Is The Stock Market Rigged? Everything You Need To Know For Next Week. This isn’t capitalism when the Fed can print unlimited money and bail out companies. That’s the worst part of capitalism combined with the worst part of socialism. Businesses are benefiting during the good times, borrowing money to buy back stock, paying out dividends, and not saving anything in a rainy-day fund. And during the bad times when these same companies should be going bankrupt or getting bought by more responsible corporations or merged with competitors? They are getting bailed out by the Fed. Capitalism on the way up, socialism on the way down.
A stock market crash is a social phenomenon where external economic events combine with crowd psychology in a positive feedback loop where selling by some market participants drives more market participants to sell. Generally speaking, crashes usually occur under the following conditions: a prolonged period of rising stock prices and excessive economic optimism, a market where Price–earnings ratios exceed long-term averages, and extensive use of margin debt and leverage by market participants. Other aspects such as wars, large-corporation hacks, changes in federal laws and regulations, and natural disasters of highly economically productive areas may also influence a significant decline in the stock market value of a wide range of stocks.
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