227
submitted 3 months ago by Gsus4@mander.xyz to c/world@lemmy.world
you are viewing a single comment's thread
view the rest of the comments
[-] breckenedge@lemmy.world 27 points 3 months ago

Do we know where the sales mostly came from?

Random speculation: Could be banks needing to pull out of the market due to the Fed signaling September rate cuts due to the higher-than-expected unemployment report. This will cause a drop in yield for savings, which would cause people to reduce what they have in those accounts.

[-] jj4211@lemmy.world 12 points 3 months ago

Well, they announced a rate hike in Japan, so that would seem to be a more immediate cause.

In fact, there's some analysis that suggests that Japan's rate hike contributes to the dip in the other markets. Evidently it was a thing for people to borrow yen, use that to get other currencies, and then buy stock and sell the stock to repay the loans. Since the yen has climbed 14% versus the USD in the past few days, those loans suddenly became awfully expensive.

[-] Saik0Shinigami@lemmy.saik0.com 11 points 3 months ago

Random speculation: Could be banks needing to pull out of the market due to the Fed

...

Japan stocks

I mean... it could be. But most foreign stock markets aren't directly tethered to the Fed.

[-] skyspydude1@lemmy.world 0 points 3 months ago

Directly? No. Heavily? Absolutely.

[-] werefreeatlast@lemmy.world 3 points 3 months ago

Probably a Pentium based TI 85 calculator program thing.

[-] Aceticon@lemmy.world 2 points 3 months ago* (last edited 3 months ago)

Most of the money banks "have" they created it themselves (it's called Fractional Reserve Lending and there's a wonderful paper on it by somebody at the Bank Of England called "Money creation in the Modern Economy").

The whole "banks lend out depositors' money" thing hasn't been true since the 80s.

Also nowadays most of the money in leveraged investments comes from the Money Markets (so rich people and pension funds) rather than banks.

That said, your point still stands since a reduction of deposits might impact banks' reserves (basically central banks force them to have the equivalent of about 3-5% of their loans as reserves), it would force a wider retrenchment of their loans, but by itself the impact of that on the entire leveraged investment universe should be limited because they're not the main players in the Money Markets.

this post was submitted on 05 Aug 2024
227 points (97.1% liked)

World News

39019 readers
722 users here now

A community for discussing events around the World

Rules:

Similarly, if you see posts along these lines, do not engage. Report them, block them, and live a happier life than they do. We see too many slapfights that boil down to "Mom! He's bugging me!" and "I'm not touching you!" Going forward, slapfights will result in removed comments and temp bans to cool off.

We ask that the users report any comment or post that violate the rules, to use critical thinking when reading, posting or commenting. Users that post off-topic spam, advocate violence, have multiple comments or posts removed, weaponize reports or violate the code of conduct will be banned.

All posts and comments will be reviewed on a case-by-case basis. This means that some content that violates the rules may be allowed, while other content that does not violate the rules may be removed. The moderators retain the right to remove any content and ban users.


Lemmy World Partners

News !news@lemmy.world

Politics !politics@lemmy.world

World Politics !globalpolitics@lemmy.world


Recommendations

For Firefox users, there is media bias / propaganda / fact check plugin.

https://addons.mozilla.org/en-US/firefox/addon/media-bias-fact-check/

founded 1 year ago
MODERATORS