The FED and "federal" reserves in other countries have held bond interest low for some time and
it appears this will continue for the forseeable future. From a macro perspective this may make sense.
It allows both the refinancing of national debt at a lower rate and prolongs this eventual demographic
train wreck on the horizon -- robbing Peter to pay Paul. However, it has forced a lot of people to take
more risk in trying to supplement their current or estimated retirement income.
While the exchanges and market makers love it, as they have created numerous indexes and other
derivative products in order to generate more commissions, the fact these underlying indexes
and derivatives are made up of the same small number of companies (say 5000), means
everyone is chasing these same few companies.
I recently read an article that said three companies (Black Rock, Chase, and State Street)
control 80 percent of the market. If that is true, then stocks are either being churned within
their own portfolios or among these three companies. SO what do market actually prices reflect --
the estimated earning power of these 5000 companies -- or -- some artifically inflated price
just like LIBOR was?
Edited by dwnowhere1, 13 February 2020 - 01:13 PM.