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I don't think there's a meaningful correlation between my quality of life and the health of the stock market. am I being naive? feels like nearly everyone freaking out about the economy is kinda faking it? like watching an in-joke that I'm not in on? what?
@RichDecibels The worry in the US is that the stock market drop is predicting a large recession where millions of people lose their job for a long time. If that happens it will have a big impact of quality of life for them and people close to them.
@RichDecibels there is definitely very little likelihood it will be felt immediately. the ways it potentially will be felt will likely be hard to trace back to any specific recession. you donât tend to notice things that could have been available had there been no recession
@RichDecibels reading this tweet, it occurs to me that the stock market is simply one of the current best shared, global suite of metrics we have as proxies for things we collectively care about. that doesn't mean it's very good; the extent to which it feels distinct from lived QoL is telling
@RichDecibels same. is it because your qol is based on other kinds of value that are not hyper dependent on the economy? for ex. my qol is based on health of soil, purity of air, wholesome social interactions etc.
@RichDecibels Itâs possible that it is very weak for you personally. Often stock market drops are corrections of speculative error. This one isnât. It predicts a sharp decline in trade, manufacturing, and discretionary spending at all levels due to loss of revenue and much higher uncertainty.
@RichDecibels The stock market is a leading indicator of real world economic pain. A rapid fall suggests bad conditions ahead Worse news is the bond market. US interest rates rising in conditions they'd normally fall. Suggests US govt debt crisis and end of postwar system
@RichDecibels lots of younger people justify the decisions of their lives through money and lots of older people live in everyday fear of running out of it. the stock market meltdown heightens this anxiety. this seems straightforward - even if completely sheltered, imho.
@RichDecibels Interesting. Are you from a class that is generally insulated from market swings? Either upper class or lower class w/out assets. Dot com crash bankrupted my family. 08 was ok because I had in demand skills but did got laid off & I lost everything I had in the markets
Stock market crashes can harm people directly, but it's also a harbinger of future economic conditions. When it's operating well, the stock market is a very accurate prediction market, predicting how profitable corporations will be. Right now, the market is telling us that corporations will be significantly less profitable than we expected before Trump took over. This can affect your quality of life in several ways. It could result in you paying higher prices for ~all goods. It could result in your source of income being in trouble. Ripple effects could mean that your local economy collapses. Larger ripple effects could mean the US/world goes into depression, which has profound effects on almost everyone
@RichDecibels You hereby invoked Cunningham's law. Post the wrong answer and it will prevail because nobody knows the right answerBut as Gary Shilling would say: the market can remain irrational longer than you and I can remain solvent
Imagine living in a house with running water. You donât personally maintain the pipes, the reservoir, or the treatment plant, and you don't have a mental model of how it is all connected. You just turn on the tap and expect clean water to come out. Now, someone says, âI donât see how the health of the water system affects my quality of life! Iâm doing fine! Why should I worry about the pool of a hotel? I have my water all on my own Ok.â But thatâs because everything upstream is working for now. The stock market is akin to l the water infrastructure of a society. It _reflects_ (imperfectly, yes) the flow of capital, the health of companies that employ people, and the ability for pensions, loans, and innovation to exist. It tells you the degree to which people can *act* on opportunities and potentials everywhere. We may not see the connection every day, but if the system upstream breaks down( banks freeze up, businesses collapse, credit dries up) that water stops flowing. Jobs vanish. Prices spike. Opportunities can't be acted on etc. So saying the stock market doesnât affect you is like saying the water reservoir doesn't matter as long as your faucet still works. It may feel true... until it doesnât.