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There may be no underlying financial issue, but percentage wise we're going down much faster. September to Oct 2008 was a 9.5% drop (steepest month drop). Past

by eyegor 7y ago

There may be no underlying financial issue, but percentage wise we're going down much faster. September to Oct 2008 was a 9.5% drop (steepest month drop). Past 30 days was a 20.5% drop. Tracking s&p 500.

cdata 7y ago
The stock market is not the economy.
- mjevans 7y ago
  It doesn't even seem to be a real index on economic activity anymore either... In my personal view 'The Market's purely reflect consumer confidence. They appear divorced from actual reality, aside from how that affects the mindset of easily panicked lemmings.
  - kqr 7y ago
    Money purely reflects consumer confidence, and as long as the economy is based on money, so does the entire economy.
    - Dylan16807 7y ago
      Not really. There's tons of steady demand to drive money forward. You can double or half average consumer confidence and it won't change the price of a burger or a t-shirt.
      - woofie11 7y ago
        One consumer? No. All consumers, it definitely will.
        Dylan16807 7y ago
        How big of an area do you need to see this effect? I've never heard of this kind of pricing difference on a city, county, or state basis. And the stock market varies wildly on a daily and monthly basis without affecting the prices of almost anything. It seems clear to me that money is not even close to affected by consumer confidence the way the stock market is.
        kqr 7y ago
        The difference in this case is that the stock market is a highly efficient process, where feedback paths are short, information is shared widely, and there is potential to make a lot of money on other's misjudgements, automatically correcting the price in the process. This means changes in confidence are almost immediately reflected in the price. T-shirts, on the other hand, much more slowly change to match confidence, for the same reasons. If you think people collectively over- or undervalue T-shirts, it is rather hard to make money off of that mistake. In part because it implies moving physical stock, but also because they are a relatively refined product. Markets for natural resources see some of the same fluctuations as stock markets, although not to the same degree.
        Dylan16807 7y ago
        Thinking something is over or under valued is very different from general confidence in the economy. In daily life you're not betting on the economy, you're part of it. You work and spend even if you think the nukes are going to kill everyone. Confidence has a vastly weaker connection to demand for goods.
        woofie11 7y ago
        If people think the dollar is significantly overvalued, they'll switch to gold, bitcoin, rolls of toilet paper, or other forms of ad-hoc currency. That's what happens in countries with 1000% inflation, for example.
8ytecoder 7y ago
Stock market is a tricky gauge. People sell for all sorts of reasons even if some of it is rational. Always good to remember that the fact that there’s a sale also means there’s a buyer. Another fact is there could be large number of shares that never traded. It’s hard to dissect this information from price alone. All we know from a dip is that there’s more demand to sell than buy. That’s hardly enough information to see the full picture.
tathougies 7y ago
That's because of people panic selling, and it's a wonderful opportunity to buy cheap stocks.
- jader201 7y ago
  The problem is stocks continue to fall — hard — and nobody knows where the floor is. It’s also unclear how long it will take everything to recover, if they do continue to fall.
  - tathougies 7y ago
    Stock prices don't really matter in the short-term, and we are lucky that the underlying financials are good, and that -- at the end of the largest bull run in history -- many of the largest companies have lots of cold hard cash. Apples hundreds of billions don't look so silly now, do they? Oh, BTW, the floor is hard-set at zero, which they'll never get to, since -- given there is no underlying financial issue, and that demand is going to be higher than ever once we're done with this -- all these companies have intrinsic value.
    - tempestn 7y ago
      I won't opine on the correct value of the stock market at the moment, but the drop in demand due to measures needed to preserve life cause a financial issue. Many/most consumer-facing businesses can't withstand a drop in demand to near zero for a period of at least several months. So those businesses, absent some sort of national bailout, will go bankrupt. Or at the very least, they will go dormant. Either way there will be layoffs, and of course the laid off employees will reduce their spending further. Even once the virus is under control, it will take time to reverse this damage. Yes, of course, the market won't go to zero. But some firms will go under, and we don't know how severe the economic impact will be. Just because the crisis began with a natural disaster rather than a financial one doesn't mean there can't be serious financial impact.
      - tathougies 7y ago

by eyegor 7y ago

cdata 7y ago

The stock market is not the economy.

