what does it mean by $2.9 trillion wiped away due to losses in Stock market. Where did it go?

Question

Where did the money actually go? Are these small startups or individuals that have gone bankrupt that totalled this amount ?

In: Economics

Answer 1

Value does not equal real money. Let’s say last year I bought two paintings, each for 1000 dollars. And today both painting are valued at 10,000 dollars each. I don’t have 20,000 dollars,only two painting valued at $20k I decide to sell one painting for $10k. Now let’s say that tomorrow the painter goes on Twitter and says Hitler was awesome. Suddenly the value of the painting will drop at 1 dollar. Now in an instant both me and the buyer of that one painting, we both lost 10,000 dollars each. The seller lost real money because he paid $10k for something that now is worth $1. But I too have lost $10k from the market’s perspective because I’m left with the second painting,suddenly also without any value. The painting market lost 20,000 dollars.