Ed,
This format is quickly getting awkward but I will repeat all that has been said to order to restore trains of thought. In response to a message I wrote, you wrote:the same market that was involved in the great depression?
The great depression was started when the government would
not live up to it's promises in backing up banks. The market
didn't 'start' the depression, it was just a reflection of it.I realize that the market didn't really cause the depression but visa versa. I tend to over simplify things sometimes because it makes people like yourself draw me out to examine old thoughts and conclusions... I love the spirit of debate!!!
People lose vast fortunes in the stock market everyday.
This really isn't true - at least in the way you mean. Traders
and Speculators lose money all the time because they are taking
major risks daily. Investors in for the long haul who are well
diversified rarely, if ever, lose their fortunes.I was working for an investment company who specializes in pensions
in 1988, several months after the crash of October 1987. I remember
asking one of the account managers what the effect was of the crash.
He said that there was next to no effect on their long term investments
('blue chips', utilities, etc).Essentially, the market, even if you take into consideration
all the crashes over the past 100 years, has, over that time
period, done better than investing in bonds or stuffing money
in mattresses.Ah but what do I mean anyway?.
What I mean is the market is "sold "as a get rich quick scheme, most of those who go in with that attitude, lose. I have seen men drop $5000 in a single afternoon, it's not much more than a crap game at this level. So the big money goes on the sure shots and the eager investors go for the long shots. Just like the race tracks two kinds of betters... The fortune lost is all the little bits added together... bottom line is I don't think the government is the one that should be making this choice for me... , big mother needs to let go...The only way to make money in the market is for someone else to lose it.
The market is just a giant poker game where the best bluffer wins !This is fundamentally wrong. The market (and the economy as a whole) is *not* a 'zero-sum' game. There is not 'x' amount of money, being swapped back and forth.
Proof for the economy: Since there are ten times as many people in the
world today as there were 200 hundred years ago, your hypothesis would
mean that each person now has 1/10 the amount of wealth as they had
200 years ago. this obviously isn't the case, even in 3rd world nations.Proof for the market: if 50 years ago, there was 100 investors,
but now there's 1000, you're hypothesis means that each investor
would have only 10% of their original worth. Again, this is obviously
not the case.Wealth grows based on things like productivity, technology, etc. That's
why we all haven't starved to death yet, and why we wont starve as
the population as a whole grows.I realize that there is not x amount of money swapped around but in the Stock Market at any given moment there are x amount of assets represented by little pieces of paper as a portion of the total asset Re: the company itself. Those assets actually in many case are depreciating, becoming worth less in each passing day, If you are on that particular reality page?
However I also realize that a company that makes a huge profit increases in value each day from an accounting point of view. Also if you are looking at the market you really have to include all assets that are actively involved in the economy, with current production adding value to the economy as whole regardless of how the individual company performs. I could go on to argue that the advertising, tourism and service industries don't produce any "value" for the economy as a whole. I would also point out that you are not considering the adjusted value verse the dollar. In 1898 you could get a weeks worth of the newspaper for 1/2 cent. Today it is fifty cents per day! Then of course you got to consider that whole import export factor and all the shit that get's destroyed by natural disasters. Bottom line is your still shooting dice.
Now when you get an inflated market sooner or later, you get a correction, I agree with most economists in saying that is the case now...Personally I say give me back my money, let me decide
This I agree with whole-heartedly, though I seriously doubt
the government would ever give up that kind of money.I know we are both right, we'll be lucky to see a 10% return on those funds...
Who is going to decide which stocks to purchase?
The proposals I've seen for 'privatization' would allow the individual to select from a list of 'approved' funds managed by private firms.
I find this mostly acceptable, the government does not need to be an intermediate in these choices, even to the point of approving which funds are acceptable...
The idea of the government manipulating the price of stocks through ideological
investing may sound ridiculous but that is exactly what will happen if this
plan goes through. This plan is back door corporate welfare!!!Again, I agree. I would suspect that if the government were the ones doing the investing that they would abuse it. Not only for corporate welfare, but also to further political
agendas (i.e., I doubt they'd invest in 'politically incorrect' companies such as RJR).
You really don't think the government would in invest in RJR?They will as long as the tobacco lobby keeps Congress's coffers full. remember, we are still giving subsidies to tobacco growers while at the same time cracking down on retailers... . until next time remember...
A free economy has to be free from the government !!! John Galt jr
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