Profits Are Booming. Why Aren’t Jobs? Low Interest Rates To Blame?
Sunday, January 9, 2011 - 8:23 AM
New York Times article looks into the question of why the unemployment rate has been slow to fall as corporate profits have been rising. It's interesting to see one possible reason relates to the low interest rates:
Interest rates are so low that traders can pile up profits by exploiting the spread between a near-zero funds rate and rates on Treasury bonds. This allows some corporations to mark profits without selling much or hiring anyone.
Ken Tumin5,441 posts since Nov 29, 2009 Rep Points: 123,664