Why Stocks Are Falling

Curious as to why the stock market is plunging? I am not an economist, and while I have some understanding of the way the market works, I know just enough to be dangerous. So, I turn the explanations over to friend Erik Hare, who IS an economist and understands far better than I. Thank you, Erik, for well-written, understandable post!

Barataria - The work of Erik Hare

As the eight year old bull on Wall Street is slaughtered for its meat, several questions come to mind. Is the fall likely to continue? Where will it stop? And, for those on the sidelines looking to score political points, who is to blame?

The answers to these questions are easy and a little terrifying. Yes, this is going to go on for a while. It may not stop until a lot of money is lost. And while you can’t blame anyone for actions which are cyclical, you can blame those who make things worse. The US economy is a large engine, and any good mechanic knows that while you can do a few small, smart things to make it run better it is much easier to really screw it up.

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4 thoughts on “Why Stocks Are Falling

  1. Stock prices are falling, because they were way overpriced.
    Interest rates have been absurdly low, which is what drove the stock market prices up. Now that interest rates seem to me moving up, stock rates are going down. That’s a natural adjustment. But it is happening too rapidly, pushed by poor policies from Trump and the Republicans.

    Oh, that’s just my opinion. I have no expertise in economics.

    Liked by 1 person

    • Much of what you say is true, but I think the certainty of the federal deficit going through the roof plays a role as well. I have been saying, every time I hear Trump pat himself on the back for the rising stock market, that it was a house of cards, not built on a solid foundation, but on a wave of false hopes. Which is why stock prices were too high. And, I think that the one who took credit for the gains, must also take at least partial blame for the losses.

      Liked by 1 person

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