Re:Trading halted as U.S. stocks plummet
by kortilla on Monday March 09, 2020 @02:48PM
(#22528409)
Because bulls and bears aren’t equal. The laws should be favored towards not destroying the economy needlessly.
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Because extremely bull markets are a strong indicator of a bubble the laws should be equal to prevent bubble bubble bubbling.
Are they? The market reaches all time highs almost every year, so would you say that we spend most of our time in bubbles?
It is actually expected that the market will typically go up, not down. Otherwise there would be no difference between investing and gambling.
It's a question of velocity - markets go up and down all the time... but speed breaks to prevent the market from going down to fast also need to prevent the reverse case - some sudden inexplicable and extreme price spiking.
Basically - we should protect against any really dramatic sudden changes as chances are that something is wrong.
In the last year the S&P grew ~22% prior to this recent drop, that's fine... and on a day swings in the low single digits might be fine. But if we woke up tomorrow and the S&P had recovered the pre-drop value and then grown 20% over that price - something weird is clearly going on and we should be worried.