Re:IBM Stops Buybacks to Pay for Red Hat
by marcosdumay on Saturday August 10, 2019 @11:54AM
(#20662732)
> What specific federal funds rate would make stock prices "supported by fundamentals" rather than "inflated"
Well, zero is kind of a special number. Anything significantly different from zero should create a very different dynamic (with a hyperbolic reaction of the market the closer you get to zero).
That said, the stock market is never "supported by fundamentals" like the GP wants. Also, just because the interest rate is low, it does not mean that all companies are under water. Besides, I don't think anybody already knows the consequences of zero interest rates well enough to say with certainty that it's bad, but it's different from non-zero.
Well, zero is kind of a special number. Anything significantly different from zero should create a very different dynamic (with a hyperbolic reaction of the market the closer you get to zero).
That said, the stock market is never "supported by fundamentals" like the GP wants. Also, just because the interest rate is low, it does not mean that all companies are under water. Besides, I don't think anybody already knows the consequences of zero interest rates well enough to say with certainty that it's bad, but it's different from non-zero.