When I was younger I used to pay a lot of attention to the Stock Market. It was a lot like blackjack or poker to me – if you were knowledgeable and had the ability to read the trends you could do well. I had a couple of stocks I liked to follow but as I grew up poor I never actually had a real portfolio.
I still don’t. I mean, I have a 401k and have money saved
for the eventual day I decide to stop shouting – no clue when that will be –
but I don’t pay attention to it like I once did. I came to realize some time
ago that paying attention doesn’t really matter to a person without wealth to
begin with, so the whole market fluctuations that have happened over the past
few days really don’t mean much of anything to me.
Yeah, the Dow dropped a ton. My 401k doesn’t actually have
any money in the 30 stocks they use as the barometer for that exchange. The
Chinese market also dropped a LOT. But again, I don’t have any money there. Oh
sure, my 401k probably took a hit and so did yours, but did it make a real dent
in a market that trades 2 Billion shares on the NYSE alone, at an average daily
value of $163 Billion? Sure, the numbers look scary but given the overall
volume of action out there no real harm has been done to your real money.
It’s the perception of your real money that has taken the
hit, and that matters so much more.
Your money doesn’t actually exist in any real form. Those
bills and coins and checks and credit cards you carry around are all Promises
to Pay. Some of them even say so right on them. What they are in reality is a
promise that some financial institution somewhere is willing to back up the
trinkets you are using to represent your wealth in exchange for items you wish
to own. Thing is, they don’t actually (for the most part) go to the bank. They
just go to another person who uses it the same way. It works because we all
accept it – because we all believe it works. Truth is, there isn’t enough
actual assets to back up all of the cash (promises to pay) in circulation. If
every person in the US were to go to a bank and ask for their money right now,
the country would go bankrupt in about 15 minutes.
By the same token, stocks work because we believe in them.
They can be used as a barometer of how healthy a company is but it can also be
a measure of just how cruel their management is (look at Sears). It can be a
measure of how much liquidity a company has. It can be a measure of who is
propping them up. It can be a combination of all of these things. But we
believe it is an indicator of the wealth of our country because we believe it.
There is no actual causality between how well-off the county is and how well
the stock market is doing – not anymore. Reforms have been put in place so that
an event like October 1929 will most likely never happen again.
And it’s also worth noting that for every loser out there in
this most recent stock dive that there were winners as well. After all, you
sell off a stock to MAKE MONEY.
So where is the real money? It’s there because we all
believe it is there. Here is a piece of papers you can have in exchange for
your goods and the government/bank promises that this piece of paper can be
used in exchange for another good at your leisure. It works because we all
believe it works. If that were to stop it would all fall apart in very short
order.
And what does this have to do with the stock market taking a
hit? It’s the psychological value of it all. The Dow drops 1,000 points in a
few hours of trading! Oh dear lord when will it end? Ever notice that it always
does end and that things get better? I might be worried if the Dow were at
9,000 instead of the 16,000 it has been trading at recently. Hey, it’s not
nothing but we’ve been through worse. So how much real money do you have in
your 401k? In your stocks? More than likely you’re not a member of the 1% if
you’re reading this so in reality it’s probably not very much. Taking a hit on
not very much still leaves you with not very much.
You’re going to be just fine. Believe it. It’s when you don’t
that the trouble comes.
Cheap shots (Vodka for a Monday – maybe Akkavit if you’ve
been good):
Simple things like tying shoelaces seems to evade Governor
Scott Walker’s comprehension. Asking
him about the complicated shit just seems unfair.
Um, wow. Bill Kristol hasn’t been right about ANYTHING in
years and years now. This
will never happen and the reason is simple. If he resigns (and he’d have to
in order to run) Obama gets to appoint his replacement.
Or could it be that thanks to China’s markets driving the
downturn that it’s really about finding some new
non-whites to blame for everything?
Does this mean that they will taunt
us a second time? Silly Kuhniggitts (wow, it’s really easy to slip from
that to being racially offensive – careful careful)
You know, Trump really does like to see
his name on things, so given today’s climate I don’t think he’d object…
No
laws were broken, dickwads.
While everyone else is gasping in horror the 13-year old boy
in me is wondering
what they made it stick with. (if you mind went there drink!)
It’s a fair point – if you’re so obsessed
with the Ashley Madison story why not just jump straight to searching for
porn? It’s about the same thing now. (drink again)
And now a moment of Zen:
"Reforms have been put in place so that an event like October 1929 will most likely never happen again." Too bad the reforms that were put in place to prevent the build-up to Oct. 1929 were scrapped.
ReplyDeleteChris Christie blew it. He should have run 4 years ago. He may still not have been the nominee, but he would have at least made an impact and been a contender. His "bluster" (which was really his main selling point) was overtaken by Trump. I still wouldn't have voted for him if he were a candidate in 2012, because frankly I hate what he's done to Jersey - not that I care all that much anyway - and these days, there's pretty much nothing that would make me vote Republican ever again.
Yeah, I have to keep my mouth shut and bite my tongue not to start a fight with my family when I visit. At least my niece isn't posting any more "poor oppressed police officers" posts on FB anymore.
Oh yeah, if anyone outside the 1% (or maybe even the 5%) believes that their 401k account is going to support them in their retirement, even with social security, I've got a bridge to sell. Seriously, the only reason I may be able to retire at 67 (when I can finally get some SS) is because my husband will still be working full time for another 10 years.
ReplyDelete