A serious question about the stock market.

Discussion in 'Economy' started by uscitizen, Aug 5, 2011.

  1. uscitizen
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    uscitizen Senior Member

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    What percentage of GDP is made up from stock market and similar investment monies, such as commodities futures, etc?
     
  2. Paulie
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    Paulie Platinum Member

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    It's somewhere near 100% right now for just total stock market cap/GDP. When you add commodities in it's much greater. Usually that means overvalued but that doesn't always mean sell.
     
  3. expat_panama
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    expat_panama Silver Member

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    GDP = consumption + investmenents + exports - imports + gov't purchases, so that would include money spent buying stocks as well as factory buildings and machinery. The BEA adds it all up and their website (http://bea.gov/iTable/index_nipa.cfm) has the latest GDP at $15t, and the total investment part is $1.9T.
     
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  4. Paulie
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    Paulie Platinum Member

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    Yeah that's probably what he was actually looking for. At first I thought he meant cap/GDP which is about 100% of it.
     
  5. Foxfyre
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    Foxfyre Eternal optimist Gold Supporting Member Supporting Member

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    I don't think you could ever quantify the DOW or NASDAQ or S&P or whatever as a percentage of the GDP. The Market is driven by business investment.

    GDP = C + G + I + NX

    "C" is equal to all private consumption, or consumer spending, in a nation's economy
    "G" is the sum of government spending
    "I" is the sum of all the country's businesses spending on capital
    "NX" is the nation's total net exports, calculated as total exports minus total imports. (NX = Exports - Imports)
     
  6. percysunshine
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    percysunshine Gold Member

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    The government can only purchase with money it takes.

    Net Zero. (well, plus a Biden transaction fee)
     
  7. waltky
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    waltky Wise ol' monkey Supporting Member

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    Granny says don't worry, be happy - she seen worse...
    :eusa_eh:
    Dow drops 1,147 points over three trading days. Is that a 'crash'?
    August 8, 2011 - The Dow has lost 9.13 percent of its value over three days of trading. It's bad, but investors have seen much worse in previous sell-offs. Still, 'crash' versus 'correction' is a matter of debate.
     
  8. uscitizen
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    uscitizen Senior Member

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    Yep pretty much what I wanted.
     
  9. william the wie
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    william the wie Gold Member

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    Stock market valuation is not part of GDP normally and neither are bonds, existing houses, commodity reserves and anything else not produced or imported and sold or used internally this year. I don't know about IPOs, which may very well be part of GDP but ownership transfers other than imports and exports are not counted excepting transfers from the producer to the consumer. So, even though PEP has always known what he was talking about when I bothered to check I suspect the data he found was VC, founder and IPO shares since normally stock transfers are treated like used car sales i. e. not counted as GDP.
     

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