The market crashed $3Trillion… where did it go?
This is an area where engineers and physicists (and other similar types) have real problems.
The short answer is that the money doesn’t go anywhere as it never existed in the first place. That does not, however, mean it is completely fake and does not mean it had no effect on the real world. A stock’s price is based on the current estimate of future earnings and works to fund company operations both directly and indirectly.
Yes, there are animal spirits, vibes, and short-term fluctuations as well as fraud and shenanigans — but the basic contention in the para above is still true.
Engineer types who are used to conservation of energy and such often simply cannot understand that the money is just gone when the stock market declines. Vanished. And that’s because it never really was anywhere. That is completely counterintuitive to them and their sensibilities.
But that is how it works.