Re:IBM Stops Buybacks to Pay for Red Hat
by gridlockd on Saturday August 10, 2019 @03:27PM
(#20664042)
> That's very unicausal explanation that puts all blame for Fed.
That's a fair point and that wasn't my intention, but you can only fit so much context into a comment. I'm not even saying they're "doing it wrong", but that they are in a pickle. Of course interest rates are low globally and it's not just domestic capital bidding up prices.
> In the US the amount of money in mutual funds, hedge funds, ETFs, insurance companies, 401Ks etc has exploded while supply has decreased.
Well alright, but why has it exploded? Why do all these allocations into riskier asset classes take place? Is it all just greed, or is it the interest rate environment?
The secular decline in real interest rates over almost 40 years is global phenomenon. Increasing demand for safe and liquid assets and decline in world economic growth might be factors.
In the US the amount of money in mutual funds, hedge funds, ETFs, insurance companies, 401Ks etc has exploded while supply has decreased. The number of listed stocks in US markets has dropped dramatically. This is genuine change in supply and demand.