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Termyn8or -> RE: Imagine there's no stock market... (6/7/2010 9:55:59 PM)
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I have read the first page of responses tee, and decided to jump in before the flames started.
I have been a proponent of abolishing the stock market. I have good reason. You see, what a half decent investor will tell you is that stock prices do not fluctuate as much from the performance of the company, but what it's expected performance will be. What's more they are talking about the perfomnce of the stock in the first place, as this is their primary interest. They don't care if all the compamy's assets burn to the ground as long as the value and the dividends stay up. And this is only a half decent investor, a good one, if you can get them to talk, will tell you to follow the big money, just like at the racetrack. If I were willing, you could give me a million bucks and I will use about a hundred grand of it to educate myself more about the subject, and with the rest have maybe half a chance of parlaying that up. Most people don't even know these basic principles.
What's more, it is always a gamble of course. Just like in a high stakes poker game where those with more assets can buy the pot, those with the big money can manipulate the stock's performance much more easily than even the performance of the best run company. They could buy a shitload of stock, it will come available, they can do it fast enough that the company cannot use all that money all at once, so they will be stuck just collecting interest on it. They will have to lower dividends. Before the commoners can unload the stock, they sell, thereby flooding the market. Whether these practices are moral or not is not the point, they are perfectly legal.
Now if you personally know someone at a company and find that the stock is going to split or something, or that research has just hammered the bottom line, or whatever, if you make a windfall profit off of it you have better never even been in a car with anyone from that company even getting a speeding ticket. Even though the SEC looked the other way in 2001, they will not do that for you. There were some strange transactions right around the time then, don't hear much about that anymore do you ? Never been disproven, just swept under the rug. That is what money and power can do for you.
Now, there was a day way back when, when it worked more normally. Indeed if there was never a stock market things would be different. The way I see it the economy would differ greatly, it would be smaller in scale, but alot more stable. Businesses would diversify and grow on their own profits, and if outside investors were brought in, they would be right there at the board meetings. Right in their face so to speak. In reality all the things we wouldn't have, we wouldn't have needed.
But now we have so much vested interest in this mess there is only one solution, which is a near total collapse of the economy. You (and I) cannot really fathom what it would be like. I think the world would be alot better off. Many may disagree, but I think quite a few will change their tune after the real crash, which is still to come. But we are so deep in the hole now that really, just forstalling the inevitable doesn't matter anymore, even though that's pretty much what they did. If they can do it once more, kudos, because I don't think it is going to be all that easy.
What's more, many people with real money are holding quite a bit of gold and foreign currency, in fact fortunes can be made just doing that today, and have. Thus those so enabled are isolated from the failure of the US economy to some extent. Remember the object of any business venture, regardless of it's nature is to gain more than you lose. What would you do ? I would try to keep my ass afloat, no matter what.
Pulling out is no option. Pull out slow you lose, pull out fast you lose. Even if the bigwigs pull out, even the same day, there will be a scramble for something other than USDs, which is going to cost some people some money. But after having enjoyed la dolche vita for fifty years, and some sort of hedge, they don't care.
Some of the bigwigs are simply addicted to money. They grow more hungry every time they eat, like any addict. But there is another kind of bigwigs who are planning, very very intelligent, who think multi-generationally. They are think in terms of how much advantage they can leave their progeny. Both of these types run the stock market as effectively as players in a poker game who can dictate what cards everyone gets, just by instructing the dealer. The stock market is the perfect medium for this type of shit. And it is shit and it should have never been concieved.
What would have happened without it ? Maybe Henry Ford wouldn't have been able to pay the astronimical wage of a whole dollar a day right as fast as he did. Maybe there would be no General Motors, no ATT, no AIG (!), no alot of other things. Maybe our computers would still be running 8080 microprocessors, or even old TTL. But we would never miss it if we never had it. Maybe there would be no television networks, or modern media. Perhaps we would be somewhat isolated from the rest of the world, except fot those who can fly around and all that, but then there might not be supersonic transports, maybe not even huge airliners. Trade would be limited so we would have to be somewhat self sufficient, and there would be little in the way of resources or impetus to invade the rest of the world.
The more I think about it, the more appealing it gets. But to do it you would have to go back to the 1700s and write a Law into the Constitution. No other way because it would otherwise be an infringment. Then you have to figure out just how to word the Law. Then other countries might look down on us, like those who find Sharian Law repulsive. Perhaps then we would be under attack from other countries because their commercial interests would be negatively affected and the US would be seen as in need of a regime change. And then without the stock market, we would not likely have such a strong military and therefore be quite vulnerable to a real takeover by a foreign power.
How does that grab ya ?
T
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