# Why Should There Be A Stock Market?



## shintao (Dec 29, 2010)

Is there any part of the business cycle that requires a stock market?

I ask because it does nothing for workers, and as far as I can see it does nothing for the economy. And a corproation should be borrowing from banks, which show consumers their credit is good. It tends to take money out of circulation, and steals corporate profits that should be going to workers to stimulate the economy.

Does the stock market somehow benefit capitalism?

Not looking for an argument here, just some thoughtful responses.


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## Bern80 (Dec 29, 2010)

shintao said:


> Is there any part of the business cycle that requires a stock market?
> 
> I ask because it does nothing for workers, and as far as I can see it does nothing for the economy. And a corproation should be borrowing from banks, which show consumers their credit is good. It tends to take money out of circulation, and steals corporate profits that should be going to workers to stimulate the economy.
> 
> ...



A stock market is just that; A market. A centralized location for people to purchase various products. In this case shares of ownership in a company. That a centralized market place for doing that would eventually manifest is only logical. I guess I have to say the question doesn't make sense to me. Do you really mean to ask 'should businesses be allowed to sell partial ownership of their company as a means of raising capital?' 

Technically no, a business cycle doesn't require a stock market. Those of us interested in purchasing ownership in a company could do it the hard way. We could try to figure out somehow who owns how many shares of stocks, who's willing to sell them and for what and try and determine what the going rate for them ought to be.

It benefits capitalism in the sense that the market for stocks is more efficient when everyone can see in one location what shares are trading at. And yes the ability to raise capital by selling ownership of a company does do something for workers. It allows them to keep their jobs. Businesses need capital to operate and selling ownership in the company in exchange for dividends or the potential for those pieces of ownership to be worth more than what you paid for them, is one way of generating capital.

I don't see how a stock market steals from workers. Okay let's pretend there is no stock market. You would now contend that businesses have extra money to pay employees? No they wouldn't. The fact that they pay dividends to non-workers means those none workers gave the business money in the first place. Now that money given to the business in exchange for ownership is gone. The business generates more income through the sale of stocks than it pays out in dividends for thos stocks. Otherwise businesses wouldn't do it. Which means if you take away the ability to sell ownership in a company that company has LESS money to pay its workers.


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## william the wie (Dec 29, 2010)

The stock market is a feedback mechanism to identify profitable areas of investment. If you have a better one the whole world wants to know it.


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## JBeukema (Dec 29, 2010)

shintao said:


> Is there any part of the business cycle that requires a stock market?
> 
> I ask because it does nothing for workers, and as far as I can see it does nothing for the economy. And a corproation should be borrowing from banks, which show consumers their credit is good. It tends to take money out of circulation, and steals corporate profits that should be going to workers to stimulate the economy.
> 
> ...


if you have to ask...


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## Toro (Dec 29, 2010)

Stock markets are vital to economic growth.  They raise capital for corporations to invest and stock prices are signals on where to allocate capital in the economy.


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## Mini 14 (Dec 29, 2010)

Communist countries don't have traditional stock markets.

I wonder why?


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## Willis (Jan 5, 2011)

Yes the stock market is the major tool for capitalists to work with and they use it for their own good rather the good of the common employees.This system is ruining the world's economy but no one knows it.


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## editec (Jan 5, 2011)

The stock market used to exist as a lamppost (or was it under a tree?  I can't remember exactly) in lower manhattan where people hawked their shares.

Obviously it served those people seeking to sell shares of their ventures and those seeking to purchase shares in businesses.

The stock market in itself, actually serves labor in thew sense that it makes it possible for capital formation that will put labor to work.

And while it is true that the market we have today has been manipulated often such that the working classes suffer, it's not the market, but the people in it who are responsible for that.


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## Douger (Jan 5, 2011)

[ame]http://www.youtube.com/watch?v=W1jhF7KlESE[/ame]


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## Bern80 (Jan 5, 2011)

Willis said:


> Yes the stock market is the major tool for capitalists to work with and they use it for their own good rather the good of the common employees.This system is ruining the world's economy but no one knows it.



Didn't actually read my post or editec's.....did ya.


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## dilloduck (Jan 5, 2011)

What used to be a market is now a casino.


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## Sallow (Jan 5, 2011)

Good answers from Bern80, William the Wie and Toro.

The Stock Market is vital to the economy. Full disclosure: It's the industry I work in..

But I've always thought that.


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## dilloduck (Jan 5, 2011)

Sallow said:


> Good answers from Bern80, William the Wie and Toro.
> 
> The Stock Market is vital to the economy. Full disclosure: It's the industry I work in..
> 
> But I've always thought that.



