Why Do Stock Exchanges Even Exist?
No, this is a real question. Only the completely detached, profit over anything world view could conceive of a stock market.
But you say, there are currency markets, and crypto-currency markets, and those are necessary, maybe even good, so why would you consider a stock exchange evil... or worse?
You may say, "Well, i have some stocks, and i want to exchange them for money, so there should be a convenient market for me to sell them. They are mine, right? Since i own them, i should be able to sell them? Right?"
But this kind of thinking can only happen because of the huge disconnect between the stock market and what stock really is.
Imagine that you were at a gambling casino, but instead of playing with chips, you actually were playing with people's jobs. Sometimes you were up, but mostly your were down. What would it be like to go home and find your sister, neighbor, cousin are out of work... well, because you bet their jobs on red... and lost.
This is closer to an actual view of what the stock market is.
A stock is a paper that says you have partial ownership in a company. It actually represents people, machinery, goods and services. How can we just, willy-nilly, trade those?
It is only through our huge obfuscation that we do not see this.
The average person owns shares through their mutual fund which holds their shares in various trading houses, which has their shares in the stock exchanges which are actually housed in Cede and company.
So, instead of a person owning a portion of a corporation. And this person being invested in the future of that company and all of its employees. That person sees it as nothing more than a chip you play with at a casino.
If we actually cared about our country, our economy, our environment, then we would want to have ownership in the corporations that make up the industry that supports that. We would want to make sure that OUR corporations were doing the best job they could, both for ourselves and our environment.
If we actually cared about our corporations, then we would get the stock and almost nothing would pry it from our fingers.
How much would someone have to pay you to pollute in your back yard?
How much would someone have to pay you to destroy your job base?
How much would someone have to pay you to make your life a living hell?
Well, according to the stock market, not much.
And, if you don't want to sell, well, it was never yours in the first place, so... here is your consolation prizes, thanks for playing.
And things in the stock market are worse than you could ever imagine.
Imagine that all the stock was owned by richest people in the world, and they knew what the stock was worth, and would never sell it for a pittance. Especially on the stock market.
Well, these people have preferred stock in ALL the big corporations. And preferred stock calls all the shots. Controls all the important controls. Preferred stock for us; Common stock for the common man.
So, all of us common men, actually own nothing of import. We don't really own any control of any of the corporations we supposedly own.
Further, imagine that there exists 5 imaginary shares for ever real share.
And that one real share was owned by the banks, owned by the FED.
So that all that was left, being traded on the stock exchange was imaginary shares of imaginary companies. That people bet on the price movements of.
One day, the facade will crack, and this scam will be seen for what it is. On that day, everyone will find they own nothing!
Ever hear of a DTCC failure to deliver?
You bought a stock, on a stock exchange, AND... well, you bought nothing, here's your money back.
In my view, this happening would be cause to shut down the exchange and count every stock, and find every owner. But, it is usually just ignored. Business as usual. Happens all the time.
So, if you haven't purchased stock, and then had it transferred to you, and then called up the corporation and registered it, you don't own anything.
Some day, the music will stop, and everyone will be looking for a chair, and find that there are no chairs at all.
This is our current stock exchanges. Why do they exist?
I think Corbett called it a ponzi scheme and he was correct. They are paying old investors with new investor money, the old exits and the new wait to exit when another fool pays more than they did, if not they exit with less on another fools dime or they're gonna be the one holding the proverbial bag. Gambling is also a good illustration, I always thought about it in terms as such since many deceive themselves and others into believing that it's not a matter of luck.
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Just like with house prices, boomers are going to be really upset with the stock market.
Each generation has indeed bid up the price over the last one.
And now, we are at the first generation to really be selling.
Plus, we are the first generation that cannot, or is not buying.
I am unsure if i would call it a ponzi scheme, as it is not exactly a ponzi scheme, plus it is also a completely different kind of fraud.
I think it's quite fitting because of how everyone gets paid, and like you allude, as the price might go to the moon how many can sell and how many are going to watch it plummet into hell trying to sell as nobody is buying, much like old investors being paid by new investors in a ponzi, no more new investors and the jig is up.
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A very touching point and one of my favourite things you express. The only stock I legally own, like the one that is mine and not held by another entity is the the only stock in the corporation I own. Yes, I own an incorporated company, it has one stock, I own it. Really. Off Grid Paradise Ecovillage Inc. It's all mine.
Most people don't understand what the stock market is and if the masses knew it would probably turn to Crypto.
If people treated stock ownership in a large corp, as you treat ownership in your own company, than we would have some good corporations instead of the evil blights on humanity that we have now.
I see, in the future, no less than 100 years, that large corporations will be all but dead. No one would dare create such a monster.
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STOPThe exchanges had purpose before the age of computers and “fast computer trading” and now the old system has been exposed for it’s weaknesses. Blockchain and tokenization will actually be an interesting development in this space. Lord knows they will still try to take advantage of any loopholes there are no matter what.