editor's note - There will be two articles to comment on this week to make up for last week.
Read this interesting article about what constitutes money and what doesn't. Will the events of the past few weeks cause a fundamental change in our assumptions about the market, and how we invest our money? The Great Depression caused our grandparents to lose their faith in banks. What lessons do you think we will come away with from this current crisis?
69 comments:
1st.
Its terrible that so much money invested in the stock market by millions of Americans has "vanished." Its quite worrisome that the confidence in the market is gone, and that it shows no signs of returning in the near future. There is no consolation in knowing your invested money is not in the hands of someone else, but rather that it is gone. Its depressing to know that that wealth all over the world "simply decreases in a situation like this." All we can do is wait and hope for the market confidence to return.
Its scary to suddenly see that your "money",that you thought was safe in a bank, is gone. We all had a false sense of security with the banks, visioning a huge vault with armed guards and attack dogs standing alert to guard your life savings. In fact, banks only carry a small ammount of cash in their valts, while the rest is off somewhere else.
Therefore, it makes sense that people lost confidence in banks in the depression and now after realizing that their money really isn't "money" anymore.
People's perception of money isn't as concrete as they think it is. The money you put in the bank is much more a figure in a computer then actual substance. Banks don't pull all the money they get in transactions in a big vault where everyone's money is held. A very small value of it is actually held at the bank.
They stock market is really a tricky place. They lead you to believe that you have all this money then when it suddenly goes away they say "oh yea by the way that wasn't really cash in the first place. I think that after this the same way american people stopped trusting banks they will loose their trust in the stock market. As of now that has not happen yet and hopefully never does because that would be the worst thing for them to do its the simple fact that its possible.
The one above is TRENIDY MARKS i accidently pushed enter way too fast
Its a really terrible case of how everyone's savings are just gone because of some irresponsible people. Will people get their money back once the economy stabilizes? I don't think that this issue has caused people to lose faith in the banking system but more in the people in charge of the economy.
the stock market is basically running on "expectations". for example, stock A has an original value of 20 dollars, but critics have expected it to flourish and rise above 30. therefore, more people purchase this "expected" price. economy of stocks runs on "empty money". the expectations and the fallacy is what's causing the current crisis.
It's honestly terrible that so much money invested are just gone because of such irresponsible people. Maybe the people in charge of the economy should be switched out for better money handling ones. When it comes to money, no one likes to play around. Simply, all we can do now is just wait and pray that the market returns and stabilizes.
-Tracy Kwong
After seeing all the banks diffusing into some dominating banks, how can public still trust the government even if it is evident that the money is still safe. But as long as the money is not in our hands it is not considered safe,this situation should not lead the people to panic because panic can only help to bring about depression,as seen earlier.This was caused by irrational behavior of some people. For which the normal stockholders money is put at stake, whereas the real reason is not being brought out only the vanishing of huge sum of money is seen.
to see the numbers going down and seeing how much money our stocks have gone down in our own project looks really scary, but when you think about it, it doesn't seem half as bad. you can only lose what you put into the market. you can't lose what you don't have. an estimate is just that. it's a number little else. things already look like they are starting to pick up a little though.
The stock market seems like it is starting to rebound; the Dow had the greatest single-day increase yesterday. Those who sold their stocks earlier, trying to avoid further losses, may find that they have lost too much and that the stock market is not for them. However, investors who kept their stocks may find that much of the value is regained over the next months as governments take steps to increase confidence. The current crisis may end up as a lesson to investors: that one must be willing to accept risk, and wait out crises, to be a successful investor. Perhaps people will remember in the future not to make investments hastily.
The stock market is always going to be a risk but you need to be smart about it. When they talk about how the "money is not really there" is scary. I have some of my college fund invested in the stock market and it is hard to see it decrease in value because it is in "risky" stocks. I am always glad to see when the market gets better and that college fund gets better. I hope one day that we can feel secure again in banking and markets.
I agree with this article that the notion of money is just an idea of the mind. In light, stocks (like the article said) is just a rough estimate of the worth of a piece of a corporation. Besides the physical realness of paper money, digital cash is almost as real as the tooth fairy (who takes your coins much like this financial crisis has). In actual reality, money itself is just an idea, a worthless, commonly accepted belief that people adhere to, and have "bought" into. So when you lose your savings, look at it in optimism: "i may have no moolah, but at least i got my family jewels!"
