Stock market panic ensued Monday morning (aka #BlackMonday), as Wall Street saw a major 1,000-point plunge, following China's biggest stock collapse in eight years.
Because, let's be honest, the stock market makes little to no sense and no one really has any idea what this kind of plummet really means, we asked Dr. Laura Gonzalez, Assistant Professor of Finance and Business Economics at Fordham University about where the economy stands now, what people should be doing with their money, and just how scared we should all be. At time of publishing, the Dow had fallen 650 points again.
What does a 1,000-point drop this early in a day mean?
"Not much unless it continues for several days."
How often does that happen?
"Following each quick ramp-up. It was coming."
Should anyone be buying or selling anything right now?
"This is a good time to buy, not to sell."
Who is this going to hit the hardest?
"The ones that bought stocks in China at the peak. Their corrections are much greater than here."
What does it mean that the markets are "in correction" right now?
"There was a bubble in China that is getting corrected. Stock prices went up too much."
What should scare us the most about the state of the Chinese economy?
"Chinese authorities have room for maneuver, but must do it quickly, to avoid contagion to other economies. The Chinese economy is suffering from the transition (done in other countries) from manufacturing to more sophisticated production and services. They are also cracking down on political corruption."