Nasdaq Falls to Two-Year Low

The stock market is open today, but the bond market is closed in honor of Columbus Day. It’s another rough day for stocks. The Nasdaq Composite fell to a two-year low. The index is now down over 32% this year.

As I write this, the S&P 500 is down 0.68% but the S&P 500 Hi Beta Index is down by 2.23%. It’s another day when risky stocks are getting punished.

This Nobel Prize for economics was awarded to three economists including Ben Bernanke.

The Nobel committee said their work in the early 1980s had “significantly improved our understanding of the role of banks in the economy, particularly during financial crises,” and in showing why it is vital to avoid bank collapses. They added this was “invaluable” during the 2008-09 financial crisis and the coronavirus pandemic.

Bernanke’s analysis of the Great Depression in the 1930s showed how and why bank runs were a major reason the crisis was so long and severe. Diamond and Dybvig’s work, meanwhile, looked at the societally important role banks play in smoothing the potential conflict between savers wanting short-term access to their money and the economy needing savings to be put into long-term investments; and how governments can help prevent bank runs by providing deposit insurance and acting as a lender of last resort.

Posted by on October 10th, 2022 at 11:50 am


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