I understand that banks are underselling the idea and fact that people didn't really lose a large amount of actual money into thin air, but the fact that the american economy and banks have reached this status is scary. Though it wasn't stone hard cash that americans lost, people still lost plenty of money through the recent financial crisis. It is nerve-wrecking though that no one can actually hold on to that cash but that is the risk now a days. Now one can only pray and hope for the best.
This article alone could convince someone to cash all of the payday checks they receive and stash them in a safe behind a large picture in an old wooden frame. But the fact that the stock market has been historically shaky recently only makes it that much worse.
People who were thinking about investing in stocks have certainly received the message that that is a bad idea. People who can't remember a time when they weren't keeping track of the stock market, no longer want to. The past few weeks could show anyone that investing in 'potential money' with your actual money is way too risky.
The fact that money doesn't really have any set value is an unsettling truth. And it's certainly even more unsettling that so much money has been lost recently. Doing the stock market project shows you just how unsteady the stock market it. Before taking Economics I had no plans to invest my future income in the stocks, but now, I really don't think I will. It's just to risky. And although it's depressing to know that the wealth all over the world decreases in situations like this, it's somewhat comforting to know that it's not just the American economy that is suffering.
The stock market is never a sure thing, but people still need to invest their money in it. Although many have lost enitre fortuens because the market has been declining steeply, people are now coming to realize that they cannot be scared of the economy. Buying products helps the economy and the more people spend, the more profits companys will make, and the more their stocks will go up. The public is slowly realizing that they can't rely on their money to be in banks because banks are failing. People are now realizing that they cannot be certain about anything.
Like many have said, the stock market is a very tricky place. It seems so unfair to invest a certain amount of money in a particular stock, knowing fairly well that all that money could "vanish". And the big question... once the economy stabilizes, will these people get their money back? Sure, it's a VERY scary thought to know that so much money is being lost, especially now as the economy has taken a scary turn, but I find it more troubling that this "money" held no true set value in the first place.
The stock market is a scary thing. One moment your sitting rich with your stockes worth rising then the next moment you lost everything you have and are spraying windshields under 59. You never know whats going to happen or else everyone would be rich from simply trading stocks. If you invest do it wisely and know that there is a chance you may lose as well as gain.
Now this is a truly fascinating way of considering things. It is very true that the amount that "disappears" from your stocks is purely a value that was never there to begin with. The human mind just attributes the value of the stocks to a lump of cash, when reality, its not cash yet.
Considering this, it depends on how much money one puts into the stocks in the first place for them to "lose" alot of money. Only when you truly *sell* your stocks for money is when you actually *have* your money. Nothing is final until then.
More than anything, I feel bad for all the Americans who were planning on retiring. All the money they had saved over the years.. gone! vanished! And there is nothing we can do about it. I guess the most frightening thing to happen to a person nowadays is seeing everything they have ever worked hard for, disappeare.
The stock market is just like playing a game, you can hype it up, pump it up, get emotional, but at the end of the day all you spent was energy and the time you gave it. There is no money getting passed around. Some days you win and go home on cloud nine pockets full, others you lose and hit rock bottom empty handed. To bad we have been hitting the bottom for two weeks now.
Thats terrible that in this crisis the Government has nothing else to say but lets hope it goes back up. I mean what the heck i know this is cliche but "this is so not fair." How do they expect some people to survive now? Alot of people had money in the stock market or mutual funds and so on, but to just say "o well it'll come up". That isnt right. Where is our fallout plan? Where is our saftey net? In truth their is no saftey net with stock and mutual funds. It is all funny money. Its all Invisible. ='(
it is really scary to wake up one day and discover that you have nothing. Everything you were counting on to last you the rest of your life is gone. People start to panic and sell, sending the nation even further into economic turmoil. Although the stock market showed some kind of a glimmer of hope the other day, today it dropped back down. The only thing the American people can really do is sit and wait, and hope that this will all resolve.
