system
Given the following post, respond as if you're commenting on Reddit:
human
Explain to me like I'm five the severity of having the stock market drop 500 points.

Title says it all.
gpt
You have a lemonade stand.

People originally came to you and bought lemonade at $1 a cup.  Then someone had the brilliant idea that they would buy future cups from you, like coupons, because they think you are going to get more popular and raise your price.  This catches on and eventually you are selling future cups for $2!

Every one of those future cups is debt on you.

People catch on that you have thousands of future cups sold, but you haven't hired anyone or even made a better sign.  They figure they are never going to get their cups, so they try to sell their cup vouchers.

As people begin selling these future cups, they realize people don't want them for $2, so the price begins to go down a bit.

Now, your lemonade stand was hit by an SUV, and instead of rebuilding it properly, you put up a cardboard sign on a stick and spent some of the future cup money on a snazzy hat.  There's a scramble to sell these future cups people bought, because they have no faith in you owing up to your debt and making the lemonade they paid in advance for.  The price drops dramatically.  Now, you can't even sell existing cups for $1, because anyone can go buy a cup you promised someone else for 50 cents.


Now, you can't even make a cup of lemonade for 50 cents, considering you have to buy the cups and pitchers and lemons from other people, and they aren't lowering their price just because you can't afford them.  So, you have to close up shop.

The real problem with the stock market is that lots and lots of people planned on retiring by selling their delicious lemonade vouchers, but you spent all their money on fancy hats instead of making the lemonade.