Stock market crash .....

marge · Member

Hi

Can anyone tell, hypothetically, what it would mean if the stock market fell to 0 pts?

Thanks

Marge

TABtrader · Member

It would mean that the entire list of businesses in that stock market suddenly had a percieved net value of "0" and moreso that their future value will not improve and also be zero. It will also mean that such stock ownership would suddenly become worthless.

Now for companies to have a "0" net worth, they would have to have no revenue, no assets, or in the least liabilities that equal assets with 0 capital. Frankly I find that possibility almost impossible. A company may be devalued, but it will still retain some marginal or salvage value on their hard assets.

A stock that exists only on paper might achieve that, but the SEC doesn't allow the existence of such public companies. Before a company can go public it is audited and its assets are reviewed.

poly · Member

I would also imagine massive layoffs by corporations as well as many companies declaring Chapter 11.

TABtrader · Member

Layoffs and what not would have to occur long before the stock market hit zero.

The scenario is about as realistic as our star becoming a super nova in the next million years.

Chad · Member

What if someone hacked into all the systems and reset the debt to zero?

ie- the movies Sneakers (the ultimate code breaker blackbox is developed), and Fight Club (where they blow up the major credit card companies, erasing all the debt).

As an engineer myself, I would have to assume the major corporations, credit agencies, and stock markets all back up their data to multiple remote locations.

TABtrader · Member

That is correct, though theoretically you could use a tape worm that would work its way through all the backups overtime and strike simultaneously.

It doesn't matter though. Everything is not electronic and paper trails are still paper. Even if the stock market were hit, the value of the companies and their audits are all paper driven. So the market would "crash" though not as a stock market crash, and then be rebooted. If for some reason the information was all lost, the paper trails and valuations on that paper would still exist.

Its one reason I found the premise to "Golden eye" with James Bond so questionable when I first saw it.

That and data transfer is fairly world wide not and not localized.

It can all still be rebuilt even if the paperwork didn't exist (which it does).

In a sense I am reminded of the new Battlestar Galactica series in which the older system was more paper driven and survived a horrid collapse.

Chad · Member

I wouldn't say everything has a paper trail. Seems i'm constantly bombarded with requests from my banks and employers to "go paperless".