Whose economy-------day "traders" and middlemen ?


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## Valerie (Jan 5, 2011)

dilloduck said:


> What used to be a market is now a casino.





Shoulda rolled the dice on Caterpillar at $30 like I told you!  





> Caterpillar, Inc. Common Stock
> (NYSE: CAT )
> *Last Trade:	93.97
> *
> CAT: Summary for Caterpillar, Inc. Common Stock- Yahoo! Finance


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## dilloduck (Jan 5, 2011)

Valerie said:


> dilloduck said:
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> > What used to be a market is now a casino.
> ...



That's what the croupier says to me all the time too.


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## Sallow (Jan 5, 2011)

dilloduck said:


> Sallow said:
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> > Good answers from Bern80, William the Wie and Toro.
> ...



This is answered very nicely in this thread by others. Add in all major economies have some form of stock market.

What might have been interesting is if you posted some criticism of the Electronic Market.

Now there you have a real dog fight.


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## dilloduck (Jan 5, 2011)

Sallow said:


> dilloduck said:
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of course-----people from every economy have learned that they can make money without working by just gambling. Good thing no one ever manipulates it for personal profit.


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## Sallow (Jan 5, 2011)

dilloduck said:


> Sallow said:
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And this hasn't or isn't been done in every commercial enterprise, sometimes to the determent of the consumer?

This is the reason for regulation.


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## MaggieMae (Jan 5, 2011)

Sallow said:


> Good answers from Bern80, William the Wie and Toro.
> 
> The Stock Market is vital to the economy. Full disclosure: It's the industry I work in..
> 
> But I've always thought that.



If you're a hedge fund manager, you're probably a billionnaire.


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## Sallow (Jan 5, 2011)

MaggieMae said:


> Sallow said:
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> > Good answers from Bern80, William the Wie and Toro.
> ...



Far from it.

I work in IT. Techs do okay..but I'm not rich..not by New York standards anyway.


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## william the wie (Jan 5, 2011)

Sallow said:


> MaggieMae said:
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If you want to get rich go to Moody's and S&P in NYC to find out the cheapest way to get copies of their studies on dividends, their reinvestment and the different asset allocation models and reallocation techniques to find a low risk, moderate return way to riches. Only an idiot goes into a casino for any reason other than to figure out what casino stock to buy. The folks at the ratings agencies can show you dozens of ways of how to become the house rather than the sucker and can clue you in on how to figure out what is the right way for you to do it.


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## Valerie (Jan 5, 2011)

dilloduck said:


> Valerie said:
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See?  I've never even heard of that word as I am not a gambler...


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## Sallow (Jan 5, 2011)

william the wie said:


> Sallow said:
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That's one way. I played the Market it a little last year and did quite well. And did it just by paying close attention to the news and my surroundings.


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## uscitizen (Jan 5, 2011)

Why should there be a stock market?

So that those who do not actually do not want to produce any products can still make money.
And who do you think they get that money from?  The suckers who play the market.
Why do you think they want SS privatized?


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## william the wie (Jan 5, 2011)

uscitizen said:


> Why should there be a stock market?
> 
> So that those who do not actually do not want to produce any products can still make money.
> And who do you think they get that money from?  The suckers who play the market.
> Why do you think they want SS privatized?


The suckers choose to become suckers.


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## uscitizen (Jan 5, 2011)

william the wie said:


> uscitizen said:
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> > Why should there be a stock market?
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Yep by using 401K's and if SS becomes privatized....

But there are plenty of eager suckers as well out to make their fortunes the easy way


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## uscitizen (Jan 5, 2011)

When a company actually sells stocks they benefit, otherwise the only benefit is their percieved stock price on the market to use as collateral and such for borrowing money.
Beyond that it is like trading baseball cards.


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## william the wie (Jan 5, 2011)

uscitizen said:


> When a company actually sells stocks they benefit, otherwise the only benefit is their percieved stock price on the market to use as collateral and such for borrowing money.
> Beyond that it is like trading baseball cards.


That depends on dividend yield. If a stock does not have a dividend yield it should be presumed to be a POS until proven otherwise. Only suckers and private equity firms play with nonyielding stocks.


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## Bern80 (Jan 5, 2011)

uscitizen said:


> william the wie said:
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Well a sucker is born every minute. Case in point, YOU. There is nothing righteous about working for money. The purpose of life is to live it. It costs money. Working hard 40 hours a week or more for 40 years is one way to get money. But it's far from an efficient one. I don't know about anyone else but I kind of enjoy my free time, so I aim to get as much of it as I can. I really don't see the point in working for money with little time to actually use doing what I want. Do you? I guess you do. You're a sucker. You've been duped into how life is 'supposed' to go. Not only that you dub anyone else who finds a different way as evil.


