Stock Market collapse: 6 theories

Discussion in 'Politics' started by rightwinger, Aug 5, 2011.

  1. rightwinger
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    rightwinger Paid Messageboard Poster Gold Supporting Member Supporting Member

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    The Dow's 'scary' collapse: 6 theories - The Week

    1. Wall Street hates the debt deal
    The plunge Thursday capped a 10-day slump, says Stephen Gandel at TIME, that started when it became clear that Washington was close to a debt deal. That's because the deal cuts spending precisely when the economy needs government to spend more. And the savings comes largely from gutting programs that help the poor, increasing income inequality. Struggling families spend every dime they get, boosting the economy. The rich have so much already that they put any "extra wealth" into savings, where it does little to stimulate the economy.

    2. European debt is frightening investors
    The European Central Bank is trying to reassure markets, says Graham Bowley at The New York Times, but it "ended up spooking investors." The bank bought up bonds from small European countries as a show of support, but it left out Italy and Spain, "whose mounting troubles have come into the spotlight." Investors took this "as a sign that the recent rescue packages by Europe could soon be overwhelmed by the huge debt burdens in those two countries" — and they panicked

    3. Investors are freaked out about a double-dip recession
    There's no great mystery — the markets are pricing in "the growing risk of a double dip" recession, says Allahpundit at Hot Air. We've just been slammed by a string of devastating economic reports showing that, among other things, the economy has essentially stopped growing, unemployment isn't improving, and manufacturing orders are down. The Obama administration isn't creating jobs, but it's scaring investors with the threat of new taxes and regulations. Add it all up and you get "total fear."

    4. Republicans are blocking attempts to help the economy
    President Obama has no shortage of ideas to put Americans back to work, says Steve Benen at Washington Monthly. But the GOP has been overcome with "madness," and it's blocking every proposal that might actually help. "This is partly due to their radical ideology, partly due to their reflexive opposition to anything the president wants, and perhaps motivated by the belief that economic suffering should be encouraged in the hopes that it will make President Obama easier to defeat next November."

    5. It's finally dawning on people just how bleak things are
    "Whatever weak recovery we might have hoped for," says Ezra Klein at The Washington Post, "is being hindered by global commodity prices, consumer deleveraging, fears of flagging demand in emerging markets, earthquakes in Asia, and much more." So where will the recovery come from? "As one hopeful hypothesis after another is dashed, the markets are beginning to panic."

    6. The media is fueling market panic
    Financial analysts chalked up the sell-off, which wiped out Wall Street's 2011 gains, to investor fear, says Dylan Stableford at Yahoo! Finance. But it's also possible that wall-to-wall coverage of the "historic drop" on broadcast networks and cable news could have fueled the panic. Still, some experts doubt the TV chatter had much impact. "A huge chunk of volume — and hence momentum — is now driven by machines, computers and algorithmic trading," says Dan Gross, economics editor at Yahoo! Finance. "And the computers definitely aren't watching cable news."
     
    Last edited: Aug 5, 2011
  2. Sarah G
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    Sarah G When Nothing Goes Right, Go Left Supporting Member

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    Any one of them could set off a downturn with an already skittish market but there is something in each of these threories that is making investors nervous.
     
  3. TruthSeeker56
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    TruthSeeker56 Silver Member

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    The stock market has been doomed to collapse for a long time now. What has happened over the last few days is NOTHING compared to what is going to happen in the next few months.

    Anybody who has a 401K or Roth IRA or is otherwise invested in the U.S. stock market needs to cut their losses and bail out NOW, before it's too late.
     
  4. georgephillip
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    georgephillip Gold Member Supporting Member

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    Have we reached a technological tipping point where Capitalism is no longer capable of providing jobs to all humans who need one? One of the selling points for the Industrial Revolution was that the machine would eventually free humanity from the need to work. Are Americans willing to acknowledge health care, education and subsistence are human rights?
     
  5. Sarah G
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    Sarah G When Nothing Goes Right, Go Left Supporting Member

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    I feel like doing that but where do you put your money? What if the banks collapse under the weight of a depression?
     
  6. Leweman
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    Leweman Gold Member

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    Capitalism is intended to provide jobs to all humans that need one? I did not know this. There are no rights but those we give ourselves. We can all agree that anything is a human right or that nothing is a human right. Its what we all agree on that makes it a right.
     
  7. georgephillip
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    georgephillip Gold Member Supporting Member

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    Capitalism elevates profit above all else including the common good.

    Industrial capitalism did a decent job of providing jobs to the work force.
    Finance capitalism invests where wages are lowest, and human rights standards are far lower than they are here.

    If private capital no longer needs US workers or consumers, then US workers and consumers will create a new economic system that doesn't need US capital. Seemingly, that would require enshrining health care, education and subsistence as human rights; however, I don't think it"s likely we will all agree on that any time soon.
     
  8. freedombecki
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    freedombecki Let's go swimmin'! Supporting Member

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    Obama thinks nothing of collapsing the American economy!!! He has sold out American principles of a President serving everyone. Instead he serves (helps) people who helped him become President and excoriates entire blocks of states who did not vote his way in the last election. Just look:

    (1) Take Fannie Mae and Freddie Mac. His government subsidization of them amounted to paying back investors in his campaign cash cow. "Fannie Mae and Freddie Mac Invest in Democrats"

    And he hatefully punishes states that didn't support his campaign cash appeals. He practically abolished 600,000 American oil and gas jobs including auxiliary jobs created by energy concerns when he took out drilling in the Gulf of Mexico. Do you want proof? Well, just look at the map:

    [​IMG]
    Source

    That graphic is very telling of why Barack Obama DESTROYED Gulf Drilling. It was the only way he could damage as much as he possibly could American citizens who do not cotton to his agendas, and they voted against him. HE SHOWED AMERICANS HIS REAL CAUSE--himself!!!

    Get rid of Barack Obama in 2012, Vote for the other candidate.
     
  9. Avorysuds
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    Avorysuds Gold Member

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    Bush got the blame in 2008 so guess what, Obama get the blame in 2011... deal with it.

    I did find it predictable that you still managed to blame everything and everyone but Obama who signed the crap budget into law RW.
     
  10. Avorysuds
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    Avorysuds Gold Member

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    This is a great example of the word "inferior."
     

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