In some cases, building something that nobody will use is still a loss. It still cost money to build a building, and if the one paying for that building doesn't recoup the cost the it's a lost.
Beyond that, of course you're right. It's unrealized gains, not a loss.
I like this. It's insightful, and stated in a plain way.
And equally we can say, once we start regarding good news as a gain, very bad stuff happens.
The idea of "confidence" rather than measurable, tangible facts as an economic basis has been the road to many bad things. In some ways confidence and pessimism can be seen as the ability to ignore reality. We've been inventing ways to delude ourselves in western economies for decades. For example, film and record companies counting copyright infringement as if it were an actual loss, or Twitter over-counting its users as a kind of corporate egotism.
What might really help our societies on multiple levels is a return to fact-based economics, instead of what is essentially information warfare directed at pulling off ever more audacious confidence tricks.
Confidence is useful. It reduces volatility in the market.
As I am sure you know, a "confidence trick" is a way to defraud another by influencing their (psychological) confidence (or pessimism) against their better judgement and in spite of the objective facts.
It's fundamentally different, practically the opposite.
Paper losses are like a farmer realizing that the grain in his silo is bad. Knowing this when you were oblivious before is a good thing, whereas the grain going bad is obviously not.
Once you start regarding bad news as a loss, very bad stuff happens. In some contexts, we'd all agree. "Shooting the messenger" is an age-old cliche for counterproductive use of power, right?
Just saying that $X billion dollars were "lost" by market price fluctuation is dangerous, because it suggests it can be weighed numerically against real things and real peoples' lives lost.
If you were a CEO or a politician or someone powerful, would you justify destroying one warehouse or home or hurting one person, in order to avoid, say, a trillion dollar "loss" of paper value in some assets?
I mean, don't you think people do this, directly or indirectly, and it's wrong?
Stock market declines are called "corrections" for a reason.
>The money spent on that commercial real estate is gone. Those big fancy buildings will have been wasted resources and effort.
Maybe, but nobody can say for certain what the world will look like in 5, 10, 20, 50 years anyhow.