Let’s recap your arguments.

First, you set out a list that you take as logic or evidence that falling stock prices affect most people. I point out that providing a list is not the same as logic and/or evidence.

You provide a S&P article that says falling stock prices “may” be a factor, but does not say “determining” or “primary” factor in granting credit.

Next, you admit you don’t have any empirical evidence or “specific instances” where what you assert happens, actually happens. Then, finally, you fall back on personal experience and in doing so are committing the “hasty generalization” logical reasoning fallacy. You offer this as the logic and evidence I asked for in the first place.

And yet, you still cling to your position without logic or evidence! Wow! I really don’t need to add anything to that, except to recommend a great critical thinking book!

My point was, it was so long ago, that falling stock prices have little or no effect on most people. Should have I added, little or no “direct” effect on most people?

According to the Federal Reserve Board Survey of Consumer Finance of 2004, 20.7% of US households directly own stock. This means, of course, that 79.3% of US households directly own stock! Taking account of indirect stock ownership, either a little under or over 50% of US households are affected. Therefore, based on this evidence, I stick by my original comment.

One might think by the amount of attention given by the corporate media to the stock market, that the latter determines the health of the economy. It is the opposite. The health of the economy and especially current and expected profitability determine, in the last instance, stock market behavior.

I am much more concerned with the general well being of most people in capitalist society, not wealthy stock owners. Therefore, I look to the unemployment rate, real wages, real median wages, the poverty rate and absolute poverty numbers, health insurance coverage, hunger and homelessness as indicators of the health of the economy. Because, what is the capitalist economy without the working class, without the people who actually do the work?

what happens to the stock market has little or no effect on most people

You are inking stock ownership to the set of people that are hurt, 1:1. Simple, beautiful. It’s just completely not true.

Why would S&P put out a document that starts out with the sentence I quoted? To say, yes THAT IS one of the things we use. If you suddenly tank hard, the bank is going to double, triple, quadruple look at you before giving you money. Why is that so hard to understand?

I don’t actually know any specific instances where this has happened. I just know from working in the business world what happens when stock goes down. Budgets are cut. Projects canceled. I have worked for 3 publicly owned companies.

Even if the price is just a lost opportunity – a job that you can’t have now that would have been possible with a bigger budget – that is the cost. Decline. Pain.

But whatever, keep believing the tanking stock market isn’t hurting you.

Do you see what you did? You substituted the word “may” in the original for “does”. This is very clear to me.

I don’t recognize my positions when you restate them. If I want to say that “companies are insulated” then I’ll say that.

You want to show how financial institutions are using their losses to restrict credit to support your position. Exactly which financial institutions and to whom are they restricting credit? Because if they are, then it is the Fed’s job to step in and increase its lending provide liquidity to the system.

“The price of a company’s stock is one of the many factors that Standard & Poor’s Ratings Services may consider”

You seem to suggest that these companies on the exchanges are insulated, isolated. That what happens to their stocks only affects a few guys at the top of one company.

That is just not right. Events are interconnected. Note that I’m not saying in this case that the stock falling is causing the credit crunch – the causes of that are clear I think (default credit swaps, backed by bad mortgages, and all financial institutions seem to be holding loads of them). I’m saying that it *affects* the bottom line of the business with the stock, as well as hurting the businesses that work with it. Trickle-down pain if you will. Can you really deny that?

It appears from the S&P article that if a company is credit worthy, then it will receive finance regardless of the current direction of its stock price. Is this how you understand the quote?

The point is, of course, that falling stock prices are not directly connected to a “credit crunch.” If they are, what is the relationship?

http://www2.standardandpoors.com/portal/site/sp/en/us/page.article/3,1,1,0,1204839903965.html

With the bailout, we have essentially agreed to buy the bad packages which gaining nothing.

If the repubs really want government to work like a business, they need to look more at the stock injection plan. If a business raider were to come in, they would buy stock in the failing business and thus own part of the business. Money to the business = part ownership.

But I can hear cries of “nationalization”, “communism”, “Govt infringing on private enterprise”

What evidence do you have that falling stock prices cause banks to stop lending to businesses? What is the exact criteria you assert banks are using for loan approval? And how, exactly how do you know this?

Writing a list is not the same as providing logic or evidence for your conclusions.

1) Stock price falls.
2) Business can no longer get loans.
3) Business stops or slows spending on everything but basics. Advertising stops, hiring stops.
4) Because of the lost buisness, the advertising, hiring, accounting firms, of the original business – their own stock price falls…
… repeat ad nauseum…

It’s a spiral death trip.

If you still think that’s a function of ‘llama sensibilities” then there’s not much else to say. Congrats on all the “recommends” though. You should be proud.

And even well-valued, stable, Fortune 500 companies are being denied commercial paper, which affects their ability to build new factories, launch new products, or even manage basic cash-flow.

Exactly what does this have to do with the stock market or it falling? I don’t put the burden on you alone, but how is this a refutation or response to my conclusion?

I repeat my earlier fact that, according to economists Dornbush and Fischer, the overwhelming majority of new investment in plant and equipment is financed by retained earnings, not stock issues.

AIO, that was in really poor taste.

Ralph:
Sorry to offend your llama sensibilities.
I did say ‘If for no other reason’…
I guess the Empire State Building is still there, maybe I should have used that.
In the mean time, you can explain the ‘really poor taste’ thingy to the people who recommended the comment.

¶ AIO