The Fed is just dumping money into the stock market. This is a very tenuous bubble.
What is the point of the stock market if the taxpayers continually bail out the losses for the wealthy. This is counterproductive.
The fed is dumping money into the bond market
They have never and have no current plans to purchase individual stocks Or even stock ETFs
The fed is acting as a lender of last resort because in March credit markets absolutely froze and liquidity dried up. That is a financial crisis in the making so the fed said if everyone else is too spooked then we will provide liquidity. The funny thing is, merely the act of saying they would buy bonds calmed markets almost instantaneously and normal borrowing/lending resumed
Central banks providing liquidity isn’t limited to America. It’s happening all over the world because illiquid markets have disastrous consequences for every day people, not just the wealthy. Think about how effected the average person was in 2008-2010 when the financial entities misbehaved so greatly. It wasn’t just banks and insurance companies that felt the hardship. It was the country.
I don’t like the zombie companies We are propping up and I hope the Fed doesn’t roll their debt continuously, but having that many defaults at once affects MUCH more than the wealthy. In fact, it could end up affecting some very wealthy People much less than the general public because the wealthy usually have advisors that have them shorting while the more modest retail investors continuously buy the dip and end up holding the bag
I think the Fed acted appropriately given the incredibly dire Unprecedented situation at hand, but I don’t want to see them continue to let these zombies suck at the teet when normal times realize.
My hope is that this was a temporary intervention and just gives the zombies a little bit more life support so they can die off spaced out over the coming years when they can’t pay their debt and no one will roll it for them. My fear is that the Fed rolls it for them and at that point too big to fail will apply to pretty much every company
Also a very important point is they are loans. The majority of companies getting them will pay them back and there will be no impact to the taxpayers. Some corporations got true free money, but the Fed’s bond buying program is intended to just provide liquidity, not relief