Feedback from a reader:
According to what I learned in school: aren’t assets priced based on market forces? Supply and demand? What I don’t understand is, when I read news articles, the market is supposedly experiencing a correction now. What correction? Aren’t those assets prices based on people’s demand for then? Whatever the price is at any particular moment that is the price that people are willing to pay. How do we determine at any point they are not ‘overpriced’ and how can anyone do that when prices are constantly changing?
Barry Ritholtz assembled some of the better “whys” to explain the correction:
4 of his top 10 myths of the Great Correction of 2007:
1. Chinese regulators caused the meltdown.
2. It was Greenspan’s fault.
3. Blame China’s market crash.
4. A Dow Jones Glitch caused the plunge.
More good ones?