Your Questions About Summary Of Stock Market Crash 2008

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Richard asks…

Summary of the Economic crisis?

Can someone give me a summary of the Economic crisis since 2007/2008, it started out with the sub-prime mortgage loans right?

Justin answers:

The US economy was struggling the whole period 2001-2007 with low yearly growth, flattening wages, and worker population increase (especially through immigration) making a tightening job market. People compensated for the economic slowness with real estate speculation and stock speculation. This drove up real estate and stock values every year till they were way over valued (they weren’t really worth their stated values but far lower ones).
Meanwhile a unregulated mortgage industry and credit industry were passing out mortgages/ and credit to people who they knew (should’ve known) couldn’t pay it back. The people wanted the easy mortgages and easy credit because a lot of people due to flat/ declining wages were living on mortgage refinancing and credit cards to make up the difference. The credit card companies and mortgage companies wanted it because they were making a lot of money on the interest and fees on all the loans. In addition the US government every year 2001-2007 added hugely through budget deficits and tax decreases to an already huge public debt. The situation could not last.
People began not paying on their mortgages and credit cards. The economy went into recession Dec. 2007 beginning to shrink. The end holders of the credit card debt, the mortgage debt, public debt, realized they were holding mostly ‘bad debt’ (worth way less than it’s stated value) and the ‘crash’ occurred summer 2008 as everything fell to it’s real value (wiping out about 33-40% of stated value). Such a big loss couldn’t be absorbed and the mortgage companies, credit companies, many banks failed and the stock market crashed as everyone sold.
In 2009 the government saved the mortgage companies, credit companies, and banks so the US would continue to have an economic structure and made up most of the losses by adding hugely (again) to the public debt. It then placed new regulations on mortgages, credit cards, stocks so it wouldn’t happen again.
This returned the economy to soundness. However, the economy had shrunk so much during the ensuing recession 2008/2009 that 15-20 million people from the work force were thrown more or less permanently from their jobs. This huge number of unemployed missing from the work force then kept the economy from returning to prosperity 2010-2012.

Daniel asks…

Stock Market. Please Help.?

I am a High School Student and i just need someone to explain to me or give a simple website that simply explains how the stock market has been for the last 10-11 years..just like important facts, like rises, downfalls and generl explaination of how it’s been..someone please help, i would highly appreciate it. Thank you very much and have a nice day =].

Justin answers:

Alright I can give you a brief summary about how the American stock market behaved since 2000.

– Late 1990’s = Major bull market for tech stocks. Everyone wanted to own one, often giving multi-billion dollar valuations to companies that haven’t even earned anything yet, all because it had a “.com” in its name.
– 2000 – 2003 = Bear market caused by deflation of internet bubble.
– 2003 – 2008 = Great bull market.
– 2008 = Stock Market crash & Subprime Mortgage Crisis
– 2009 – Persent = Slow recovery

Chris asks…

Is the World Wide Web proving what the bible says to be true?0r just the collective consciousness being tapped?

In 2001, the bot operators began to notice that stock market predictions were not the only matters being accurately predicted by the program and they began to take notice of the coincidence with occurrences and explored it further.

One of the First Accurate Predictions From the Web Bot Program Took Place in June of 2001. At that time, the program predicted that a life altering event would take place within the next 60-90 days. An occurrence of such proportion that it’s effects would be felt worldwide. The program based it’s prediction on its filtered web chatter content which, I guess you could say, ultimately represents the collective unconscious of society.

Regrettably, the program’s prediction proved accurate and the Twin Towers fell on 9/11/2001.

This is where it starts to become interesting. The bot program also predicts a worldwide calamity taking place in the year 2012. For those of you who study astrology, prophecies, and the like, you may already be familiar with this date.

Since then there have been a slew of predictions, some of which follow:

• The Space Shuttle Columbia tragedy when the bot predicted a maritime disaster.
• It accurately predicted the New York blackout in 2003.
• It forecast a major event in relation to Las Vegas 65 days prior to 9/11 – when the terrorists were actually in Las Vegas.
• The bot stated there would be an attack related to a commemorative event prior to an American 587 crash on Veteran’s Day.
• It read that there would be an attack on the house or assembly prior to the anthrax scare.
• The bot stated gun shot wounding referenced to Vice President Dick Cheney.
• Anthrax attack in Washington DC in 2001.
• Massive east-cost power outage in 2003.
• Earthquake in August 2004.
• Water-rising which lead to the Tsunami in December 2004.
• Hurricane Kathrina in 2005.
Crash of the US dollar beginning late 2007.

A summary of the 2008 predictions:

• Catastrophic collapse of the dollar is possible – as the language is active around that concept.
• Some kind of winter/spring natural disaster which caused people to become angry about government response.
• Possibly early elections, or at least calls for that because of anger.
• Global economic collapse possible in fall 2008.


Justin answers:

Bot trends don’t show what’s correct, just what people are thinking. The market is built on what people are thinking.

Maybe you should have read the follow up article to the one you linked where he explained that web bot can’t predict things like natural disasters or the end of the world.

David asks…

How scared should I reasonably be of the stock market plunge?

I don’t own any stocks or anything. But a few people at work are practically saying this is the end of days. One guy says he bought some guns and is stock piling food because soon there will be rioting and starvation. But other people say it’s only because of people like him who over reacts that there’s any concern at all. They say to continue business as normal. But let me be blunt, no one I work with, myself included has any real knowledge of any shit beyond what TV tells us.

So logically speaking at what level of concern should I have right now? Like should I be fattening up my pets in case I need to eat them, or should I just not worry and go on with my life?

Justin answers:

It’s not irrational to be very worried at this point.

Unlike the last recession, we had a lot of ‘brakes’ we could apply to the crash – the government bailed out the banks, stimulus spent, printed money to sell bonds and treasuries, etc. Not to mention, no one really thought the crash would be as bad as it was, so it took months for people to exit the market (and drive the markets down to their bottom).

If we crash again, this time there will be NO brakes. The gov can’t spend anymore than it has without destroying its currency (which means hyper inflation… Ie. A loaf of bread will double in cost).

Also, if we crash it will probably happen MUCH faster than last time because everyone is so afraid they will bail much quicker than they did in 2008.

I’m not prone to being doomday-ish about these things, but if you have the ability to store food it’s not a bad idea. Even if society doesn’t fall apart, you’ll save money because what costs you a dollar today will cost you 2 or 3 dollars in a year.

But in the grand scheme of things, soceity won’t start to break down until unemployment reaches 20 per cent or more. At that point we’ll have riots and crazy stuff start to happen.

In summary, no you dont have to worry right now (people invested do, but everyone else doesnt). In a few months, who knows, it could be a different story.

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