By Arun Gupta (February 10, 2018)
If you care about what’s happening in the financial markets, now is the time to panic. But then again, if you care, you are probably in the top 10% in terms of wealth in America as they own 84% of the stock.
On Monday, I shrugged at the 4% drop in the markets in one day as there was nothing unusual about that in historical terms. But things change fast in such a volatile market. The major indices were unable to make a recovery on Tuesday and Wednesday, and have now plunged to new lows, putting them into correction territory. That means a drop of 10%. If they drop 20%, that is the definition of a bear market, though in the last 20 years the two major bear markets saw brutal downturns, with a 50% drop in the S&P500 from 2000-02, and then a 60% drop from 2007-09.
A 10% drop is a long way from that, but indicators are looking ugly. This can turn out well, actually, as Trump has tied his fortunes so closely to the market, a downturn will hurt his and Republicans political standing.
Effects on the economy should be muted because it is doing about as well as a kleptocratic neoliberal system can be expected to do. But if the markets keep falling, going into a 30% or more decline, then it’s likely unemployment will increase. Which Trump will, of course, blame on immigrants, Democrats, Obama, and antifa.
On a personal note, I find the financial markets to be infinitely more fascinating than sports. About the worst thing that happens in sports are white bros rioting, as in Philadelphia. But the financial markets stoke wars and revolutions, topple governments, create widespread social and ecological chaos. It’s ugly, but it’s a lot more interesting, to me at least, than events like the Stupid Bowl.