[lit-ideas] Re: Wall Street and Capitalism
- From: "Mike Geary" <atlas@xxxxxxxxxxxxx>
- To: <lit-ideas@xxxxxxxxxxxxx>
- Date: Fri, 10 Oct 2008 13:50:40 -0500
PS:
And this problem has existed SINCE,
regular people thought that they should and were entitled to try and
live beyond, and not just beyond, but WELL beyond their means.<<
Oh, Paul, you sound just like my Yankee grandfather. He's dead now. A lot
of good thrift and hard work did him. Let them play, Paul, let them play.
Life should be fun and exciting and what could possibly be more
adrenalin-inducing or add more drama to our lives than a thoroughgoing
financial collapse? Enjoy it. Bubbles only burst every 10 years or so and
total collapses are a century in the making. Get off your Protestant ethic
high horse and enjoy the crash while you can. No more party pooping.
Mike Geary
Memphis
----- Original Message -----
From: "Paul Stone" <pastone@xxxxxxxxx>
To: <lit-ideas@xxxxxxxxxxxxx>
Sent: Friday, October 10, 2008 1:21 PM
Subject: [lit-ideas] Re: Wall Street and Capitalism
RP: As for the collapse of the stock market, I'm not sure how rudimentary
arithmetic skills would lead people not to invest in it. Stocks and bonds
are about all there are for an ordinary person to buy for their retirement
accounts; there's no simple calculation that would show this was foolish
or
would lead inevitably to catastrophic failure.
Well, let's see, here's the equation:
10 dollars + [ONLY] time + no work = 20 dollars is not an equation.
But THAT is what the stock market is based on.
It is my belief that the moment that 'reg'lar folk' started buying
stock was the day the collapse was set in place. The massive middle
class should not be encouraged to 'invest' because it is de facto, a
gamble, and if you gamble, you have to be prepared to lose and
millions and millions of people losing, when they are in fact NOT
prepared to, is not a good scenario in anyone's eyes.
I don't follow your reasoning in the first sentence. Ordinary people—the
middle class—have been buying stock for years and years; sometimes they
buy
or are given stock in the companies they work for—Starbuck's baristas,
e.g.
Actually, buying (or holding) stock in a company you work for is about
the only thing that makes sense. Because at least then, it keeps
everyone honest and working hard.
This has for the most part been a good deal. And, as I said above, stocks
and bonds are what make up most individual, state, and municipal
retirement
accounts. (That companies like GM and Ford, and municipalities that must
provide retirement for their police and firemen are already running out of
money to fund these pensions, is another, grimmer, story. But this
collapse
was not caused by ordinary people buying divident-paying common stock in
non-trendy companies and holding it.
No, but PSYCHOLOGY is the missing link. It's like a horse race. You
could buy a ticket at 10:00 on a horse that was 10:1, but if a whole
bunch of other people did the same, by the time the race starts at
11:00, maybe your ticket has been devalued to 3:1 for NO reason, other
than a bunch of others decided to take the same gamble as you did.
This is how the stock market works. The other day, someone falsely
leaked that Steve Jobs had a heart attack and Apple's stock plummeted.
People are gambling. Everyday people are gambling. It's no longer a
'safe' investment to ensure your money against inflation by buying
conservative [very diverse] mutual funds. It's regular, everyday
people (millions of them) in front of their computers buying and
selling trying to outguess others and speculate etc. and they aren't
cut out for that. In the long run, because the stock market is based
on the fact that 'we can raise a whole lot of money by taking a little
bit (for them, but not for the little guy investors) from each person
and then taking that HUGE bit and investing at a very low but
relatively safe return (for them, but not for the little guy).
But... when there is a bubble and the big guys who are taking all the
little people's money and investing it in NON-Safe return, risky
endeavours, you have a problem. And this problem has existed SINCE,
regular people thought that they should and were entitled to try and
live beyond, and not just beyond, but WELL beyond their means. And
this 'psychology' has been drummed into their heads for the past 20-30
years. It's a case of a good idea gone awry.
This morning I realized that living my life is increasingly becoming
very similar to being at a frat party and having the unfortunate luck
of not being drunk.
Good analogy. Maybe being there without a date would be worse, but I agree
that things are bad enough. Luckily, I've already taken Paul's advice to
buy
STUFF. (Isn't this the advice Bush gave to people in the US after 9/11? Go
out and shop?) Anyway, my basement is now full of eight-track tape
machines,
Sony Walkmans, and Chinese toasters. I feel much better now.
Make fun of it all you want, but Andreas' joke about the beer bottles
and the stock is all too true. In the end, I can sell garbage, but if
my stock is worth 0.00, i cannot sell it. Because it's just junk that
is absolutely useless to anyone.
p
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