How market panic can feed back to the world economy

FINANCIAL MARKETS have not endured a day as brutal as March 9th since the global financial crisis of 2007-09. Stockmarkets were a sea of red ink. The S&P 500 index fell by 7.6%. The FTSE 100—laden with oil firms, such as Shell and BP, and other natural-resource companies—suffered a similar drop. Investors rushed for the safety of government bonds. The yield on ten-year American Treasuries dipped below 0.5% for the first time ever. Investors sought other havens, such as the yen.

But why the panic? Cheaper oil ought to be a balm to the world economy. The oil-price spikes of the 1970s and early 1990s led to recessions because they transferred income from oil-consuming countries in the West to oil-producing countries in the Middle East. The consumers were forced to cut spending, but the producers saved much of their windfall. The net effect was to squash aggregate demand. So a sharp drop should act as a stimulus.

Russia—the tactical target of Saudi Arabia’s price war—is different. Since 2014 it has run orderly monetary and fiscal policies. It has been a net provider of credit to the world, not a net borrower. And it has saved a lot of its surplus oil revenue for a rainy day, by basing its budget on an oil price of $40 a barrel. Middle Eastern and African producers have not been as disciplined. Saudi Arabia itself needs $80 a barrel to balance the books.

Every single time we have a Republican President they crash the economy. Thankfully, Trump managed to do it in his first term (he has a knack for quickly squandering inheritances), so we won’t have to endure a second term.

Markets are anything but rational; they have no expectations other than those of one trader other traders, all interacting to create market indices. On a day like March 9, look for who made the killing. Take those out, and what you have is a bunch of morons on the floor.

On the other hand it is the best time to invest money in the stock market. Prices in the stocks are very low and the probability of increasing the index values in the following quarters are very high.

Where are they putting their money? Mars?

😂 Не нужно ложных выводов США - давно банкрот! Рухнула выдуманная стабильность нефтенных фьючерсов которые на самом деле на бумаге на 75% более реальных продаж нефти - чем и колдовали США выдавая это за стабильность и правило торгов теперь вы можете лишь только - ими подтерется!

It's not a panic. It's a logical response to economies grinding to a halt due to pandemic. I thought The Economist believed in the Invisible Hand of the markets.

alllibertynews ^link to new blog on election season^ Presidential Race 2020 Coverage: DDU Founder proclaims 'Trump is Bound to Win'

Aaw poor dum dumb!

ประเทศไทย ข่าวล่าสุด, ประเทศไทย หัวข้อข่าว

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World stocks sink on coronavirus shock, oil price crashGlobal share markets fall as panicked investors flee to the safety of bonds and the yen to hedge the economic trauma of the coronavirus, while oil plunges more than 30% after Saudi Arabia opens the taps in a price war with Russia Saudi Arabia's move, whether intended or not, will ease the global economic crisis by lowering cost of fuel while also collapsing the Russian economy because Russia can't compete with SA & ruble is heavily based on oil. It's a good move by KSAmofaEN - Russia, check! I'm going deeper underground, there's too much panic in this town Russia will be the loser here they wont be able to compete with the Saudis and a reduction in the price of oil will help to cushion some effects of the Virus for global industry
แหล่ง: Reuters - 🏆 2. / 97 อ่านเพิ่มเติม »

'Fear is now pervasive,' oil expert Dan Yergin says amid market routThe world is in a period of 'true turmoil,' with financial markets and economies in crisis while a novel coronavirus continues to spread rapidly, oil guru Dan Yergin told CNBC this week. It’s happening — like we’ve never SEEN before How much more irrelevant must oil get before we get serious payback for the Saudis funding and orchestrating the 9/11 attacks? oilprice oilwar OilCrash Gas prices fall works get a pay raise
แหล่ง: CNBC - 🏆 12. / 72 อ่านเพิ่มเติม »

Coronavirus fears have seen oil prices suffer historic collapse in global market panicWhile the death toll has climbed to more than 3,800, around 88 countries have yet to report any cases of the virus, while at least 62,053 people globally have recovered from the injection.
แหล่ง: Newsweek - 🏆 468. / 52 อ่านเพิ่มเติม »

US Treasury yield curve drops below 1%, big red flag for investors - Business InsiderThe entire US yield curve plunged below 1% for the first time ever. Here's why that's a big red flag for investors. Eagle4kw
แหล่ง: BusinessInsider - 🏆 729. / 51 อ่านเพิ่มเติม »

How to Keep Calm as Coronavirus Fears Turn Into Market PanicMarkets are usually driven by greed or fear. On mercifully rare occasions, they are driven by outright panic. Monday’s price movements as Asian markets opened were one such occasion. You heard that on the street? From some permabull charlatan at CNBC no doubt. I can't hear anything on the street because all the blood in the streets is clogging up my ears Facts should be enough to temper fears. Too bad fakenews has skin in the game to keep the hyperbole alive. WE’RE ALL GONNA DIE!
แหล่ง: WSJ - 🏆 98. / 63 อ่านเพิ่มเติม »