The stock market is driven by perceptions, fears, doubts, and expectations. there is no truely solid basis for its movements. at best, the procresses that contribute could be equated to circumstancial evidence. More recently, based on the stock market, there are "futures." futures seem to affect the stock market even as they attempt to predict it. (if anyone is un-aware but still following, futures can account for gas prices rising int the STates) How did this dogmatic mess come to exist as it does?!?!? Has anyone theorized on a way out? why was this able/allowed to happen as it did?
2007-12-09 20:33:22 · 2 answers · asked by Anonymous in Social Science ➔ Economics
Gambling on expected risks is the nature of capital markets which has been going on since they started. A lot of people have theorized about it and Marx predicted that it would cause capitalism to eventually fail but it hasn't yet.
2007-12-10 01:33:35 · answer #1 · answered by meg 7 · 0⤊ 0⤋
Abstracts have been driving the market forever. People act on their fears and expectations. Do you know anyone who lives in a house built in the 1950s? I bet it has a bomb shelter in it. People's fear of nuclear war contributed significantly to GDP growth in the 1950s. The speculators that are driving up the price of oil in the futures market are just gamblers as far as I'm concerned. There's going to be a lot of broke and very disappointed investors if there's not a major disruption in the supply of crude during the winter.
2007-12-10 04:53:13 · answer #2 · answered by Hubris252 7 · 0⤊ 0⤋