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Comment by heimatau | Hacker News Reader

This is not true. The mega-wealthy aren't needing to sell their assets because the Fed is doing unlimited QE. Since the mega-wealthy own most stocks, they don't need the liquidity when their "stable" investments are backed by the Federal Reserve's unlimited free money program. This is crony capitalism.

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Wouldn't the mega-wealthy be the ones who'd be least likely to need to sell anyway? Versus people with investments that they want to liquidate for a buffer after losing a job, or retirement?

> Wouldn't the mega-wealthy be the ones who'd be least likely to need to sell anyway? Versus people with investments that they want to liquidate for a buffer after losing a job, or retirement?

Yes but...they want profit. They want to go UP...UP...UP...

So, if they felt that their entire portfolio is at risk, they'd cut and run. But since the mega-rich are too big to fail, they are now being (partially) subsidized by the Fed.

... The Fed hasn't bought a single share of stock.

The Fed is artificially keeping interest rates low allowing idiotic stock buybacks to continue for almost no cost, keeps the cost of investor speculation cheap and they are bailing out companies that have bad non-performing loans (banks included)...

The Fed's "Rube Goldberg activity" holds up the stock market...uuuuntil it doesn't.

Source: My black swan farm

> ... The Fed hasn't bought a single share of stock.

1. This is actually currently being debated within the Fed. 2. I didn't say the Fed is buying stocks. They are buying the stable assets that the mega-wealthy have in their portfolio. Mega-wealthy don't have all their eggs in one basket. The Fed in solidifying a portion of their basket which allows mega-wealthy to retain the added risk in the markets.

When you throw extra demand in a market, prices go up all across the board, not equally though.

As for this particular situation, Fed buys corporate bonds, making companies less risky for stockowners. They also push those yields down, so capital goes to stocks to seek better returns.