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Matt's Market Insights

It's easy to invest in stocks when you know the Fed has your back. You do realize the Fed has our back, right? The Fed doesn't always operate in wealth creation mode, but that's the game right now so it pays to play along ... literally.

 

Prior to the great recession, household wealth, defined as the value of homes, stocks, and other assets minus debt (mortgages, credit card debt etc.) was $68.8 trillion. In the ensuing collapse a significant portion of that wealth evaporated, 19% to be specific. In early 2009, as home prices fell and the stock market bottomed, household wealth dropped to $55.6 trillion. Poof! ... $13 trillion went up in smoke.

 

In came the Fed, anxious to reinflate that wealth and spur the economy back into action. Low rates, combined with exotic stimulus measures and the soothing words of forward guidance, began to take effect, slowly building pressure under home and ... Log in or subscribe to continue reading.


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