Comments on: So the stock markets are crashing, what’s the big deal?

By: Christian Evertz

Christian Evertz — Mon, 29 Sep 2008 13:13:55 +0000

I don’t think think that falling stocks necessarily mean that the economy is doing bad. Remember its only humans who sell and buy stocks and they might have different predictions or fears for the future. However, there is still some truth in what the stocks tell us, since stocks reflect the opinions of many people. Still, stocks of companies who are doing really well can fall, because people fear that the company will do bad in the future. So stocks give us a future outlook and do not always reflect what’s currently happening in the economy.

By: Elizabeth Wargo

Elizabeth Wargo — Sat, 20 Sep 2008 00:07:32 +0000

Up and down and up again. Remember that wall street is only a small part of the $14 trillion dollar US economy. The only problem is, it holds the ability to support the “buy now pay later” US mentality. In Asia where the mentality is largely “save now buy later” the opposite at times like these you can see why things like the Shanghai market rising over 9% yesterday (Friday September 19th) are happening. They have lots of cash “in there pockets” and need put it somewhere.

I just may go out on a limb and say- that in my opinion, the U.S. may no longer be looked at by the world as the benchmark for capitalism.

By: Steve Latter

Steve Latter — Wed, 17 Sep 2008 22:50:23 +0000

Hey Leo,

You are going to be a rich man one day! Only the fools (or the rich who can afford to lose money) “play the stock market” (buy & sell) on a daily, weekly, or yearly basis.

The real experts “buy & hold”, “diversify” among many stocks, and laugh at the novices buying and selling stocks on a daily basis. Research confirms, based on tax return review, that the worst type of stock investor is the “day trader” or the investor that believes they can make money in the stock market on a short-term basis by frequent buying and selling. If you think about it all of these volatile “ups & downs” in the stock market these days are driven by “professionals” which is pretty sad. Independent reports show that over 70% of professional stock managers fail to outperform the average of the stock market because they buy and sell too often. Look into “index funds” as the way to invest. that is my best advice, but a story for a different day (or really a different blog site).

Jason picked a good blog posting because stock market gyrations are on everyones mind these days!

By: Leo Summers

Leo Summers — Sat, 16 Feb 2008 14:46:50 +0000

It’s a huge myth that anyone can second-guess the market. The reality is, no one can accurately and consistently predict where a market - or an individual stock - will go next.

That’s why smart investors and traders position themselves in such a way to take advantage of big market moves, without really caring whether the move is up or down.

Anything else is just gambling.

By: Helen

Helen — Fri, 01 Feb 2008 09:24:54 +0000

It’s funny: “stock markets have predicted ten out of the last three recessions”. Almost the whole world (the majority that hasn’t taken economics) is staring the jagged lines go up and down, worried about the economy one second, then ecstatic the next, when it turns out that stock markets aren’t that accurate of a predictor of the economy.

The stock market apparently is the new “it” thing in China. My grandparents are buying them; my ayi is buying them; my dad even told me that his employees are checking the stock market every five seconds on their computers “behind his back”. I’m not implying that these people are stupid, but overall, the percentage of people investing in stocks in China AND knowing what they’re doing is becoming smaller and smaller. These sorts of “blind” investments (”my friend is buying that stock so I’ll buy that too”) - are they healthy for the economy?

By: Jason Welker

Jason Welker — Sat, 26 Jan 2008 18:08:25 +0000

Ah ha… the government borrows the money… from your parents, from foreigners, from firms and banks, from all sorts of places! don’t worry, we’ll talk all about that!

By: James Tsao

James Tsao — Sat, 26 Jan 2008 14:28:31 +0000

So even though the stock market is not counted as part of the GDP because it is merely a transfer of money, it CAN impact GDP. In terms of consumer confidence, the stock market does have great influence. This is why my parents believe that when shareholder confidence is low from a plummeting stock market, you can take advantage of it by acquiring stock that are very cheap. In the end, unless some thing BIG really happens, the stock market will go back up.

I have a question though. How does the fiscal policy work if tax cuts are implemented at the same time the government increases its spending? Where does the government get the money?