US: Inequalities causing slower growth

[MadImmortalMan]

It depresses bond rates, which drives investment capital into stocks because investors are seeking yield. This increases buying demand in the market, pushing prices higher.

Stock market 101. Not even 101. You have to know that to get into preschool.

[CountDeMoney]

Still has nothing to do with companies suppressing wages.

[citizen k]

The Fed neither targets the equities markets nor does it buy stocks.

[MadImmortalMan]

The real thing to ask is not whether the easing was bad or helpful (it seems to have been nearly universally helpful) but what happens when bond rates normalize.

On a global perspective, we've been at historically large rates of debt for a historically long period of time. We're already outside of the normative historical range by a significant factor. The question about that is, will it normalize or is this a new normal? Is this time different?

Maybe everything will settle down and grow out of it or maybe there will be a 21st century Napoleputin and everyone will default.

[The Minsky Moment]

It depresses bond rates, which drives investment capital into stocks because investors are seeking yield. This increases buying demand in the market, pushing prices higher.

Stock market 101. Not even 101. You have to know that to get into preschool.

Except like most stock market related nostrums you learn in preschool, it doesn't necessarily hold.  If it did the S&P would not be stalling right now even though everyone recognizes there is a bubble in high yield debt and Treasuries yield squat.  The rotation is stalled.
Historically the correlation between interest rates and the S&P is not unambiguous.  Lower rates do tend to drive up P/E ratios because it implies a lower discount to future earnings, but of course the "E" part still has to be strong.  The circumstances matter.  Are low rates spurring investment or are they a symptom of flight to safety?
The yield channel you mention is problematic because what matters for asset class selection is directional movement - i.e. yields may be "low" but if the expectation is that bond prices will continue to rise, then it doesn't make sense to switch.  But the effect on discount rates still holds, so it is possible for bonds and stocks to do well at the same time.  It is not a simple binary choice.

I repeat - the Fed doesn't target the stock market.  They target inflation and employment.  If inflation is low the priority is growth.  If people believe the Fed will be successful then stocks will go up because that implies higher future earnings.  The Fed is not "pumping up the stock market".  Investors bid up stock higher because the Fed action is changing the perceived underlying fundamentals. 

[Ideologue]

Where's the exec summ?

Apparently we need to get more people in college.

[Ide] JDs for all! [/Ide]

How about rich families for all?  That's the Malthus way, and it's worked out for you.

[Eddie Teach]

JDs for some, tiny microscopes for others?

[CountDeMoney]

Where's the exec summ?

Apparently we need to get more people in college.

[Ide] JDs for all! [/Ide]

How about rich families for all?  That's the Malthus way, and it's worked out for you.

You tell 'em, Ide. 

We all can't win the "Lucky Sperm of the Month Club" lottery.

[derspiess]

We all can't win the "Lucky Sperm of the Month Club" lottery.

Check your privilege.

[Malthus]

Where's the exec summ?

Apparently we need to get more people in college.

[Ide] JDs for all! [/Ide]

How about rich families for all?  That's the Malthus way, and it's worked out for you.

My family was rich enough to get me a JD. 

[CountDeMoney]

We all can't win the "Lucky Sperm of the Month Club" lottery.

Check your privilege.

Check my ballsack luxuriously resting upon that massive forehead of yours, like the sun bathing the Bonneville Flats, but with pubes.

[derspiess]

Spoiled white boy.

[CountDeMoney]

Spoiled pubes.  Please, partake of them.

[derspiess]

You have some odd fantasies.

[Ideologue]

Where's the exec summ?

Apparently we need to get more people in college.

[Ide] JDs for all! [/Ide]

How about rich families for all?  That's the Malthus way, and it's worked out for you.

My family was rich enough to get me a ____. 

Fixed your post.