DUmmy arcanenumber is an absolute imbecile. Luckily, he realizes it, and even better, he lives in the land of know-it-all nadin:
arcane1 (1000+ posts) Wed Jun-29-11 10:32 PM
Original message
Do we really, truly need the stock market?
I know that if it vanished tomorrow, it would create chaos, but couldn't we phase it out and do much better? Along with all the other math equations that make up the "investment" world. Does the stock market actually do anything, besides what it does for those who put money into it?
I admit, this question is based on substantial ignorance on my part, so hopefully I'll learn something
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1388605#1388660DUmmy arcanenumber is a master of the understatement. Arcanenumber is to finance as stevenumbers is to seduction.
Johonny (1000+ posts) Wed Jun-29-11 10:52 PM
Response to Reply #2
13. It makes sense for the consumer and the producer
why people that have no earthly need for the commodity are allow to basically bet on it seems odd and not always very productive.
So if you say make corn flakes I can see why you want a commodities market for say corn is helpful to you. For me I see no earthly reason why I can buy so much corn. WTF would I actually do with it if I got stuck with it Although some economist show some speculation can help the producer and consumer and those can be helpful to the market.
onehandle (1000+ posts) Wed Jun-29-11 10:37 PM
Response to Original message
3. Yes, but it needs to be taken offline.
In the old days, people invested in stock. Companies actually developed and built things.
Now the majority of the stock market 'investors' are douchebags buying and selling in seconds based on nothing.
It should go back to the old way. You got certificates and after a reasonable amount of time, you made money. Or not.
DUmmy Onehandle has a grasp on the function of equity markets that's just about as firm as DUmmy arcanenumber's.
While these pinheads were batting around their idiot comments, nutcase nadin was busy on the google:
nadinbrzezinski (1000+ posts) Wed Jun-29-11 10:39 PM
Response to Original message
6. Yes, BUT it needs to be regulated, heavily regulated
the function of the stock market is simple, but complex at the same time. It's role is to raise money from private individuals to invest in companies. Think of these capital investments as micro loans to saith companies. No, I don't care how rich you are... but a billion plus is not an easily raised amount... even 500 million, average IPO.
The problem is that the regulations that kept it in check and doing what it is supposed to do have gone, and these days it is also used for other things, like leverage stocks...
That shit needs to stop. Of course that also means that dividends will go down... why the ones at the top fight that.
arcane1 (1000+ posts) Wed Jun-29-11 10:46 PM
Response to Reply #6
11. Now I could see that being a useful thing, up to a point
perhaps if there was a specific expiration date or something.
But I doubt that Chevron and GE really need to rely on "investors" in order to help them grow, with all the profit they are making. And "growth" cannot continue indefinitely for any company, so the growth turns into cost-cutting and layoffs/outsourcing.
Maybe if stocks were more like bonds, they would work better as intended..? Then again, I no[sic] little about bonds either
And yet another massive understatement from DUmmy arcanenumber.
Okay, nadin will explain again, slowly. And as a bonus, she will explain bonds, but only very technically. The google is so hot, it's smoking:
nadinbrzezinski (1000+ posts) Wed Jun-29-11 10:56 PM
Response to Reply #11
14. Actually Chevron relies on investors
Part of their working capital, a large part, is investor based. Which is also part of the problem. They need to answer, by law mind you, to the only thing that matters to the investor, Return on Investment... why they will do anything to improve profit. And yes, all them pesky regulations get in the way.
So does GE, by the way.
They are publicly traded companies.
Now the problem with these two companies is not that they are traded in the exchange, but rather the size of these two behemoths, and they should be broken down, as at this point we have entered the area of a monopoly that controls a sector of the economy through economies of scale. No, not me saying that... actually would be VERY CAPITALIST to do such. Adam Smith abhorred monopolies (which were a problem under the mercantilistic system of his age. see the East India Company that controlled all trade to the American Colonies, under Royal fiat)...
As to bonds, they are a type of stock very technically speaking.
The problems with the US economy and yes the stock exchange, is that we are no longer functioning in a capitalist economy and the exchange is as free for all as it's been since oh 1929... and we know how that party ended. The stock exchange works best actually when it deals with small to medium sized companies and behemoths, aka monopolies, are not allowed to rise... that means regulations. Oh and Adam Smith had a three page warning on that famous hand of the market place... after he mentioned it ONCE. I love to show that to free market fans who dare go there in my presence.
A warning to you free market fans! Don't dare do that in the presence of know-it-all nutcase nadin.
Jack Sprat can eat no fat:
Jack Sprat (1000+ posts) Wed Jun-29-11 10:40 PM
Response to Original message
7. We need to extricate all retirement funds from it
They hold those hostage and the lives of older Americans dependant on them too.
What does it do? It creates all sorts of speculation driving up prices of commodities for one. It allows people with extra money to make money off the labor of others. It creates confusing financial instruments, like CDS (credit default swaps) to swindle unaware governments (local, state, and national) out of their financial solvency. I'm sure some others could offer up more things it does.
The lack of fat in his diet has made DUmmy Jack Sprat really stupid.
A lousy freeper troll:
spin (1000+ posts) Wed Jun-29-11 10:42 PM
Response to Original message
8. I'm far from rich but if I didn't have a 401(k) and an IRA ...
I would have to live on a small pension and social security. My 401 is invested in stocks and while it has had ups and downs, it has grown over the years and has made my retirement easier and more enjoyable.
This troll DUmmy spin is not adequately taxed.
Hugabear (1000+ posts) Wed Jun-29-11 10:58 PM
Response to Reply #8
15. Your retirement should not have to be dependent upon the whims and fortunes of corporations
That's what makes this so ****ed up.
What sayest the google?
nadinbrzezinski (1000+ posts) Wed Jun-29-11 10:58 PM
Response to Reply #9
16. The earliest form of a stock exchange
was probably in Greece... that has been a long time indeed.
The first identifiable exchange in modern terms rose in the 13th century.
The first stock exchange we could call such properly came in the 15th...
So I would not go that far.
And you think insurance is a modern invention too? Again Athens had a healthy exchange of that in the fifth century bce
nadinbrzhzhzski, with the goo goo googly eyes.
Sorry. Can't help it, I've got that song in my head now.
cbdo2007 (1000+ posts) Wed Jun-29-11 10:51 PM
Response to Original message
12. Oh good, this again.
I love hearing from the financial geniuses here at DU!
