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Who is watching the stock market today? Anyone teaching real world economics today?

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And the 3/4 percent fed rate cut. I can see that they think they had to do something, so they cut the percent. But it seems to me that the main problems in the economy were caused by too much debt (leading to crazy mortgages that are now only starting to default; and to too much credit card debt which are now starting to default). I don't see how encouraging people to borrow more and save less, by making borrowing more attractive and saving less profitable, is helping any.

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Well, my dh and the analyst on public radio both think that this wildness is being caused by sentiment. My dh blames media no-nothings for flinging their arms about saying they've never seen anything like it! Much of the worry sentiment comes from the subprime mortgage problem. The radio analyst mentioned that stocks are not over-priced currently according to historical data, so now would actually be a reasonable time to buy.


The sudden 3/4-percent interest change is ridiculous. My dh says it just shows how out-of-touch Bernanke has been. He has ignored the need for a gradual incremental drop, and just did it all overnight in response to market panic. My concern is that such a sudden big drop may fuel inflation, which came in higher than expected last report.


With the stock market, it is important to take a long view and to observe trends. The daily and weekly ups and downs, especially now that we have a world market economy, often do not reflect reality.

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Hi Sara,

I was watching! I agree, to much debt is dragging things down, why would we encourage people to go deeper in debt. The stock market is so volatile at the moment, I'm glad I'm not heavily invested in it.

The market made me nervous, I showed the headlines to dh (who is a CPA and mister tight fisted with money) and he once again stated he was glad we live a simple life. We made the choice to live much simpler about 10 years ago, much cheaper home in older neighborhood versus nice neighborhood, drive older but paid off cars, use debit versus credit cards, buy what we need, not what we want. A simpler life really helped not to freak out when these headlines come up, but CNN sure did look scarry today!

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