Stock Market Fell Today – Here’s Why (Maybe)

Read this Bloomberg column (opinion, but pretty good information in here) about the financial statements of Groupon.

Essentially, here’s what it says in Plain English: Groupon is using bogus financial calculations to make its numbers — which might actually be pretty bad — look good.

Is this why the stock market fell 600 points today?

Answer A: No. Groupon has nothing to do with it. It’s all about a tiny little derating of the U.S. government’s financial prospects by ONE of three rating agencies.

Problem with Answer A — AA-plus bonds, as rated by Standard & Poor’s, are pretty damn good investments.

Answer B: A lot of the Wall Street dance is based on FICTION. On Friday night, S&P provided everyone with a look beneath the surface story. Lots of savvy people who know this SOLD today. Why? Well, if this kind of thing continues……people will see how there is a lot of stuff (like Groupon, maybe) that is totally BS.

That would be bad for stock valuations, as lots of them are based on puffed-up thin air.

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