This situation is really taking a toll on everyone, its most defiantly effected the money that was saved up for me and my brothers college. I think everyone needs to just keep their confidence in the banks and just wait it out. Eventually things will get better and hopefully money will be re-earned
To me...the stock market seems like a game. You invest your money into some type of stock...not knowing if your going to loose it all the next day..its definitely not a sure thing...yet people still do it. Maybe its the rush of uncertainty. Well whatever it is all we know now is that all those people who invested a lot of money into the stock market is now regretting it. Its sad to see the stock market value is going down, and millions of Americans are just waiting around to see how much money they lost even if they did not invest in the stock themselves. I guess all America can do now is wait and see if the stock market stabilizes again.
If there is no money, how did it vanish? Honestly, I am pretty sure everyone in 3rd period knows how I feel about the stock market and this just proves my point, PRINT MORE MONEY, money that is actually real. That way, people can actually know where there money "vanished" too. On the other hand, the stock market has crashed before, it is weird to me that people are blaming the stocks crashing when they are the ones who invested in them. I think everyone needs to just relax, like the lead singer from blood, sweat, and tears once said, "what goes up, must come down" and visversa.
The stock market hitting historic low, and banks going bankrupt, are effects of people not believing in their economy. If everyone would believe that the economy is going well, people would spend more. Also buy more stocks. In return, they would earn more money, either from a raise from their job, or buy gain money through stock market. I think there’s nothing to worry about, stock market will eventually go back up. It might not be as great as before, but it will go up to some point. If everything think like this, our economy is in great shape.
Money, many people assume all thier assets are in paper in some vault at some bank. Actually confidence is what keeps your money flowing. To many times have i heard in class throw your money in a safe and take it out of the bank. This philosphy is what led to the great depression in the first place. It is about trusting our governemnt to make the right choices to bring our economy up. have faith in America, and the economy will rise again
Like you had told us in class the other week. You're money is never really in the bank it is all virtual and in the computer. It's amazing to me how much of it that you think is there really isn't. And the fact that you think it is safe and then it totally vanishes is even more frightening. Let's all go with Amelia's idea and save our own money in our own secret vault :]. What ever happend to people hiding their money in the couch? Even with running the risk of someone taking the coins from inbetween the cushions. I am almost tempted to run that risk than have it lost in the bank. At least in my own home i would have better control over it.
The idea that the money is gone is just a fallacy created by the government to encourage patriotism and "good neighbor pollicies". Thats right i said it; there is a conspiracy of the government to get the American people to worry about banks so that South America will panic that our banks are failing and OPEC will back off with their fascist prices per barell. The gas is cheap isnt it? ;)
Its not only disheartening to find that every cent you once thought was safe and sound has suddenly vanished but to find that it never existed in the first place surely doesn't help the situation. The stock market surely is a risky business but who would have thought that people's lives were based on a transaction that had very little to do with what the common understanding of "money" really is. We have to realize that the tangible dollar in our hands is no longer the true concept of money that the world knows, surely even the dollar in you hand is not as tangible as you would like to think. Although this concept is a rude awakening, the truth is the one thing that will keep us on our toes and keep us from making careless mistakes with our finances.
-Ashley Abraham
Well of course the weakness of the conomy right now has greatly affected how people spend their money. People are less likely to waste money and spend more during an economic crisis, yet spending more money is what will actually help the situation. Banks don't fail by themselves. It the peoples own stupid fault for causing the failure of the banks. I don't think this will teach anybody anything except to be more careful where they invest their money.
I think that this will teach us to be a little more prudent with our money. Just like in the Great Depression, a lot of this was caused by poeple who were just trying get rich quick schemes. I'm hoping that eventually we learn from these mistakes and actually follow the advice of hard work really does pay off.
I can not belive that all this money is like disappearing. Its like what is the world coming to? Its sad that some people look forward to there retirement and things like that and due to our economic problems they probably feel like they are never going to see it and feel like they probably have to work forever.
This goes back to the whole idea that wealth is not a stockpile of gold and silver or virtual stocks but a reflection of a countries production. Makes sense Adam smith. We are scared. We buy less. Our money decreases. How sad... none of us are going to college *cries*
Our economy is definately in a horrible state...almost a second great depression. People are so aggravated and mad at our govt. about the stocks and about the bailout when they couldnt do much better... If people keep buying the way they do and let our govt work i feel everything will come back to a reasonable level
HAVE FAITHHHH
Does this mean that if we, the American people, had more faith in the worth of our stocks, the value of our stocks and the market would go up? This solution is so ridiculously simple, yet it is impossible. In that case, I hope we all can have more faith soon, because, considering the fact that I am going to college in 10 months, it would not help if my college funds were dwindling such as they are now.
