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True that economies generally grow with time, but that doesn't mean the prices of stocks match reality. Prior to corona, the Dow Jones was nearly double it's va
by wycy 7y ago
True that economies generally grow with time, but that doesn't mean the prices of stocks match reality. Prior to corona, the Dow Jones was nearly double it's value from 2016. Did the US economy really nearly double in value since 2016, or was there a mismatch between price and reality?
Honestly, I'm not an expert. But before coronavirus, the wild growth in the markets seemed--to me--out of line with the realities of the economy.
- nl 7y agoSure I think that's a reasonable case to make. We could have - at some point - had a correction in the financial markets which might have caused a 2001 style disruption or maybe a 2008 recession. But this is nothing like that at all. A stock market crash takes months to move through the economy. A big crash means things like 700,000 new unemployment claims (2008 had that many at its peak). The US just had 6 million new unemployment claims. It's a whole new level.