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## shintao (Jan 9, 2011)

Bern80 said:


> shintao said:
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> > Is there any part of the business cycle that requires a stock market?
> ...



A solvent company need not sell stocks or make bank loans, but the difference is the stocks are not liquid like cash from a bank. Stock worth sits in deposit out of the economy, while a bank loan brings back cash that can be circulated. We are talking billions of dollars out of circulation that came from the profits made by workers. Selling stocks may or maynot affect workers, depending on why they were being sold. Would you buy stock in a dying company?

Anyway, I appreciate your insight.


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## shintao (Jan 9, 2011)

Valerie said:


> dilloduck said:
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No, no, the word isn't groper. Croupier.


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## Bern80 (Jan 10, 2011)

shintao said:


> A solvent company need not sell stocks or make bank loans, but the difference is the stocks are not liquid like cash from a bank. Stock worth sits in deposit out of the economy, while a bank loan brings back cash that can be circulated. We are talking billions of dollars out of circulation that came from the profits made by workers. Selling stocks may or maynot affect workers, depending on why they were being sold. Would you buy stock in a dying company?
> 
> Anyway, I appreciate your insight.



So I'm to understand then, it's not really a market for stocks that you are asking about. It's really the concept of stock itself?


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## American I Am (Feb 27, 2011)

shintao said:


> Is there any part of the business cycle that requires a stock market?
> 
> I ask because it does nothing for workers, and as far as I can see it does nothing for the economy. And a corproation should be borrowing from banks, which show consumers their credit is good. It tends to take money out of circulation, and steals corporate profits that should be going to workers to stimulate the economy.
> 
> ...



I lost thousands in the stock market right after 911, it took 7 years to get it back, and then right smack dab in the middle of GW and Obama, I took another MAJOR concession in my investments, I felt like the investors of ENRON. Since this time, I for one have found out that I am my own best investment, I no longer invest in the stock market, I take my hard earned money and invest in MYSELF!!!!


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## dilloduck (Mar 8, 2011)

American I Am said:


> shintao said:
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> > Is there any part of the business cycle that requires a stock market?
> ...



Where's the thrill in that ? You don't get to be part of the crowd that helps set prices for the rest of the people who work instead of manipulate money for a living.


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## Toro (Mar 8, 2011)

Kudos to the mod who banned the spammer.


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## editec (Mar 8, 2011)

shintao said:


> Is there any part of the business cycle that requires a stock market?
> 
> I ask because it does nothing for workers, and as far as I can see it does nothing for the economy. And a corproation should be borrowing from banks, which show consumers their credit is good. It tends to take money out of circulation, and steals corporate profits that should be going to workers to stimulate the economy.
> 
> ...


 
Stock markets work to bring the money to the folks who might be able to do something productive with it.

Admittedly there are serious problems with the administration of it, the insider trading, the arrogance and so forth, but the stock market is necessary if we are going to allow corporations to raise capital.


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## dilloduck (Mar 8, 2011)

editec said:


> shintao said:
> 
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> > Is there any part of the business cycle that requires a stock market?
> ...



Imagine how many people would be needing a job if they couldn't gamble on the market.


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## Bern80 (Mar 8, 2011)

dilloduck said:


> editec said:
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> > shintao said:
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You make it sound as if there is something inherently altruistic about generating wealth through a job as opposed to some other means. If that's the case, it's you who has been duped.


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## whitehall (Mar 8, 2011)

shintao said:


> Is there any part of the business cycle that requires a stock market?
> 
> I ask because it does nothing for workers, and as far as I can see it does nothing for the economy. And a corproation should be borrowing from banks, which show consumers their credit is good. It tends to take money out of circulation, and steals corporate profits that should be going to workers to stimulate the economy.
> 
> ...



You must live in a hole in the ground with those Geico characters shinto. Retirees would be eating dog food if they depended on scams like the "new deal" and "the great society" to fund their retirement. There isn't a dime in the so-called social security fund. Politicians have been stealing from it since it was established and LBJ made it official that FICA taxes would go into the government slush fund. Every pension plan is heavily invested in the stock market and they remain solvent even through fluctuations in the economy. Would you put your future in the hands of politicians who allowed Frank Raines to cook the books in Fannie Mae and walk away with 90 Million dollars for three years work? Would you trust a pervert congressman who didn't know his boyfriend was running a male prostitution ring out of his apartment. Reagan was right, government isn't the solution, it's the problem.


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