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Dow, dow, dow, down, doo-be-doo-wah

So, the stock market is crashing as I am writing this. The Dow is down 553 points at the moment, a loss of 3.46%; the Nazdaq and S&P indices are down about the same, percentagewise. Big stock-market swings like this sometimes make me face how difficult I find it, conceptually, to understand just how big and how rich my country really is.

On one level, a loss of three-and-a-half percent seems like not very much. If the library that employs me were to lose 3.5% of its shelf space, it wouldn’t involve changing the workflow at all; if my salary were to be cut by 3.5% it would be bad but wouldn’t bankrupt me. A 3.5% cut in a current nest egg for retirement would mean a loss of, um, something larger than 3.5% in a projected retirement fund in twenty years? The on-line calculators seem to show that a reduction of 3.5% in current savings (with no other changes) results in something like a 2% projected reduction in value in 20 years, which seems very wrong to me, mathematically. At any rate, it’s not enough of a change to make the difference between being retiring at 67 or 70.

On the other hand, there are billions of dollars, as I understand it, invested in just the Dow Jones Market Index funds. Forget for a moment the money invested directly in shares of actual companies that actually exist, just take, f’r’ex, the SPDR Dow Jones Industrial Average ETF Trust, which has a market capitalization of $11,000,000,000, and which presumably has lost three hundred and eighty-five million dollars today. That’s, let’s see, something like half-again the entire yearly budget for my town. That’s just the one index fund; there are others, and again, not really counting actual losses to actual companies. Well, sort of counting them, partially, but not really. At any rate, however a person would estimate the quantity, that’s a shit-ton of money lost.

On the other other hand, the money that’s lost isn’t actually money, and isn’t actually lost: it’s a marking system that magnifies momentary changes, and when those changes change again, the money magically reappears. And, of course, the marking system that is sort-of money, by its nature has to decrease in value as it is converted so anything closer to what we think of as money, and the closer it gets to being money, the less it’s worth. So, I dunno. Did the US lose a shit-ton of money today? Are we, as a nation, worth billions of dollars less than we were yesterday?

On the other other other hand, I am aware that stock market crashes sometimes lead to long-lasting economic catastrophe. Sometimes they don’t! But sometimes they do. And there are actual people whose entire assets are invested in some of those actual companies, who will be penniless after a crash. And even after the market recovers (as it always has recovered, so far) there could be companies shuttered, people ruined, the labors of lifetimes wiped out in a day. How many people, do you think, would be really seriously hurt by a market crash of 3.5%? I’m not talking about having to put off trading in the 2015 Lexus for the 2016 one, I’m talking about lost-my-job-and-can’t-pay-the-mortgage hurt, kind of thing. Maybe, oh, one-hundredth of three-and-a-half percent of the country? That would be, what, a hundred thousand people? That’s a shit-ton of people hurt by a day’s trading.

On the other other other other hand, in the hours since I started righting this, the Dow gained 315 points! That’s a gain of two percent! Think of all the wealth created, just today!

Tolerabimus quod tolerare debemus,