Incessant government intervention is one of the major contributing factors to the stock market problems unfortunately. The constant stream of “QE” around the world, the chinese government a couple of weeks ago relaxed rules to flood more money in to the market to prop up prices (a mistake they’re about to repeat wth everyones pension money).
I don’t know where this notion that governments have an obligation to control the markets came from (Indeed I’ve been researching the history of this) but the reality is that because they’ve got their noses in to so many different pies, where they have no place being, the markets are so far out of whack that no one really knows what a proper market would look like.
What we’re seeing being played out now is the inevitable correction, which, if it were to run its natural course, would result in a market that is utterly shredded, almost destroyed and in a much better place to find it’s equilibrium Stocks, commodities, currencies, it’s all borked.
Unfortunately there’ll be “unilateral” action by major world governments again, more interventionism and then temporary stability, giving people the illusion that things are back to normal…at which point stocks etc will fly again as people try and ignore reality.
Until governments back out of where they don’t belong, this ride will keep occurring and people will keep getting burned.
Of course, in a natural market situation, people will get burned anyway, as the economic cycle moves from one point to another, but it wouldn’t be anything like this in scale, it’d just be the few unfortunate saps that put their money in the wrong place at the wrong moment. Right now, that’s every body.