The Financial Roller Coaster
Current tallies of the New York Stock Exchange, the NYSE, have equated its assets to nearly fifteen-trillion dollars, which does not even cancel out our national debt. The NYSE was officially opened in 1792, since then many people have become extremely wealthy while some have even became extremely poor. Our country has benefitted from the stock exchanges too, by creating jobs and influencing the economy in positive and negative ways. The United States economy and the stock market seem to share many relations, such as the repeating economic cycle of thirty years; which demonstrates the upswings and downswings of the NYSE. Over the past three-hundred and twelve years the New York Stock Exchange has contributed greatly to our country, in both positive and negative ways.
Since the birth of the New York Stock Exchange in 1792, many have become extremely wealthy and even more have lost much of their life savings in the markets. The original stock market was first debuted in Belgium in the 1530’s, it was located in Antwerp (Beattie). The idea of the market in the time was for business men to congregate during the day to do business, work on the government issues of the time, and for individuals to take care of their debt (Beattie). Although the NYSE it is one of the most renowned stock exchanges in the world, it was not the first one in the United States, that award goes to the Philadelphia Stock Exchange (Beattie). The PSE was brought about in 1790, and has continued to be on the smaller side of stock exchanges. The economy has fluctuated to the positive and negative over the centuries it has been open, one of the most recent downturns was in 2008.
The month of September started with unsettling news. On Monday, September 15, 2008, Lehman Brothers declared bankruptcy, which was one of the largest investment firms in the world, as soon as the news broke over the floor of the NYSE the Dow Jones Industrial Average dropped nearly 500 points. Rewinding one year the Dow hits it highest point in history, on October 9, 2007, the index was recorded at 14,164.43. As the year would progress the credit bubble would burst, sending the American economy into an uncontrollable downward tail spin. In one day the Dow dropped 778 points, which was almost seven percent, while the S&P 500 index fell nine percent (NYtimes.com). To give a comparison, suppose you own a company that was valued in candy and you have 10,000 pieces of your favorite candy,which took 20 years to accumulate. The Company only started with 100 pieces and each day the company would tell people to give it money to go and buy more because it promised them the “company” would be worth more tomorrow. On the day the company is on track to break a record when the doors open and 780 of the candies are gone without a trace. The companies of the NYSE had the same problem; the market not only lost 780 pieces of candy but also lost 1.2 trillion dollars, in one day...