
Apple is now worth 1.5T dollars - headalgorithm
https://arstechnica.com/gadgets/2020/06/today-apple-became-the-first-us-company-worth-1-5-trillion/
======
seibelj
With the Fed setting interest rates at 0% through 2022[0], all equities will
continue to rise in our nothing-fails, free-money, inflationary economy.

[0] [https://www.wsj.com/articles/fed-debates-how-to-set-
policy-f...](https://www.wsj.com/articles/fed-debates-how-to-set-policy-for-
the-post-pandemic-economy-11591781402?mod=hp_lead_pos2&mod=hp_lead_pos1)

~~~
cko
It seems to me that assets are inflationary and consumer products are somewhat
deflationary.

Most people don't own assets, so even if the Fed gives money directly to
consumers (e.g. UBI), that money will be just enough to live on, and trickle
up to the asset owning class.

~~~
chrisseaton
> Most people don't own assets

Almost everyone owns a pension.

------
beezle
Thank the Fed for this bubble explosion. All those bonds they've been buying?
What do you think happens with that loot?

BTW -

MSFT 1495B AMZN 1320B GOOG 1002B

TSLA 188B (QCOM+AXP)

(edit grammar)

~~~
chrisseaton
I thought the government _sold_ bonds in an emergency, not _bought_ them? Who
are they buying them from?

~~~
MagnumOpus
The treasury issues (sells) bonds and t-bills to banks/asset managers/random
people, in order to get money to give away in bailouts and handouts. The
Federal Reserve increases its balance sheet ("prints money") and buys bonds
and t-bills in order to keep demand high and interest rates low.

(Net net this causes the value of the dollar to drop and to devalue against
"real assets" like company shares, real estate and commodities. This "asset
price inflation" is a desired side effect.)

~~~
beezle
That's not really what has happened here.

Asset/fund managers buy all types of fixed income instruments - government
bills, notes, bonds, municipals debt, corporate debt, mortgages, bank loans,
on and on.

During the mayhem in late Feb/early March the secondary market for any and all
of that debt for all intents vanished. This left many funds in difficult
positions - their cash reserves are low and not sufficient to meet large daily
redemptions therefore they need to sell assets they own. Those that also owned
equities/commodities (balanced style funds) sold those more liquid assets,
adding fuel to that dumpster fire. However, debt only funds were still left
with no where to go.

Thus the Fed stepped in and agreed to purchase exceedingly large amounts of
debt instruments - pretty much anything rated investment grade. Thus the Fed
monetized those holdings and we are now seeing that cash pushing up equity
prices.

The above is a little bit over simplified and leaves out many other players
(ie repo problems)

Also - the Treasury issues debt every week to meet the regular financial
obligations of the US government, not just for special needs (various
bailouts)

------
zwieback
I had an Apple ][ in the 80s, (the last Apple product I loved unconditionally)
and I told my dad "we should buy stock, it'll be great". Unfortunately, I had
no money then.

~~~
cko
It's ok. If you had money you may have bought some stock, but it's less likely
you would have held onto it this whole time.

~~~
zwieback
Very true - I remember the crisis before Jobs returned, probably would have
dumped it and bought Pets.com or something like that.

------
xtiansimon
I just want to take this moment to remind peeps:

"You can take my Mac when you pry my cold dead fingers off the mouse." Power
Computing circa 1996

------
mcphage
I think Apple reveals the upper limit of what Capitalism can produce. Worth
1.5 trillion dollars, with hundreds of billions in the bank, and what are they
doing with it? Stock buy-backs and dividends? They have tremendous margins,
and mostly high quality products, but they can't or won't leverage their
profits to either lower costs, or raise quality on their bad components. So
they're winning in the profit category, but can't seem to translate that into
winning elsewhere. More money seems to be only so useful, and they've crossed
that point.

~~~
PaulStatezny
I don't understand why you're being downvoted. I think this is an interesting
point. They're not cycling that money back into the economy, they're holding
onto it. Which, in general, is considered bad for the economy, no?

~~~
perl4ever
Their money doesn't represent resources sitting idle. The whole point of the
financial system is that there isn't $X trillion idle. The securities they own
are claims on stuff other people are using. Talking about cycling it back into
the economy is nonsense, because it isn't, can't be, taken out.

~~~
mcphage
> because it isn't, can't be, taken out

Well, they do when they issue stock buybacks and dividends.

~~~
perl4ever
How can that be? At the time the money is paid, nobody knows what the
recipient will use it for. So how can anyone be taking any specific material
stuff "out" of the economy? Apple doesn't pay dividends in, say, eggplants. If
you buy some with your dividend, they haven't been taken out of the economy
any more than anything that's consumed.

------
drannex
Definitely overly inflated.

------
nikolay
I just wonder how those Republicans who claim that Trump is fighting the Deep
State, part of which is the Fed, take the fact that the Fed actually supports
Trump for the upcoming presidential elections. Or maybe don't just don't see
what's going on...

