[mathattack]

Thank you for the comments.

Here's the point I'm making...

Let's take an oversimplified view of the world. 1) In 2008 a company has $1 billion in stock value, no debt and goes belly up. 2) In 2009 a new company starts with $2 billion in debt financing, and $100 million in equity financing.

According to a "Total stock market cap" there is a drop. But that drop doesn't mean anything. A larger company was created in it's place. It just gets missed because of the debt financing.

Similar things happen within a company. If a $1 billion company goes private in a leveraged buyout, there will be $1 billion less on the public equity side (in the total stock market capitalization) but you're not measuring the increase in privately held equity or debt side. The total value of equity may also change if companies issue or pay back debt, or issue or buy back equity.

The main point I'm arguing is that total capitalization of stock only doesn't tell you much, for the same reason that only looking at equity on a company's balance sheet is an incomplete picture.