Do we know where the sales mostly came from?
Random speculation: Could be banks needing to pull out of the market due to the Fed signaling September rate cuts due to the higher-than-expected unemployment report. This will cause a drop in yield for savings, which would cause people to reduce what they have in those accounts.
Most of the money banks “have” they created it themselves (it’s called Fractional Reserve Lending and there’s a wonderful paper on it by somebody at the Bank Of England called “Money creation in the Modern Economy”).
The whole “banks lend out depositors’ money” thing hasn’t been true since the 80s.
Also nowadays most of the money in leveraged investments comes from the Money Markets (so rich people and pension funds) rather than banks.
That said, your point still stands since a reduction of deposits might impact banks’ reserves (basically central banks force them to have the equivalent of about 3-5% of their loans as reserves), it would force a wider retrenchment of their loans, but by itself the impact of that on the entire leveraged investment universe should be limited because they’re not the main players in the Money Markets.
Well, they announced a rate hike in Japan, so that would seem to be a more immediate cause.
In fact, there’s some analysis that suggests that Japan’s rate hike contributes to the dip in the other markets. Evidently it was a thing for people to borrow yen, use that to get other currencies, and then buy stock and sell the stock to repay the loans. Since the yen has climbed 14% versus the USD in the past few days, those loans suddenly became awfully expensive.
Random speculation: Could be banks needing to pull out of the market due to the Fed
…
Japan stocks
I mean… it could be. But most foreign stock markets aren’t directly tethered to the Fed.
Directly? No. Heavily? Absolutely.
Line go down?!
Line go down 🐻
At this point, it’s not even that. That’s just a blip in the 1000-times leveraged surreal casino economy.
Oh hey look a bunch of sheep - human and electronic - are reacting self destructively for no good reason. Must be any day ending with a ‘y.’
I wish I knew how the VIX worked, that shit is going to be up so much today.
Nice call, I checked it and it is already above the levels of the Ukraine war. It’s a COVID-level or 2008-level event already.
https://finance.yahoo.com/quote/^VIX/
I think volatility is just a name used for variance of a basket of commodities, stocks, bonds that reflects an added price due to risk/uncertainty.
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Well it’s also caused the US market to dive, even overnight. Looks like the big correction is finally biting down.
Japanese people are overworked and I’m worried for their health. It’s good when they get a break from the economy.
People are freaked about WW3 breaking out
Usually war is a way to stop a recession/depression since its so profitable.
The economy has been fucked far longer than the current conflicts that might actually start ww3
Usually war is a way to stop a recession/depression since its so profitable.
When you’re selling into a war market, you can make a lot of money. When you’re in that war market you tend to lose a lot of your expensive durable capital very quickly, which can get very expensive.
It is only profitable for a few in some places. War is not net good for “business”
In a stagflation scenario war is great for business. Otherwise you have no business at all.
Isn’t WW2 the only example of this in practice? (and then only where the war did not reach, like the US or pre-1940 nazi germany)
Ya it’s a pretty good example since WW2 was a stagflation scenario. It’s exactly the same scenario we are headed into. There’s a lot of similar polarities. Some may even argue that the next world war will break out precisely because of stagflation.
As we descend further and further into economic depression (we’ve been in a recession for years) you’ll see the gears of war begin to spool up.
One would think we’d have learned to fix this inevitability by now…or is it intentional, to “fix the stagflation”?
The economy squeezes the proles for every penny they have, inflating the money faster than wages to ensure only the rich can afford to maintain.
Once the proles have been squeezed dry, have a major conflict and help save the failing banks and restore a “golden era” for a time.
Then do it all over again by starting to squeeze the masses.
Part of the problem is getting everyone on board. Economic prosperity is a great way to justify keeping a government in charge. Major economic downturns usually cause a change of government and unrest with the government in general. Without a good economy as justification to keep a government in power, many governments turn to “defense” as a reason to stay in power.
Ferrengi rule of acquisition 34. The best rule 34.
Sounds like the oligarch commandments.
It’s like Hyperneoliberalism:
“Nothing bad ever truly happens, guilt is subjective, nothing is real, everything is allowed, but if you take anything from me, it is the worst possible crime in all of history.”
Girl, have you been following THIS WEEK’S news? Like right now is unlike any other time.
War is historically used to pillage other people when times are rough. It doesn’t stop a recession; it doubles it and gives it to their opponent.
Headline is a bit disingenuous as it is the most points (because the total points is higher) but only the second highest percentage (1987 still 1st).
