Hacker News Reader

Comment by chasingsparks | Hacker News Reader

This is a genuine panic -- probably the start of pretty dramatic decline. Sovereign debt is going to be the new contagion. If the contagion spreads, the gains to consumption over the past year could be demolished. These gains were bought at the price of government stimulus -- i.e. soverign debt. Businesses are not yet stable enough to weather another downturn soundly; governments are already grossly over-extended.

Oh, happy days.

View on HN

"We should be down big today, but not 1,000 points. This is an equity market structure issue, there's no major problem going on."

http://news.bbc.co.uk/2/hi/business/10101581.stm

Doesn't sound like a panic to me.

Yea, it's appearing more and more like a glitch, human, structural, or otherwise.

However, the sellers were real -- and increasing. I think there is a danger that people will see it as only a glitch and not the beginnings of trouble. The glitch might mask the true sentiment.

Why would you want a panic? The market is built on confidence, we want the market to have confidence...

But not necessarily false confidence.

To some degree, I agree with you. The stimulus was a bluff that was meant to inflate confidence and bring back spending. The market is a strong signal that, if in panic mode, may arrest gains to consumer confidence. I don't want a panic because it may lead to recession/depression round 2. However, I also believe that, if round 2 is inevitable. I'd rather fall from a lower height.

Reply on news.ycombinator.com