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by Qhemlomo 10 days ago
They can sit it out but that doesn't mean no one paid the bill.

And some others might need to pull out when its down.

Money doesn't appear out of thin air.

Why would it lead to recession if a handful of big companies lose money they have?

It will show that the USA is in a recession for sure, but otherwise

2 comments

No, asset values are not like energy. There's no conservation rule.

When stocks get bid up, market valuation goes up far more than the amount of money that changed hands. Most of the market cap appears "out of thin air." It's just what people think it's worth.

And when the stock goes down again, it goes back where it came from.

The investors who bought stock at too high a price lose some of the money they put in, but there are others who never paid that price.

But thats the point. Your last sentence is the problem:

Investors proping up stuff by 20%, 401k and etf etc. regularly invest, investor drop out.

Who loses? 401k and etf.

Money was transfered.

Same shit happen to my company share: Price jumps 40%, company has to buy them because of employer benefits, I auto buy them, price falls back by 40%, what happened?

Investors extracted money out of the company and me.

> Money doesn't appear out of thin air.

In fact [fiat] money does appear out of thin air (well, created by banks when they originate loans) - and has to to support a growing economy. Unfortunately, for various reasons, rather too much has been appearing, and has been funneled to the already wealthy.