So where did this 1 trillion dollars we lost go?
 

When someone loses, someone else gains.

So who gained?

no one

it was all imaginary wealth we lost folks.

Just like porn, imaginary sex ^^

Correct me if I'm wrong but everyone who didn't own stocks gained because lots of dollars disappeared and thus the remaining dollars are worth a little more.

What the Dow lost is penny change to what the housing value fall is.

Ya the housing market is going to fall even more than the Dow

Housing is close to a bottom.

The fed put 250 billion in to Fannie/Freddie last week to
give out in low interest home loans and rates will come down another 100
basis points to 4.75% or 5.00%. This news didn't get covered by the news media
but it will soon.


Home sales in California jumped 35% in the last 30 days and when the full effect
of the Feds injection hits it should push many to buy new homes which will get the existing inventory down to normal and then there will be a shortage late 2009.

Oil is down to $90 and will continue going down and the price per gallon will be close to $2.00 soon and this will fuel spending. We may have a short recession but maybe not ?

Thats a false supposition, gaining a loss isn't a net gain.

Also there is nothing imaginary about it. Tell a school or a hospital they won't be recieving the tax because of a lack of profit on the negative trillion dollars and see how imaginary it is.

Yup! I agree with the housing market - but not on the gas. I don't think gas will ever get back to $2.00. But, if oil prices continue to fall, demand continues to fall, the BAIL OUT is NOT DONE, the DOLLAR continues to rise... then $2.70 is not unreasonable.

well.. I don't think it was imaginary. From what I understand, some dude many many many years ago realized that gold was the most standard form of currency. He then started to hold it for people so they wouldn't have to hold it them selves. He could secure it, and protect it, and when they wanted it they could just go and get it. He'd charge a small holding fee.

In time he realized that people were leaving their gold there and not coming back for a while so he took the gold and would use it to invest. When someone would ask for the gold, he would either give them the gold or give them a receipt, a paper indicating how much gold they had, and that the paper was backed by the gold.

In time everyone just wanted the paper and would use that as the currency.

Soon, more people came and they wanted their gold, but their gold was being used in investments and so although they technically had the gold, it wasn't there, so the man would give them the paper receipts knowing that the gold would come back one day when the investment was returned.

Now, more and more paper was accepted so the man just kept printing it up, and the people didn't seem to care. They were still able to buy shit and get shit, even though they didn't have shit.

One day someone realized what was going on and so all the people went to collect their gold, and there was none. It was all tied up in bad investments. The system collapsed.




So then... as far as I can tell... we didn't lose shit, because we never really had shit. You can't lose what you never really had.

Welcome to Thunderdome, Max.

We are all going to die!!!!!...

Well, not me, but YOU, the americans, are ALL GOING TO DIE!!!

I think I heard on the news here yesterday that one banker is walking away with 160 million payout?

Time to go back to the good 'ole barter system. :1orglaugh

This week paysite memberships can be had for two laying chickens and a one-eyed sow.

It's only imaginary to those of us who didn't just foreclose or lose millions as our stocks took a massive dive. :2 cents:

The housing market is doomed.

Remember, the biggest generation of the USA population (total people) is the baby boomers.

78.2 million
Estimated number of baby boomers, as of July 1, 2005. <http://www.census.gov/popest/national/>

57.8 million
Number of baby boomers living in 2030, according to projections; 54.9 percent would be female. That year, boomers would be between ages 66 and 84. <http://www.census.gov/ipc/www/usinterimproj/>

In the next 20 years approx 20 million boomers will die.

That is a large chunk of home owners. When Grandma and Grandpa die in Florida (in Sarasota Florida they call the ambulance sirens "The Sarasota Symphony" lol) what will happen?

Their houses will go to the kids right? Well the kids won't be able to afford to pay the taxes, so they will either

1. Move into Grandma's house in Florida, and attempt to sell their current home in Jersey
or
2. Try to sell Grandma's house (Good Luck).

Real Estate is not getting any better. There will be so many retirement homes for sale... that ripple effect will be huge.

Then the other 57.8 million that are left in 2030 will start dropping like flies, worsening the situation.

mmmmmmmmmmmmmmmmmmm, I smell some damn good buying opportunities over the next year for those of us who didn't get overextended with debt....

Your mom

I don't remember anyone asking where it came from when the market gained $1 trillion.

It is not such a great mystery. Stock represent ownership in a business. All of you have corporations, right? When you set up those corporations you declared how many shares represented ownership in your business and most likely gave yourself all those shares. the value of those shares is the value of the corporation divided by the total number of shares.

Now for a public company the price can vary quite a bit from one day to the next or one year to the next. This is because the price that someone is willing to sell their ownership in the business is determined in a market. That price is dependent on many things such as their mood, how much they bought it for, what other opportunities there are, interest rates or ever what everyone else thinks that day. In the short run the demand and available supply of shares can determine the price.

But a company and it's shares have real value. For one thing a business can take the bare minimum needed in order to maintain the business and reinvest it back in the business. The company can then distribute the rest to the shareholders as a dividend. There's a value to that. Something people are willing to pay for.

Anyway, yesterday everyone was in a bad mood.

Tell that to the 75 year old guy living off of his 401(k), or the guy nearing retirement who now has to work 5 more years because 10% of his life savings was wiped out.

I put $8000 in cash into my and my wife's IRA this year, now what's left of that is more like $7000. That's not imaginary money.


The problem is in your theory that if someone loses that someone else gains. That's not true, economics is not a zero sum game.

+1 to the SnakeDoc

I guess technically you could find a winner and a loser in this situation, now that I've had a few more minutes to think about it.

The winner would be the person who bought the stock for 10% less than the person selling it paid for it. Although that person could be the big loser tomorrow, etc.

Who won when the market crashed in 1929? Were the 40% of people who were unemployed after that "imaginary"?
We're used to seeing the stock market as just numbers on a screen during the daily news report, and if you don't have money in the market it may seem theoretical to you....but those numbers represent millions of people's 401(k), IRA, pensions, and life savings.


I was trying to explain economics to my 10 year old son a few months ago, and I told him that psychology is the single most important factor. When the economy is good, people act like it's good....and they spend money, borrow money, loan money, and therefore the economy continues to be good.
When people think the economy is bad, they act like it's bad, they don't spend money, don't borrow money, don't loan money, and the economy continues to contract.

The biggest thing FDR did to get us out of the great depression was restore confidence. Once people felt like there was someone in office who was going to "do something" they started acting in a different way, and the economy started growing again.