Obviously if it keeps going down, that’s bad. But it looks like it’s at a support level and still much, much higher than it was 5 years ago. (Using SP500 as a proxy for the market at large)
In: Economics
These are not household traders panicking. You’re seeing large funds maneuvering because the Japanese finally increased their interest rates above 0%. That’s right, 0%. Though it only increased it to 0.25%, we’re seeing a major downturn because many funds used Japan’s currency (yen) as cheap foreign exchange collateral and are now frantically selling very nicely appreciated US stocks to wiggle out of their Japanese cash positions.
9 times out of 10, whenever the question “why economy bad now?” comes up, the answer isn’t the economy. It’s these large funds making big money moves.
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