There's several second and nth-order effects that seem crucial to our understanding.
Every seller has a buyer. Who would be buying these liquidated stocks?
What would the estimated new equilibrium be? What would be the effects of this equilibrium compared to the current state? Can we estimate the pros and cons?
Conversely, holding the belief that stock prices are crucial to our betterment, wouldn't that imply that we would be better off if stock prices were higher due to more wealthy people owning stock and fewer non-wealthy people owning stocks? At face value that doesn't sound right, so I must be getting something wrong.
> Conversely, holding the belief that stock prices are crucial to our betterment, wouldn't that imply that we would be better off if stock prices were higher due to more wealthy people owning stock and fewer non-wealthy people owning stocks? At face value that doesn't sound right, so I must be getting something wrong.
The driving factor there isn't who owns it, but how rapidly it's being sold. The exact same situation would occur if the stock was already owned by everyone equally, and they were all forced to sell due to a wealth tax on everyone - the price would crater.
Every seller has a buyer. Who would be buying these liquidated stocks?
What would the estimated new equilibrium be? What would be the effects of this equilibrium compared to the current state? Can we estimate the pros and cons?
Conversely, holding the belief that stock prices are crucial to our betterment, wouldn't that imply that we would be better off if stock prices were higher due to more wealthy people owning stock and fewer non-wealthy people owning stocks? At face value that doesn't sound right, so I must be getting something wrong.