Single paragraph explanation of the financial crisis by Prof Mark Blyth

[MohRokTah]

38. The markets go up. The markets go down.

Over time, the markets continue to increase as economies grow.

Last week, the markets dropped due to losses in the Chinese markets. When one market suffers large losses, such as happened in China, all markets suffer some losses due to interaction between regional markets.

In most cases, these corrections result in pricing in all of the markets which are lower than capitation in most stocks would indicate, resulting in bargain pricing that should be capitalized on through purchases of the stock since the next step will be some slow to moderate increases.

All market corrections, including the massive downfall in 2008 can be capilized upon to insure greater than normal returns on investment.

That, in a nutshell, is the most basic explanation of how markets work that is possible.