A sense of security exists among people with their banks, they probably think they money is in cash form, locked up and waiting for them to take it out. I think it is just setting in that the money isn't there and that they will just get some when you want it. The confidence is decreasing, and understandably so. Everyone wants their money to remains theirs, and not simply disappear when someone's best guess is that stocks are going down in value.
Knowing that the money that you have been saving and investing for years is gone is beyond devastating. After being so used to such a strong economy, our situation now as a nation is even more shocking. I guess it would have made the situation a LITTLE bit better if the money were to have just been with someother source, but in our case its simply gone. As bad as the economy is at this point in time, all there is to do is to think positive and to hope for the best.
this article just goes to show the constant risk we are under in modern times with everything being computerized. For most financial records these days such as 401ks there is no consistent paper record that keeps up with it. Therefore, at the push of a FCC on a computer it could all disapear (die hard reference). There is no longer a metallic object that we can hold and own, this insecurity is what drives these buyers and sellers to be so worried about this invisible value and wealth that is constantly going up and down lately
The Stock Market.....Besides playing the game i probably will never invest in the stock market.mainly because it has its ups and down.Yeah probably when its up you will have a little extra money but when its down what do you have.Not a lot so rather just taking a huge risk why not play it safe.All these Americans just lost a lot of money due to over confidence in my opinion, in the stock market.
Well that is certainly disturbing. So our money is worthless and the only thing that is giving it any value is the idea that it has value? That doesn't leave much room for confidence considering how fickle humans are. It's hard to put faith in our economy when our money can become nothing but useless paper.
It really is a shame that so many people lost money for their retirements and future. With experts saying that stocks and bonds are just a figment of the mind is kind of wierd to understand. I think it would be a good idea for countries to start making money with actual value such as gold coins.
This is the time I think many people would lose trust in the bank and start burying their money like dogs burying bones. What happened to the money? Wiped off from the face of the earth because of some people's bad decisions?
Stock prices are not based on absolute price, since it is the "best guess" of the stock's worth. This is probably based on mainly public confidence, rather than on gold bars in vaults.
its hard to trust any bank with our money these days. Especially with the money crisis at hand. If the government doesn't do anything about it our future won't be as we expected. All loans, social security, and stuff won't mean a thing. If no one buys stocks or anything, things won't improve and we will end up in another depression. At this point all we can do is hope our economy can recover from all this.
It's sad that the money that you thought you had for retirement and college funds is suddenly gone but of course it was never really there in the first place. But Americans over spend this imaginary money kind of counting their chickens before they hatch. It's risky putting your money into the stock market because you don't really make or lose money until you sell your stocks.
The American people's confidence in stocks and finance is essential to the rebound of the market. As people lose money, they start to lose confidence in the market, therefore refrain from risking investments. The stock market and home values are very tricky and dangerous. As economy is doing well, owners of houses and stocks think theyre making money, however in fact, the values arent money until they are dollar bills in the hands. when the values are just displayed on the computer screens, they could go away anytime. It is a very scary thought that American stock values have gone down 80% means stock holders have lost 80% of their "money".
Reading the article and knowing what is going on with the stock market and this economic crisis,is only encouraging me so save more cold hard cash in my own house. Especially since my college fund went down thousands of dollars. all of this invisible money stuff i still dont get. i hate how i cant see an object but yet its disappearing,like the money in the stock markets.
So the only thing giving stocks a monetary value is the idea of it's worth? With such an unreliable way to determine wealth and still play a vital role in economy, proves to be at best, disturbing. If our money "was never really there in the first place" and can suddenly disappear without a trace, then what can we turn to?
Scary article. People may begin pulling cash out of the banks and stock market, and start putting their cash under the mattress if they read this. It worries me that our college funds are in banks.
People are losing their money but that's the chance you take when entring your share into the stock market. It can be good or bad. It's true what they say that it's all in the mind but we are greedy money hungry people that put a value on anything that walks.
I just dont understand how money, REAL money that you invest into something, can vanish??? That is completely ridiculous!! Plus if people know that their money is disappearing why would they put their money in a lost cause??? Either people are getting really stupid or we just have a horrible economy. Personally i think that its both.
