Stock Markets Exposed
Stock market crash implifications to the economy?
i was wondering due to the stock market fall of 5% what implications would this have to the economy?
Public Comments
- Personally, I believe we are in a recession. The dollar is weakened and if the market continues to get pounded we may be facing a worse recession and possibly depression.
- I watched an expert talking about this on the TV today. He said that stock market fluctuations are a barometer of sentiment amongst investors. If confidence is low then stocks go lower so the implications for the economy in that case are that investment in businesses will tail off and economic growth will therefore slow down.
- Hmmm... I would hardly call 5% fall a market crash. A 5% drop might cause some worries for an individual investor, but would probably not cause much of a ripple. But say it fell 25% or more, many investors may start pulling back their money from the market and look for safe havens like gold or government backed bonds. Technically the stock market is only one segment of the overall economy, but because it is in the news all the time and since more and more people own stocks, people might start getting spooked once they see stock market fall even if the overall economy might not be doing too bad.
- do u know what 'yellow dog' journalism is? a 5% correction is not a recession or 'crash'. the media sells snake oil to the commoners so they can swallow the garbage. the corrections in the market are causing people to reassess their fallacies that will be causing them pain in years to come. a recession is when the Growth is in a real negative not slow down. a crash is when industries close in mass .
- it is an very interesting question. Basically recession in economy is fueling the stock market crash and not other way round. If there is market crash, it affects indivudual interest - some people gain and others stand to lose. In bear market you are permitted to sell the stock at higher price and then buy at lower price - make a killing - do people always lose in bear market. One can make every happending as opportunity to become rich - none prevents. to the extent the stock valuation comes down overall capitalisation of market only comes down, the excess fat (Money) lost in stock market (say 600 or 900 billions) where it get disappeared. they go no where - it will be well within the economy. From stock equity market - it may go to commodity market or debt instruments, CD, etc., etc., It may marginally affect GDP - collection of direct tax, income tax may come down, since traders will be booking losses and adjust earlier profit. then why so much talk on STOCK MARKET CRASH. Reason is the investors are richest/mighty - they control media and Government to some extent - all these are making fuss, hue and cry - as crying baby only get milk. they create sympathy from regulators, Fed. Bank, Government and obtain concessions, lowering the interest, free-bees, etc., etc., large media coverage on STOCK MARKET CRASH consfuses the public, small investors, who with fear of losing little money left-out with draw from the market - at that time big inveters enter the market and average the price and get fair valuation of their stock position. Media is benefited with hot new and big investors are benefitted with new emerging opportunity. During Stock Market Crash small investors suffer and not country's economy or big (HNI) investors. ================= when there is force majure like flood, earth quake, etc., the sympathy will be only for one day. Farmers lose very heavily - is there any compensation offered to them - not even a lip sympathy. During industrial slow down lot of workers loses employment, is there any big news in the Media as stock market crash. Loss to Agricultural production, down sizing, loss of employment directly affect the economy - but there is no talk about it by mighty. During STOCK MARKET CRASH even COMMUNISTS talks of reform, extending help to market, etc.,
