Economic News

[rodoheel]

The market has been warped by buy-the-dip day trader/sports gambling mentality, I think. Almost every stock is just a meme stock to a growing number of stock gamblers.

Yep. Remains to be seen whether this (combined with the presence of a ton of passive investors through 401ks, etc) has created a cultural cheat code where the market always goes up...or if it just means that the next time we have a crash, it could end up worse than any before.

 

[nycfan]

 

[superrific]

and other crap ending in the collapse of financial institutions and the great recession of 2008.

Many times there have been categories of assets that spectacularly failed. Once they brought down the financial system (1929); and once they almost brought down the financial system; and otherwise the financial system has been more or less fine.

It wasn't the failure of the assets that caused the meltdown. It was -- in 2007 and 1928 both -- inadequate regulation of leverage. Greenspan fundamentally did not understand that derivative assets can create way more leverage dollar for dollar than debt. Hence he thought the banking system was awesome when it was dying.

 

[nycfan]