In Canada, markets that had been skidding for several days fell off a cliff, with the S&P/TSX composite index tumbling 605 points or 4.75 per cent. In the past week, the index has shrunk by more than 1,500 points, or 11.4 per cent. Energy and mining stocks, buoyed in recent months by high commodity prices, fell the furthest Monday.
Having been a student my whole life, I've never really been personally affected by downturns in the economy. The job market has always been more of an abstraction. A lack of jobs isn't much of a concern to someone who is looking at 3 more years of school, or whatever. But now, I'm set to enter the job market when it looks like the economy might tank. When considering this possibility before, I kind of thought that lawyers might be fairly insulated from recessions. Like, when the economy is good, the corporate group is active, and when it's bad, the insolvency group. But I'm not so sure anymore. I feel like, to some degree, associate recruitment will slow down at a time when I'm vying for an associate position. So then I think maybe the utilities sector would stay strong - people still use electricity no matter what, right? But notice that it's energy and mining stocks down too. Two large sectors of B.C.'s economy.
So yeah. I'm not too worried or anything... just wanted to give a view of what the economy looks like from my perspective.
3 comments:
There's one thing about the economic developments of this week that I don't understand. I'm hoping somebody can explain it to me, but I think that other people are just as baffled because I keep reading the same sentiments in articles and blogs.
Isn't it a disastrous move for the Fed to cut interest rates as an IMMEDIATE reaction to the market downturn, as they did right before markets opened on Tuesday? I thought the whole point of the Fed was to oversee the economy for better or for worse, without becoming "a player" in it. If their role now is to come to the rescue at the last minute every time it looks like the shit is going to hit the fan, this behavior will just become expected and will be "written in" to future investment decisions and stock prices in general. And then help from the Fed will be irrelevant. Am I missing something here?
I don't know enough about economics to say for sure.... so here is a link to a blog post that is kind of on topic.
reality is, wall street/bay street etc. never learn and greed rules the day. now this is coming from someone who loves capitalism and the markets and trades actively.
what cracks me up about all this market drama is the fact that bankers/traders earn well into six figures, have some pretty sick degrees (financial engineering for example) from the most "prestigious" universities in the world yet at no point did anyone seem to stop and say...
"is approving a $500,000 mortgage to someone who didn't complete high school, earns 20K a year a good idea????" (subprime U.S. mortgages)
it bogles the mind...but short term gains is always coveted before considerations for the long term
and THAT is way so many people lose money investing.
Post a Comment