[Ask the Gulch] Is the stock market dive a purposely engineered last desperate action to influence the elections?
Posted by DrZarkov99 5 years, 6 months ago to Ask the Gulch
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I think Wall St manipulates the market for their own profit. They still control government via corruption regardless of which party is in control and Trump hasn't given Wall St. much reason for concern so far. In fact, a partial housecleaning of some significant members of both parties would probably distract attention from the puppeteers.
I wouldn't put it past the Dems to make promises to return to power though.
imo, the market has been overbought for several years and is overdue for a significant pullback. Interest rates are going up and Wall St is ready to profit.
I have been paying more attention to politics lately, so have only seen some possible major developments:
Central banks, especially The Fed, which I firmly oppose, throws a major wrench into the analysis. If, as I have heard, they are going to finally let interest rates rise, and even the market expectation of a rise, could easily cause the stock market to do what it’s doing.
And I have seen Trump complaining loudly against that: “I like low interest rates.” Grrr.
In my very tentative opinion, and I don’t even know the current Fed chairman, he would be the only likely person who, if anti-Trump, might do this, “intentionally”. I doubt that. As he can’t do it on his own.
OTOH, rates have been artificially much, much too low for years. They have to rise. We could be nearing the peak of what Mises call the “crackup-boom”. Not good.
The stock market is subjected to a wide variety of influences, including manipulative billionaire traitors who dream of global socialism and may not all be named George.
And the best thing is, the investor gets to choose which stocks they want to invest in. Or NOTA.
Compare that with “investing” into a system of progressive taxation.
The only "return" investors get on most stocks now available (non-dividend stocks) is if they sell the stock to someone else who hopes that very same stock price keeps going up so they, too, can profit. It's a game of pure speculation like roulette - and you have to know when to walk away. The other detrimental part of this methodology is that if one pays one's executives with stock options, those executives become incentivized to hide anything that might bring the stock price down and devalue those options (until they vest), while at the same time they are rewarded with hyperbolic claims about future growth, etc. See Elon Musk. It is a short-term mentality all about taking quick advantage of momentary gains.
Compare that to a stock which pays dividends. The investor gets some return regardless of the stock price - a return which is predicated on the profitable function of that company during the previous quarter or year. Investors are rewarded through their continued investment in the company AND its profitable function. Add to that that stock options offered as part of executive bonus plans then become a long-term incentive, executives are much more likely to address problems rather than put them off, engage in long-term relationships with customers, suppliers, and partners, and employees know that the focus of the company will enable them to actually build a career. (HP used to be this way.)
"Compare that with “investing” into a system of progressive taxation."
Not sure how that ties to the stock market in any way. Besides that, the only people who invest in taxation are big government elitists hoping to be in control.
The point that I am making is that non-dividend paying stocks are not an investment. They are purely speculative ventures and the only way the speculator gains is when someone else loses. In a real investment, both parties gain when the investment pans out but there is no loss required for that gain to be realized.
Also, if you use leftist think, then when a stockholder gets a dividend, the workers are losing money they should’ve been paid. They are all losers, being oppressed, and must rise up in anger to break their chains, as well as a bunch of other things.
I'm not denying any of that. Like most of the world, you've been conditioned to think solely in terms of stock price as the "value" of a company - rather than its balance sheet. I remember a time when stocks which didn't pay dividends were just coming on the scene. (Microsoft was one of the first.) Stocks would accurately reflect the true production value of a company - not their speculative value. Price-to-Earnings ratios meant something, as did a host of other financial indicators (debt-to-equity, etc.) Now the only thing that matters is the PR campaigns which either tout the hype or downplay it - depending on the issue. No talk at all of actual profitability. (Again - Tesla!)
Case in point: Amazon recently topped a billion dollars in stock value. Yet Amazon's day-to-day loses money. Facebook hasn't turned a profit in years yet still enjoys robust "value" - at least until it was discovered that they were covering up egregious ethical violations. Apple - if considered based on their product offerings alone - isn't worth the billion they are at either. One can go down the entire list of companies included in the major indices such as the Dow and see a disturbing trend of over-leveraged companies. They operate only one PR fiasco away from insolvency.
'Also, if you use leftist think,"
Don't make my head hurt. There's no reason a company can't have both dividends and a profit-sharing program. Then you benefit both your employees and your investors - and doubly so if your employees are also investors. It's the best of both worlds IMHO. Hewlett-Packard used to be this way. I used to work for them when it was, and you couldn't find more dedicated employees. After they changed their policies and killed many of the employee- and investor-appreciation programs, most of the dedication went out the door as well. Now they are just a glorified consumer electronics manufacturer where they used to be the premier tech research company in the world.