I severly doubt that the fluctuations in the market and even the drastic changes seen in recent months will fundamentally alter the way that people concieve of money. In essence not much has changed, so everything is pretty much the same.
The stock market is a risk every stockbroker knows about. If you are spending money to buy stocks in the stock market, you better be ready to lose money. The stock market is like a game of chance. If you land on a good spot, you a little profit. But if you land on a bad spot, you lose money. The stock market is a risk. People decide how much that want to lose, not the company they invest in.
What is tragic is that it took American's loosing everything they have to realize that "money" is little more than a number in your banks computer. It just makes you realize how sheltered we are and how little we really know about how the institutions we trust are run :/ Regardless of our romanticized beliefs we aren't invincible and all-knowing just because we are American.
When money starts disappearing we obviously change our habits to limit our investments. With the stock market project, we are quite reluctant to purchase risky stocks and there has already been a decline in sales of durable goods. I think we will learn to much more appreciative of what we have and definitely not waste a lot of money on unnecessary stuff.
for a long time, people had the wrong perception about thier money and stock market. usually they picture a huge vault where their money is safe and sound. but the fact is that is more a figure in some computer rather than actual substance. it worries everyone to hear that their life savings, just..just vanished, like that. but like they always say. its always a risk to play with the stock market. its kinda funny when you think ahout it. because there was no money int he first place for it to vanish. but ya when it comes to reality it is sad that our stock market is going down. all we can do is hope.
I think that now that our country is in, what, 10 trillion dollars(?) of debt that it definently will change the way the upcoming generations keep a hold on their money-whether it be like our grandparents! by putting it under our bed! the banks as well as the stock market are a big roller coaster or other creative ways..its even affected how our parents will handle their money
I think overall, people are scared to invest their money in anything right now because the future seems uncertain. People have seen other investors lose almost everything, any they're scared to let it happen to them. On the other hand, for the few brave (and probably well-off) people who are still making major investments, they'll probably see major profits if we ever pull out of this recession and prices begin to go up again. There are some major deals to be had.
I, for one, am not too crazy about the stock market. Playing the stock market game during a time of depression definitely did not help alleviate my wariness about the stock market.
On a different note, people are going to be cautious about where they put their money during a depression. If banks start to fail, people are going to think twice about putting their money in a bank. It's human nature.
What happened to all my money? hahahah that's what i said when i was playing the stock market game . I can't imagine losing real money but thats stocks for you. All americans can do is just wait and hope that the stocks will go back up. What i've learn from the stock project is to not be so greedy because eventually stocks go down and I think America became to greedy and this recession hit us in the time we least expected .
I feel bad for everyone who has put money into the stock market. People have relied on that money for so long for things that were going to come in the future. With just a few seconds, all of the money has been taken away from them. There is no sign if the end is near, but I surly hope that it is. It is sad to think that peoples life are actually being ruied over stuff like this. Like that German billionare that commited suicide, that's really sad. And all for what? Money? What a shame, George Washington.
Mr Pye this article link has expired so I can't read it, but I thnk it was about the stock market crash or something and i think it was horrible that everyone lost their money but that is just the way of the market there is really nothing people can do but ride it out and hope for the best
it sucks if you lose all your life savings because the market goes bad, you cant always trust banks. the best way to keep your money secure is to hid it under your matress like old people do, because they dont trust banks after the great depression
its mind blowing to think about how the main thing that keeps our economy running can just disappear. Its so easy to forget that money doesnt get its value because you earned it from working your butt off at your job but because the government says so and the economy is stable. If anything happens to either of these things all that money you rightly believe is yours is just gone....
Well of course the weakness of the conomy right now has greatly affected how people spend their money. People are less likely to waste money and spend more during an economic crisis, yet spending more money is what will actually help the situation. Banks don't fail by themselves. It the peoples own stupid fault for causing the failure of the banks. I don't think this will teach anybody anything except to be more careful where they invest their money.
It's sad that so many people are losing money. Money that they had been counting on for retirement or whatever. It is hard to put faith in our money when it is only backed by consumers' confidence in its value. I feel like with this system if their is a tiny problem things will just always go from bad to worse.
People's perception of money isn't as concrete as they think it is. The money you put in the bank is much more a figure in a computer then actual substance. Banks don't pull all the money they get in transactions in a big vault where everyone's money is held. A very small value of it is actually held at the bank.
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