Who am I now?

Wow. From the beginning of this blog I really had no idea what the stock market really was and how it is a vital part to the complex global economic system. Honestly, I thought the stock market was a room filled with sweating suited brokers who screamed at billboards posted with constant changing numbers and wild graphs, and all they did was yell buy or sell. But my growth as a thinker on this issue has grown exponentially, especially since the dawn of economic peril in October 2008.

For those who were like me, let me clarify a little of what I have inferred about the basic function of the stock market and its tie with the economy. Stock is basically a part of the company. When you buy stock you buy part of the company and the price determines how well the company is doing. Each company is made up a shares, Microsoft has about 112 million shares. So, for example, if you buy 200 shares of Microsoft at $20 a share and the next day the price of each share has dropped to $18, not only did you lose $400, but the company may have had something going on whether it be a strike, poor advertisement, court cases, or any other factors. The price represents the worth and success of the company. So, again for example, if comparatively the price of Apple stock is $100 a share, then Apple is having higher success in the company through better sales of their products.

All these companies of products are under an umbrella of markets, aka stock markets. The most popular and focused American markets consist of the NASDAQ (national and capital markets), the New York Stock Exchange (NYSE), and the AMEX. Who buys the products of these companies? Consumers. It is a consumer driven market. Each market reflects an overall percentage gain or drop aggregated from each company's individual success within the market. If all the markets are being affected with a simultaneous plummet of percent, or points, then the underlying problems are sourced to the consumer. Anything that devastatingly affects the consumer is reflected in the stock market which then is reflected in the economy as large companies make up most of the economy. So since the mortgage crisis caused so many people to lose their homes and banks to be hollowed out, the consumer is driven into panic and halts buying of products; thus driving down the stock market and the economy.

So there you have it in a nutshell. Now the federal government is stepping in just like in past crashes and the Great Depression. The government issued a $700 billion bailout which has proved to be ineffective for short term success. What America needs is a long term solution; a solution to the source of the problem, the mortgage crisis.

It's all in the mortgage crisis. This problem which has spanned from a decade of debt, speculation, and deregulation is showing right now in this market. Target this problem. These quick injections of money into the economy are only serving as hopes for a quick fix, but as Meritt argues, "We are a society of quick fixes. With a bleach pen, a travel sewing kit, anti-itch relief cream we don’t have to worry about anything. With the economy, a system that entails all of our families’ and friends’ financial successes in life, a quick fix is nowhere near possible."

Before this blog research project I had no idea about the complexity of the economic market or any response to the stock market's volatility. My dad discussed with me the global market before this project. I would nod my head pretending to understand but I had no clue what was going on. He teaches in the college of business. I never had anything to talk to him about his work. He was too brilliant for me on that subject. But now I can have casual arguments over the primary cause of the stock market and propose passionate theories to fixing the economic chaos.

Now I am passionate to argue about the economy. I feel like I am spreading my education to the world not just through my blog, but through my thoughts. I will update friends on the current status of the stock market. "Hey did you see that the Dow dropped 782 points on October 6th?" "No I didn't" "Stay updated. This is our future!" I could argue with analysts or even presidential candidates about fixing the stock market and economy.

The world is now opened to me. I am now aware that I should be aware. I make sure I am aware of all the issues that will affect my future: college loans, the economic crisis, the presidential election, taxes, social security, oil, and alternative energy.