Madison College economics instructor Mary Schranz reacted Friday to the single worst day since the 2008 financial crisis. The stock market plunged more than 500 points on fears of a global economic slowdown. “My initial impression was that it was an aberration,” said Schranz. “It seemed like an unusually large reaction to news that isn’t always so good, but that didn’t merit the size of the drop that was observed yesterday.”
Schranz said difficulties with financing for Europe caused some investors to convert into cash, and began selling off all sorts of assets, including stocks in the U.S. Schranz says the economy here is not really reflecting what happened on Wall Street on Thursday. “The U.S. economy is in a soft patch, but it’s not this dire disaster that appears to have taken hold of the stock market yesterday.” Schranz notes the jobs report released Friday shows hiring in July increased by 117,000. She also pointed out that General Motors announced bigger profits than expected, and retail sales were also up in July.