We should be ready to buy when markets crash.

In 2008, after the fall of Lehman Brothers there was "a heated debate about how the leading American banks had grown 'too big to fail'. But it overlooked the larger story, about how global markets had grown too big to fail," wrote R Sharma. In 2008, "the markets for stocks, bonds and other financial assets had tripled over the previous three decades to 347% of the world economic output". "Today the markets are even larger, 360% of global GDP, a record high." Why? Because, "Over the past decade, the world's central banks  -- in the United States, Europe, China and Japan -- have expanded their balance sheets from less than $5 trillion to more than $17 trillion..." Financial authorities are "trained to focus more on how markets respond to economic risk than on the risks markets pose to the economy" so they seem to be oblivious of "the $290 trillion now sloshing around global markets". Markets in India also reached record highs last month and continued to climb, claiming a new record almost everyday. This despite a fall in the value of the rupee which is making imports more expensive and adding to the rising price of oil, which has risen from around $30 per barrel in 2016 to $73 per barrel today. Experts expect the rupee to remain volatile under pressure, with Indians scared to predict how low it will fall, but one foreigner said that fair value is around 73 to the dollar while another predicted that the rupee could fall to 80 if it breaches 72 to the dollar. The stock market fell by over 1100 points a couple of days back but clawed back over 900 points in the afternoon to close only 280 points down. "American companies will dole out nearly $1 trillion in cash to buy back their shares in 2018, the highest ever. It is suspected that the share buyback is part of the reason for the buoyancy of the share market," wrote A Ranade. What is the problem with that? It accentuates inequality. "In the US, more than 80% of shares are owned by 10% of the population. In India, this ratio is much more skewed." It rewards shareholders but not employees because companies have less cash in hand and it shows that the emphasis is on short term profits, rather than spending on long term growth. The Federal Reserve's stress test for the largest bank is "comically absurd" said former Treasury Secretary Lawrence Summers. "The nation's largest bank holding companies are strongly capitalized and would be able to lend to households and businesses during a severe global recession," The Fed said in June. "That, I would suggest, is a comically absurd conclusion that is belied by the most elementary analysis of the beta of those major financial institutions," said Summers. Economics is based on studying events after they happen and building models so economists do not make money from markets because they do not really understand them, wrote V Praveen. If markets crash it will be the best time to buy stocks. But, only the rich will be able to afford it.