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3) Again, it's not clear how actions like QE would really prop up a stock market. Nor would that seem necessary, since (again) the corporations are reporting huge profits and sitting on big cash hoards.
Have you looked at the Fed balance sheet vs. the S&P 500 here? They move in lockstep.
Depends which companies. Most hoard cash because debt is cheap. Once QE is done, noone will want to accumulate debt and we will see the cash reserves being used again.Actually, it suggests that the companies aren't interested in accumulating debt (a practice that contradicts your implication that Fed lending policies are encouraging stock buybacks). There's plenty they could spend it on, such as improving wages or making capital improvements. Regardless of the rationale, it makes the company's bottom line look better, and is a reason for high stock prices, unrelated to Fed actions.
The bad weather doesn't explain it all, but it's a big chunk. More to the point is that one quarter with a -1% GDP growth is not an indicator that the entire economy is going to hell in a handbasket (as the OP implies). Nor have you actually articulated which indicators are currently negative.
The weather doesn't prevent people from doing anything. It just happens to be a good scapegoat. I bought a house in December. The weather didn't enter my mind when deciding this. I don't see how people can just accept this as the reason for most of the downturn in consumption.
The two big losers for GDP are:
1. Net trade, or the combination of exports and imports, declined from -0.83% to -0.95%, far below the positive boost of 0.99% in Q4.
2. The biggest hit was in the change in private inventories, which tumbled from -0.57% in the first revision to a whopping -1.62%: the biggest contraction in the series since the revised -2.0% print recorded in Q4 2012.
Remember, we were told by the economists that Q1 would be great. Then they blamed the weather when the numbers weren't there. :roll: So when it is 90-100 degrees outside this summer will they blame the weather again?
3) It is slightly ridiculous to suggest that anyone intentionally started a housing bubble to cover for a stock market crash. You're looking at nearly 8 years of Fed policies of keeping interest rates low, with wide-spread resistance to the Fed raising any rates. Plus, again, many other factors had nothing to do with any government policies.
In terms of "moral hazards," it's worth noting that before the modern Fed was created, the banks often bailed each other out in similar crisis. Oddly enough, no one seemed to fear the moral hazard when private banks were taking on the role of the "lender of last resort." Hmmm.![]()
I agree if you are saying the FED is the cause of all the financial problems in this country. Along with the lack & easing of regulations for the financial industry during and ever since the Greenspan years.