How does the plunging stock market affect ordinary citizens?
By oyenkai
@oyenkai (4394)
Philippines
October 1, 2008 4:46am CST
It doesn't matter if it's an American citizen or not, just citizens in general. If one's country's stock market is plunging, how does this affect the tax payers?
This question originated from what I read in the news today about tax payers vote against the $700B bailout for Wall Street. Wouldn't not-bailing-out boomerang at the people? Or is it really just the fat cats that would benefit from it?
3 responses
@tulipstrader (1467)
• India
18 Nov 08
most of those who affected are the ones who really needed some extra money from their funds and invested in long term. stocks are slaves of earnings, market sentiments, economic cycles, rumours etc.
many who have invested were probably retired who had a good amount in hand. might have seen a year of consistent gain. so when he saw a good profit he did not cash out. analysts and brokers encourage everyone to invest in long term while their outlooks is just their commissions and bonuses.
$700 billion package is a hard slap for the honest taxpayer. he is being penalised for the misadventures of greedy wallstreets and bankers.
1 person likes this
@ParaTed2k (22940)
• Sheboygan, Wisconsin
1 Oct 08
If you have any kind of investment based retirement plan, then the Stock Market does effect you. Of course, if you aren't living on that plan yet, it doesn't impact you as much as those who are retired.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
8 Nov 08
Many voters didn't support the bail out because, while it may or may not have been a good idea, the execution of it was all wrong.
@mazdakid (347)
• Philippines
20 Nov 08
ordinary people (like myself) who are directly investing in the stock market are directly affected, most definitely. in fact, my 200,000 pesos investment is now a mere 25,000 pesos in just five months. my mentor claimed that the "subprime crisis" will not last very long, but he was SOOOOO wrong.
ordinary people who have trust funds or involved in insurance or any investment product offered by institutions are also affected, since their investments are also invested in the stock market
ordinary people who are not involved in trading or funds will still be affected, since the companies who are listed in the stock market are affected by plunging stock prices. this is part of their capital, and when their share prices drop, their capital shrinks. either the company closes, downsizes or increase product prices. such companies may be petroleum companies, banks, department stores or even crop producers.
plunging stock markets also trigger financial and economic crisis, which may result in inflation, stagflation, or even the dreaded hyperinflation (imagine the Federal Reserve having to issue a single $100,000,000,000,000,000,000 note just to buy a bar of soap). when commodity prices skyrocket, the ordinary consumer gets affected.
