Can someone who understands the Stockmarket please explain this to me.
It seems to me that Wall Street has become an out-of-control juggernaut that is a law unto itself. First they brought us the GFC due to their irresponsible and immoral behaviour (and total lack of oversight by the government).
Now we have a Stockmarket crash caused by panic selling by the institutional players, of stocks and shares that seem likely to be affected by the impending pandemic.
Now, I understand that the role of the institutional players is to protect their organisations against financial losses resulting from a drop in share prices of companies that are potentially exposed to damage resulting from the pandemic. It appears however, that panic selling of such stocks drags the whole market down causing much greater losses overall than if everyone was just to ‘sit it out’ and take whatever losses occurred as they occurred.
I realise that what the institutional players do is to ‘cover their ass’ and force the smaller players (individuals, superannuation funds etc) to take the loss and therefore fund the institutional players gain.
What this (and the GFC) looks like to the average punter, is the big financial institutions stealing from the rest of the population. (I guess if you have lots of shares in the big financial institutions this is marginally acceptable)
It just seems to me from down here on the ground that Stockmarket peaks and troughs are nothing more than a strategy engineered by the ‘big players’ to steal profits from the rest of society that is exposed to the market but not actively engaged in playing it.
I kind of wonder if there isn’t a way to manage the Stockmarket so that it isn’t such a damaging force for the rest of society. Could the government suspend trading (for e.g.) at the first sign of a significant crash and say to the institutions – “ride it out” rather than take the rest of the community down for their sole benefit.
It just looks to me that the Stockmarket is a massive wealth-generating machine for the elite financial institutions that do not seem to answer to anyone and are able to distance themselves from the negative global consequences of their actions (as happened to most of them – excepting Lehmanns – in the GFC.)
Now I probably have all of this wrong but I’d like to hear from people who actually know something about how it all works.
It seems to me that Wall Street has become an out-of-control juggernaut that is a law unto itself. First they brought us the GFC due to their irresponsible and immoral behaviour (and total lack of oversight by the government).
Now we have a Stockmarket crash caused by panic selling by the institutional players, of stocks and shares that seem likely to be affected by the impending pandemic.
Now, I understand that the role of the institutional players is to protect their organisations against financial losses resulting from a drop in share prices of companies that are potentially exposed to damage resulting from the pandemic. It appears however, that panic selling of such stocks drags the whole market down causing much greater losses overall than if everyone was just to ‘sit it out’ and take whatever losses occurred as they occurred.
I realise that what the institutional players do is to ‘cover their ass’ and force the smaller players (individuals, superannuation funds etc) to take the loss and therefore fund the institutional players gain.
What this (and the GFC) looks like to the average punter, is the big financial institutions stealing from the rest of the population. (I guess if you have lots of shares in the big financial institutions this is marginally acceptable)
It just seems to me from down here on the ground that Stockmarket peaks and troughs are nothing more than a strategy engineered by the ‘big players’ to steal profits from the rest of society that is exposed to the market but not actively engaged in playing it.
I kind of wonder if there isn’t a way to manage the Stockmarket so that it isn’t such a damaging force for the rest of society. Could the government suspend trading (for e.g.) at the first sign of a significant crash and say to the institutions – “ride it out” rather than take the rest of the community down for their sole benefit.
It just looks to me that the Stockmarket is a massive wealth-generating machine for the elite financial institutions that do not seem to answer to anyone and are able to distance themselves from the negative global consequences of their actions (as happened to most of them – excepting Lehmanns – in the GFC.)
Now I probably have all of this wrong but I’d like to hear from people who actually know something about how it all works.


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