Wealth Effect

One driver of the world's stock market is

called the "wealth effect" where the Fed prints
lots of money and and pushes down interest rates.

The expected result is that investors will change
their choice by making more investments in risky

stocks and less in safer bonds.

The hope is that this change in investments will

stimulate the economy. At least that's the theory.

While stocks have gone up from the Fed's QEs

and Japan's cash injections, has the stimulation

happened?  Hard to tell.  Lots of the extra money is

being held by banks instead of being lent out. Plus
a lot of the stock gains hasn't escaped the stock
markets as traders have mainly bought not sold.

By the way, the political slogan of "trickle down"

sounds related.  That slogan was popularized by

a speechwriter of FDR against the theory of that

era that urged high-paying jobs instead of many

low-paying jobs.  Now some mouth off on being

anti trickle down but for "living wage"...