Whooo, man!
All evening, I've been reading on blogs of every political stripe that tomorrow ain't going to be a good day for the stock market! There's going to be lots of TV preemptions tomorrow, because financially secure investors losing their money is always a big item, as you know. But the irritating preemptions aren't the real story. (Today I've gradually lost all my hearing in my left ear, so I can barely hear the TV anyway.)
If the dire predictions come true, I guess you might end up being able to consider the crash to be what's called a correction. What that really means is that the market has been inflated to begin with, and investors are only now paying the piper. The more important point though is that folks such as you and me - the poor and working class who don't invest in the stock market - have lived in a deepening recession for a quarter-century. Quite frankly, as someone who owns no stocks, a crash probably won't do me any harm.
I'm not bragging, and I'm not having fun at investors' expense. I'm just telling you the truth. That's just how things work. In the post-Depression era, the stock market is generally antithetical to the interests of a majority of the public.
If a crash does hurt me, it will be only through indirect means. I'm worst off when the stock market does well, so I don't expect to come out too far behind.
Wealthy investors are about to learn that recessions are very real. If there's a crash, maybe what it'll accomplish for us is to expose the fact that a recession exists. Sure, it'll cost someone - but this time it might not be us. You might not relish seeing people lose money - even if they are better off - but if you're reading this blog, you're probably like me and don't have enough invested to be hit too hard.
Sunday, March 16, 2008
Investors about to learn recessions are real
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Tim, I don't think you understand how the stock market affects the average, working man and woman. But a stock market crash or "correction" may hurt you more than you think.
ReplyDeleteAs you have stated, you are dependent on advertising income from your blog. If stock values plunge, companies will start looking to make cuts to appease investors. One of the first things companies big and small cut in a down market is the advertising budget.
Workers (both blue and white collar) with retirement plans would also be greatly affected because they are heavily vested in stocks. You are mistaken if you think only the "rich" have a stake in the stock market. Few companies still have true pension plans any more, they've been replaced with employer-matching 401(k)s. Many who have 401(k)s do not know which stocks they hold or even realize they are in the market because they don't manage them themselves. But they will notice when their retirement account goes down. Some may have to put off retirement longer than they hoped.
And what do publicly traded companies who see their stocks go into freefall cut after the advertising budget? Jobs.
Maybe that's what Bandit means by the market affecting him "only through indirect means"?
ReplyDeleteLet's be honest...If you don't own stocks, would you directly lose money if it crashes?
Companies downsize constantly anyway. No big company hires when it doesn't have to (unless it's some executive).
So, overall yes, Bandit is right.
To say that a poor non-investor benefits from the market is discredited 80s trickledown theory at its worst.
The poor may have little at stake, beause they have little to lose, but that's not true of the majority -- the working class.
ReplyDeleteWell Tim, doesn't look like it was the "good" day you were expecting. Dow closed up slightly, NASDAQ and S&P500 down a little. I guess the Fed staved off collapse for another day. If this keeps up, we're headed in the direction of nationalizing banks.
ReplyDeleteWhat a shame.........
ReplyDeleteI was hoping to see greedy investors lose all their money.
How many working class people own stocks?? It's definitely not a majority.
ReplyDeleteAll that crap from the MSM about "the majority of Americans own stocks" is just that: CRAP.