Do We Really Need The Stock Market?

The DOW Jones goes up to 11,500 or whatever…and we get excited.

The DOW Jones goes down below 9,000…and for some reason…we panic.

Have we depended on the stock market a little too long folks?  If you think about it, to my knowledge not a single private company (not listed on the DOW) caused this recessionary economy we live in…not one.

It was the big, huge, too big for their shorts “Wall Street” that got us here.

So, why not let them go?

Who would be around to “bail out” any “mom and pop” business if they made horrible, disgusting decisions that warrant jail time?  Nobody.

Why the hell are we bailing out the folks that put us in this situation then?

Then…

The more important question to ask is:

What would REALLY happen if we ditched the stock market altogether and returned to private business 100%?

Well, one thing that would happen, is we would discover how the money was managed right?  So, the companies that were doing things wrong would dissolve right (if you’re just “falling for the company line” by the way, you might want to re-evaluate your situation and read your companies public stock report)?

Some jobs would be lost, but I believe that as humans, we adapt.  We get better, we learn, we move on.  Some people won’t be able to do that I suppose, but I feel that when the “pain” exceeds the “pleasure”, they will do something about their situation too.

So, returning to “private status”, what would these big businesses that have relied on public money do?  They would have to actually serve the customer right?  They would, instead of having that comfy cushion of investor money, have to actually think about how to operate.

I could be wrong with all of this for sure, I’m quite opinionated, and this has been rattling around inside my head for quite some time…now it’s time to get the “evidence” to support my theory.

Thanks for reading.

About Joseph Ratliff

I'm a copywriter and marketing strategy consultant.
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6 Responses to Do We Really Need The Stock Market?

  1. billbirnbaum says:

    The stock market is very much a “used car market.” Were you to purchase a new car, you’d like to know that, whenever you chose, you’d be able to sell that car on the secondary (used car) market. Same with financial securities, including equities (stocks). Those who initially invest in the initial public offering (IPO) or earlier, need to know that, one day, they can exit. For that reason, we need the stock market. Bill

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    • Joseph Ratliff says:

      Hi Bill, thanks for reading my blog here, and for the insight. :)

      I wonder if we could loosen the “strangle hold” the stock market seems to have on people who don’t understand the financial securities (like myself). The media (I don’t watch news very often, but when I do…) seems to focus on that “DOW” number so intently, that it guides the perception of the entire economy’s health…but it would seem to me that the private companies should be factored into that “health reading.”

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      • billbirnbaum says:

        You’re right, there’s lots of attention paid to the DOW 30. That index is actually a measurement of the stock price of thirty very large companies. Far removed from Main Street or, what is sometimes called, “the real economy.” The Standard and Poor 500 is a measurement of the stock prices of 500 large, though not super large, companies. Still pretty far removed from Main Street. The Russell 2000, a less well known measurement is somewhat closer. It reflects the stock price of 2000 mid-sized companies. While the Russell 2000 is, theoretically, the closest reflection of what happens on Main Street, it’s important to remember that even those 2000 smaller companies are corporations — hardly a perfect indicator of what’s happening with the local hairdresser or barber shop. Bill

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      • Joseph Ratliff says:

        Thanks for the continued insight Bill. :) I appreciate it.

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  2. Hi Joseph,

    IMHO, the stock market is still a place to make money…albeit, one where most don’t do their homework. It also can easily be manipulated to cater to the needs of the corporate and banking elites.

    It is no secret the Federal Reserve has more power now, given to them by congress with the passing of the Finance Reform bill earlier this year. The fact that the “audit” of the Fed was not included in this bill shows how powerful these corporations are and how many in congress are complicit in catering to them.

    Bernanke even came out in support of the stock market recently, via a Washington Post Op Ed which is unheard of by a Fed chairman.

    There are more billionaires in the U.S. than any other country. Just a few of them can band together to move a market in their direction. The Fed has given money to Goldman and J.P. Morgan and made them bank holding companies. They have bailed out individual companies like GM and AIG. AIG was the counter-party to many of the derivatives of J.P. Morgan. Lehman died because they didn’t give enough money to the right people. Goldman has all of their former people in high places.

    But it’s the banks who are the one’s in trouble. They will need even more money moving forward. I wrote an article on this about B of A and foreclosures; The Real Reason Bank of America Halts Foreclosure In 50 States – They’re Broke! http://buygoldandsilversafely.com/economy/the-real-reason-bank-of-america-halts-foreclosure-in-50-states-theyre-broke/

    Expect more QE, more bailouts, and eventually the truth revealed that the stock market is overvalued. This doesn’t mean that one can’t jump on trends and make money though (whether up or down). At least with the influx of ETFs, they can bet on the market in more ways, including up or down. I used the word “bet” for a reason, ha.

    Just don’t get greedy and take profits. That’s the key to successful investing.

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