Thursday, September 04, 2008

I'm not an economist ...

... which is why I'm really confused here. I could understand that high oil prices could have an adverse effect on the market. But now, less than a couple of months after cripplingly-high oil prices, the thought of low oil prices is contributing to a slide in the stock market.
Stocks plummeted Thursday, with the Dow plunging around 345 points as mixed retail sales, lower oil prices and dour labor market readings amplified worries about a global economic slowdown.
Whiskey. Tango. Foxtrot. You can't win for losing nowadays! I feel like I'm stuck in the movie Memento. No short term memory whatsoever!


kcsphil said...

It's actually pretty simple - the "markets" actually value stability far more then volitility. If oil prices had remained in a slow and steady climb, or were level, the markets would not have batted an eye. The reason - companies whose stocks are in the markets can't effectively price or predict production or orders when supply prices (and oil is a supply in many forms). Thus, it becomes much harder to tell how a company will do profit-wise in the future, and so the market can't forward value the stock.

Or something like that.

Thomas Joseph said...

Makes sense I suppose. Now that I actually earn a paycheck (graduate school doesn't count), this stuff bugs me more. Having something to do with my retirement accounts is probably one of the factors resulting in my angst.