Too Much Faith in Financial Markets as Far as the Recent Economic Problems

I feel that over time the US has put too much faith in the financial markets. The stock market seems to be the deciding factor in how a company is doing. Let me explain, companies with higher average stock prices are more profitable with less risk then those who have lower stock prices. I feel that the stock market is really a late tell sign for a struggling economy. The economy was already starting to collapse long before the effects were felt in the falling of the stock markets. The alarms for a falling economy should come from the main contribution to our economy which are the consumers. Also the reason why the stock market is a later tell sign then the consumer is because accountants and higher management try to make the company look as profitable as legally possible to keep the stock price high for the firm. This is done instead of pointing out key industry problems that could hurt stock prices but potentially save the economy. As a future financial manager I plan to keep this in mind so that I can do my part to make sure our country does not go through this economic slump again.