For the market's aren't the economy crowd: I agree, and even to the extent it does say something about the economy, it is noisy and often inaccurate.
However, there are a few counter arguments. When markets really tank, it does impact businesses directly: companies can sell stock to raise capital, that's really the main reason for going public, and having stock valued less means you can sell it for less, so you either have to sell more stock, or have access to less cash. Also a lot of people get some portion of their salary in stock options, so they'll be getting less money. And companies often care about their stock price, so if it is tanking, they may do things like lay people off, make less risky decisions (investments), etc... which will have a direct impact on the US economy.
Also, markets are forward-looking, so a major selloff here isn't an indication of always what has happened, but often is an indication of investor sentiment regarding the future of the economy (or specifically, the performance of companies that they own shares in).
Anyway, I wish I was able to just sit back and watch this! I wish we could all do that, because it's going to be really interesting, but the unfortunate reality is this is going to cause a lot of pain for a lot of people - and not just in the US. Hope everyone holds up OK.
For the market's aren't the economy crowd: I agree, and even to the extent it does say something about the economy, it is noisy and often inaccurate.
However, there are a few counter arguments. When markets really tank, it does impact businesses directly: companies can sell stock to raise capital, that's really the main reason for going public, and having stock valued less means you can sell it for less, so you either have to sell more stock, or have access to less cash. Also a lot of people get some portion of their salary in stock options, so they'll be getting less money. And companies often care about their stock price, so if it is tanking, they may do things like lay people off, make less risky decisions (investments), etc... which will have a direct impact on the US economy.
Also, markets are forward-looking, so a major selloff here isn't an indication of always what has happened, but often is an indication of investor sentiment regarding the future of the economy (or specifically, the performance of companies that they own shares in).
Anyway, I wish I was able to just sit back and watch this! I wish we could all do that, because it's going to be really interesting, but the unfortunate reality is this is going to cause a lot of pain for a lot of people - and not just in the US. Hope everyone holds up OK.