What impact does the stock market have on the lives of non-investors?

[ColbertWatcher]

Not just after a crash, or a 500-point drop, but in everyday terms, what impact does the stock market have on the lives of non-investors?

And, if you could, please explain in reply.

[Naturyl]

1. Very little, unless there's a huge crash.

I've never given a whit what the Dow is doing.

[Warpy]

2. It's psychology for most folks

because they look at the paper value of that 401-K taking a dive and think they're poorer. They stop spending on anything but absolute necessities. That starts demand for goods and services to dry up. That means other people lose jobs.

So yes, it affects all of us very much.

[Naturyl]

3. All of us?

Didn't I just say it doesn't affect me much at all?

Do I exist? Sometimes I wonder. I don't have a 401k or even a job. Probably I don't exist.

I know you meant nothing personal, but I feel this had to be said.

[Warpy]

9. You'll notice when stores you used to go to aren't there any more

and when the supermarket limits their stock to things that sell out quickly.

Yes, it'll affect even folks who aren't in the stock market and are not working.

(I'm already seeing both of the above)

[Naturyl]

11. If it gets that bad, then yes.

But it never has, in my lifetime. Where's the evidence it's about to? I'm not convinced these recent hiccups spell DOOM.

[pitohui]

13. well if you're rich enough that you don't need a job or a retirement plan good 4 u but...

are you sure you're in the right discussion forum?

[InkAddict]

15. It's also been working backwards for some...

No job, bare-bones spending, no job for longer time - no mortgage/rent payments; lender has defaults on bad loans and previously good ones; they've sent so many jobs away for so long that they had to write the funny loans; no they can't even borrow from each other; so no one but the rich with windfall profits (individuals/corporations) get loans but they live and bet different, mostly on others saved up funds set aside from working those one-time JOBs along the Yellow Brick Road.

[Fresh_Start]

4. jobs are probably the largest impact

Some people directly because a company doing poorly will cut payroll to cut expenses
Or a business failure leading to a defunct company or industry consolidation will cut payroll

Someone feels 'rich' from their paper gains, they are more likely to treat themselves which creates jobs.

[rucky]

5. Long-Term effect.

when we all have to pay for the bailouts.

[TexasObserver]

6. Well said. In a time of shrinking jobs and shrinking 401Ks, it means a lot.

The person who thought they might retire in two years suddenly has to hang on for four more years, in a job market that doesn't smile on them as they age.

[whosinpower]

7. loss of confidence

People tend to spend less with a loss of confidence - and that equates to less money flowing through the system, and less jobs = recession/depression.

But, there is more that is more worrying - loss of confidence worldwide in the US economy = lower value of dollar = inflation. So, you may end up getting a double whammy - less jobs and more costly EVERYTHING.

Thus far - the Fed's, and foreign interests have been gaming to keep it all afloat - but there will come a time to pay the piper, so to speak, and America is bankrupt - with TRILLIONS of dollars of debt. You'd think it would be easy - just print more money - and that is what they have been doing, but a catastrophic loss of confidence would derail world markets and plunge the planet into a depression - and that is the ONLY thing that is keeping it afloat. How much longer until they say - cut your losses and move on. How much longer until the paper the greenback is printed on is its only worth? And that affects every single one of us.

Just do a little read on the Great Depression - how many folks did that affect who had no investments whatsoever.

[dixiegrrrrl]

8. Affects all of us, quite a bit, because

when it crashes, the money supply is screwn.
If you pay any kind of taxes, and we all do, those taxes go to bail out the screw ups of the market, as witness right this minutes OUR money has been stolen to pay for bailouts.
Even if we have no retirement or other funds IN the market, the market affects the cost of gas, cost of food, etc.

btw...this is NOT a time to keep retirement accounts in the market.

[NashVegas]

10. I Could Be Directly Affected

As I work for a non-profit that's basically kept afloat by an old-money investor.

[pitohui]

12. people can't retire so jobs and promotions don't come open

you might not connect your lack of opportunities w. the stock market crash but i know several people who were planning to retire when 911/enron happened and they are all STILL WORKING

that's several good jobs that have not opened up in 7 years for a younger person -- and that's just people i know personally

multiply it by a few million and it explains why younger people can't get a decent job and why middle aged people can't get a promotion

[DemoRabbit]

14. Translating it into the real world...

Faster inflation will cause food prices and gas to go up (though since they didn't lower the interest rate today, that might be good on the inflation front, for now at least).

Lots of people, a big chunk, losing jobs all at once, which means less people spending money, which means more companies suffering and potentially going under or having cutbacks.

Credit/Loans will be harder to get.


You don't think it effects you, but let me tell you how it has effected me.

The company I work for, a big company, RELIES on the credit industry. The product we sell in just about a credit-only purchase... almost no one buys it with cash. Because it's now harder for people to get credit, we are selling less product. It's also a luxury, not a neccessity, so less people are buying even if they can get credit. I've watched at least five waves of layoffs in the last year. We are down to skeleton crews. And the people getting laid off are having a hard time finding jobs. The remaining salaried staff (as opposed to hourly) is now on a mandatory 50-hour work week, and if we DON'T do it, if we only work 40 hours, we have to take a 20% salary cut. Every employee is pissed about it, but there's nothing better out there. We're all spending less money... going out to eat less, shopping less, cutting back on luxuries... and all THOSE companies we'd normally be spending money with are suffering because it seems a LOT of people are in the same position at the companies they work for. Even our local diner is suffering.

Even FOOD SHOPPING has gotten out of control with prices. I've never in my life cut coupons, and I'm starting to now.

I'm what you'd call a white-collar worker... I make a good salary, as does my husband. My husband is a VP where he works. I have "Director" in my title. We make good money and don't have a lot of debts... but we are STILL struggling. With all I've said above, I STILL feel lucky... I can't imagine what others are going through.

THAT'S what it means to us.

[GoneOffShore]

16. Huge impact - whether they know it or not.

Basically, since we're no longer in an agrarian barter economy, the things that happen in the financial markets effect us all. Perhaps not in the short term, but always in the long term.

[Marrah_G]

17. Massive impact if the market crashes

[nadinbrzezinski]

18. 1929 great deal kind of a way

[happydreams]

19. Very little. Remember the 1987 stock market crash?

It did not affect me one iota. Economic activity remained high.
I think this is the same thing.




http://en.wikipedia.org/wiki/Black_Monday_(1987)


In 1929 it seems that industry slowdown is what caused the spiraling effect. The stock market is not as relevant to the overall economy now as it was then.

Just some thoughts.