MMT. Which will win out? I don't know. I know that after not having gone shopping at my favorite Walmart for a while, had the covid, that prices there are up and up. Everything from paper plates to shampoo, to dog food, to carpet cleaner, to Alka Seltzer. I keep a spreadsheet. So we'll see if it's crack up boom, or magic money with it's own intrinsic value. I have to admit MMT sounds like a better way to go.
First of all, it surprises me that a Ken Fisher video on QE tapering doesn't have millions of views.
But let's go...
I can agree, to a degree, that QE is NOT an inflationary driver from the consumer perspective, in a sense that: this cheap QE money isn't being lent to the average person. Therefore, how would people pay more for goods? They won't.
But... QE also sets the benchmark to corporate bonds, so that, in fact, companies- specially the big ones - have easier access to money. (And that's why it's so perverse, but that's a whole other topic).
So, how would tapering QE be good for stocks in general? Since it would make the (companies') access to money more difficult?
I could only think of a group of companies that would "benefit" from it: those who lend. With QE tapering, they will face higher demand.
Economics explained with a financial flare. FI learning at its best. Thank you Ken.
Thanks for clarifying. This is a very important point.
Thank you for your time Ken!
Great content yet again from Ken Fisher!
.... Ken's Book, The Only Three Questions That Count, will eventually be regarded as one of the best investment books of all time, if not THE best. It just takes people a little bit of time to figure things out, like QE :)
Started watching your content many thanks Cheers Frank G Melbourne Australia 🇦🇺
Thx Ken! The Bull lives!
Very enlightening and thanks. Just about every so called expert on various finance channels has been predicting massive stock drops when the QE stops for some time now, so its good to understand why this won't happen for this reason.
But does it create more risk?
Great insight! Ive never thought of it. So Tapering is a good sign to some extent.
But what about interest rate? Interest rate would be eventually going up after tapering. Is it still a good sigh? So bank can earn more profit by lending money on high interest? ( people not borrowing due to high interest VS people borrowing as interest still low even though its gone up higher than before)
Im bit confused as there are many after- assumptions regarding the interest going up scenario. It could be good and bad right? I cannot conclude the only one side
Amazing stuff!
Isn't reverse repo actually fancy way of saying selling bonds?
Thanks you for explaining.
so thankful for your insights
Thank you,
Thank you Ken!
Great content!
Great insight!
Thank you!
Great Video Thank you
That's an eye opener!
Good insight for me
wow.. that view is very spectacle..
It's all good.
Thank you Mr Fisher- once again. Glad to hear it's a false fear- better get my shopping list ready as we are selling off today. See min 5
Amen
Please talk to us about Evergrande!...
Bonjour
QE is contractionary and deflationary on the real economy. It is very much inflationary on financial markets. For years, generous monetary policy has financialized society by favoring those who held capital to the detriment of all others: we have lived for over a decade with inflated financial markets and the real economy in deflation. Now this mechanism no longer holds. Now that the central banks are retreating, the market is doing its job again. I find it dangerous for you to say that QE cannot have negative effects.
Started watching your content many thanks Cheers Frank G Melbourne Australia 🇦🇺