mjevans 7y ago
It doesn't even seem to be a real index on economic activity anymore either... In my personal view 'The Market's purely reflect consumer confidence. They appear divorced from actual reality, aside from how that affects the mindset of easily panicked lemmings.
- kqr 7y ago
  Money purely reflects consumer confidence, and as long as the economy is based on money, so does the entire economy.
  - Dylan16807 7y ago
    Not really. There's tons of steady demand to drive money forward. You can double or half average consumer confidence and it won't change the price of a burger or a t-shirt.
    - woofie11 7y ago
      One consumer? No. All consumers, it definitely will.
      - Dylan16807 7y ago
        How big of an area do you need to see this effect? I've never heard of this kind of pricing difference on a city, county, or state basis. And the stock market varies wildly on a daily and monthly basis without affecting the prices of almost anything. It seems clear to me that money is not even close to affected by consumer confidence the way the stock market is.
        kqr 7y ago
        The difference in this case is that the stock market is a highly efficient process, where feedback paths are short, information is shared widely, and there is potential to make a lot of money on other's misjudgements, automatically correcting the price in the process. This means changes in confidence are almost immediately reflected in the price. T-shirts, on the other hand, much more slowly change to match confidence, for the same reasons. If you think people collectively over- or undervalue T-shirts, it is rather hard to make money off of that mistake. In part because it implies moving physical stock, but also because they are a relatively refined product. Markets for natural resources see some of the same fluctuations as stock markets, although not to the same degree.
        Dylan16807 7y ago
        Thinking something is over or under valued is very different from general confidence in the economy. In daily life you're not betting on the economy, you're part of it. You work and spend even if you think the nukes are going to kill everyone. Confidence has a vastly weaker connection to demand for goods.
        woofie11 7y ago
        If people think the dollar is significantly overvalued, they'll switch to gold, bitcoin, rolls of toilet paper, or other forms of ad-hoc currency. That's what happens in countries with 1000% inflation, for example.

8ytecoder 7y ago

Stock market is a tricky gauge. People sell for all sorts of reasons even if some of it is rational. Always good to remember that the fact that there’s a sale also means there’s a buyer. Another fact is there could be large number of shares that never traded. It’s hard to dissect this information from price alone. All we know from a dip is that there’s more demand to sell than buy. That’s hardly enough information to see the full picture.

tathougies 7y ago

That's because of people panic selling, and it's a wonderful opportunity to buy cheap stocks.

jader201 7y ago
The problem is stocks continue to fall — hard — and nobody knows where the floor is. It’s also unclear how long it will take everything to recover, if they do continue to fall.
- tathougies 7y ago
  Stock prices don't really matter in the short-term, and we are lucky that the underlying financials are good, and that -- at the end of the largest bull run in history -- many of the largest companies have lots of cold hard cash. Apples hundreds of billions don't look so silly now, do they? Oh, BTW, the floor is hard-set at zero, which they'll never get to, since -- given there is no underlying financial issue, and that demand is going to be higher than ever once we're done with this -- all these companies have intrinsic value.
  - tempestn 7y ago
    I won't opine on the correct value of the stock market at the moment, but the drop in demand due to measures needed to preserve life cause a financial issue. Many/most consumer-facing businesses can't withstand a drop in demand to near zero for a period of at least several months. So those businesses, absent some sort of national bailout, will go bankrupt. Or at the very least, they will go dormant. Either way there will be layoffs, and of course the laid off employees will reduce their spending further. Even once the virus is under control, it will take time to reverse this damage. Yes, of course, the market won't go to zero. But some firms will go under, and we don't know how severe the economic impact will be. Just because the crisis began with a natural disaster rather than a financial one doesn't mean there can't be serious financial impact.
    - tathougies 7y ago