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megastar megastar
 
M$1 March 10, 2009 08:21 PM

what happens if and or when the stock market plummets to zero points?

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dumblonde dumblonde
 
 March 10, 2009 08:38 PM
A zero point stock market basically means all economies and markets have ceased to exist, there is no more money and essentially the world has ended.
I actually think it's impossible for the stock market to reach zero points assuming the world has not ended.
Stock market "points" are determined by the shares' sale value.
If the sale value is 0 that means nothing is being bought or sold which basically means the markets are gone.
No matter how bad a crisis gets, markets will always exist and so they would never be zero because there is always something to be traded and a value to be traded at.
I think the only way a particular index may reach zero in the real world is if all listed companies fall under the minimum value to be listed. And if that were to happen then that most likely means the entire economy has been collapsed and devalued. But even then, nothing will be worth zero points, as there will always be exchanges of something and a value will still be assigned to everything.
Who knows, maybe monetary economies will collapse and we'll revert back to the barter system... But waiting for that makes as much sense as being afraid of the Sun dying in 5 billion years.
Source(s):
http://en.wikipedia.org/wiki/Stock_market



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irishsteph... irishsteph...
 
March 10, 2009 09:11 PM
That was hilarious!
Very true, but still, the presentation was awesome!

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thinsurfac... thinsurfac...
 
March 10, 2009 11:02 PM
I'd like to add a small bit to this answer - which, although humorous - very true! You're right, the zero stock market would be the end of the world as we "know it" to be right now. We would not cease to exist, BUT, this would create a chaos in our societies that would require "government assistance" and could even be a "planned" event. That we, as WORLD citizens, would then be forced to become part of a single, worldwide monetary system, otherwise known as "one world order". Barter, yes - would be a solution, but would it be legal under the system?

But - I still greatly enjoyed your humor!!

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dumblonde dumblonde
 
March 11, 2009 04:30 AM
Bartering is indeed legal and taxable. And it's making a comeback!
http://consumerist.com/5162233/bartering-makes-a-comeback

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deanjensen deanjensen
 
March 10, 2009 08:38 PM
The Dow Jones, NASDAQ and other global markets are based on a set of stocks. The Down Jones Industrial Average, what most people consider the Stock Market, consists of a number of stocks combined together to come up with an "average". For that number to reach 0, every company that makes up that number would have to reach a stock value of 0.

For a good overview: http://www.djaverages.com/?view=industrial&page=overview

For more information: http://www.djaverages.com

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thelastsci... thelastsci...
 
March 10, 2009 08:47 PM
It can't happen The New York Stock Exchange established "circuit breakers" following the market crash of October 1987 and the plunge in the stock market in October 1989. (What is it about October and plunging stock prices?) The triggers for the circuit breakers are set at 10%, 20% and 30% of the Dow Jones Industrial average from a level calculated at the beginning of a quarter. Here are the figures for the fourth quarter of 2008.

According to the New York Stock Exchange, in the event of a 3350-point plunge in the Dow (30%) the market would close.

If the Dow dropped by 2200 points (20%), there would be a two hour stop in trading if it happened before 1 PM. (Between 1 and 2 the market would close for an hour and after 2 trading would halt.).

If the Dow falls by 1100 points (10%) before 2 PM trading would stop for an hour. (Between 2 and 2:30 there would be a half-hour stop and after 2:30 the market would stay open.)

Let's hope we don't see the kind of one-day drop in the Dow that would trigger the circuit breakers. If it did drop to fast the market will just stop to prevent a total crash.

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karj karj
 
March 10, 2009 09:06 PM
Actually you have to understand stock market. How can it go to zero points. If it has to reach zero points, all the companies value should be zero.Are there any person willing to sell a company for zero dollars?? The answer will be no. So it can't reach zero points.

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nis161 nis161
 
March 10, 2009 09:25 PM
The very simple answer to that is, if the stock market has a value of zero...it would mean that every single company and monetary organization in the world has nothing left. Money would pretty much be meaningless at that point because it would mean that even money are valueless by then. If that were the case, chances are, we are back to hunting for food.

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oboewan oboewan
 
March 10, 2009 09:46 PM
Well, the "points" in the stock market is the price at which stocks are trading. Since stocks, being portions of companies, are obviously worth something, and a stock trading at 0 is worthless, that basically means that all companies have failed and the economy is nonexistent. (Either that or we've converted to Communism.)

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nis161 nis161
 
March 10, 2009 10:31 PM
That'd mean we'd be in true communism, something no one ever managed. In a sense, it might be good.

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davepamn davepamn
 
March 10, 2009 09:49 PM
Price is a function of supply and demand. If demand is zero then price is zero. If supply is zero mean no companies than price is zero. Price is the perfect fit between supply and demand.
Source(s):
A Return to Depression Economics


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xds xds
 
March 11, 2009 12:04 AM
The world as we know it will

end.

But this will never happen as major world currencies would be so diluted that their would almost certainly become a new currency and sooner or later a new "world market" would emerge.

It's the chicken and the egg type scenario.

You would also have people fighting in the streets and people that have their retirement and IRA's in the stock market would have to either return to work or face absolute peril.

Basically the worst parts of the bible.
Source(s):
My Brain.


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lgt lgt
 
March 12, 2009 10:09 PM
The dutch race will coward and ask for a government bailout
Source(s):
sarcarzim


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