[nightski]

The stock market recovery is not due to the government "buying the stock market" because they never did that.

If you look at winners and losers in the stock market, followed the Q2 earnings season and saw what companies were facing, it seems clear to me that our economy faced a transition rather than a crash. There are huge winners in this market. Home Depot, Target, and other major retailers all announced record breaking income this past quarter. People are still shopping. Tech has lead the charge due to WFH and the shift to online. There are many more factors in this economic shift than could be explained by the Fed's money printing.

[gruez]

>The stock market recovery is not due to the government "buying the stock market" because they never did that

Whether they directly bought stocks is irrelevant because money's fungible. They injected trillions of dollars into the economy[1]. If that drove institutional investors to stocks from treasuries/bonds (in search of higher returns), the effect is identical to them buying stocks directly.

[1] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...

[arkadiytehgraet]

Dude (or dudess or whatever), Fed literally has positions in all sorts of stocks, including bankrupt HTZ.

How is that not "buying the stock market"?

[throwawaygh]

Wrong.

Fed did not purchase a single share of HTZ.

They hold two ETFs that include Hertz corporate bonds. Not stocks. Bonds. And not new issues.

[divbzero]

Yeah GP has the facts wrong.

There has actually been interesting speculation that the Fed will eventually buy stocks similar to the Bank of Japan over the past few decades [1] but the Fed hasn’t done it yet.

[1]: https://www.forbes.com/sites/kevincoldiron/2020/07/18/the-fe...

(Edit: Maybe GP was thinking that bankruptcy could lead to debt converting into equity? But even then the Fed’s holding would be indirect and the bond ETF probably wouldn’t hold onto the equity.)

[jacobwilliamroy]

Nah, All these financiers are just getting caught up in semantics trying to ignore the reality of the situation. No the fed doesn't "own" anything, because they haven't "bought" anything.

The fact remains that they've spent over a trillion dollars on junk bonds and they are almost singlehandedly financing the entire economy right now.

[kbenson]

How much actual buying and selling have they done? How does that compare to a year ago? How does that compare to the market as a whole? Those are actually relevant, while the government just having some stock is not, so those are what we should be looking at.

[jacobwilliamroy]

Whatever helps you sleep at night. Just don't be surprised when you wake up tomorrow and can't afford to buy a loaf of bread with your american monopoly money.