I am not arguing against capital markets per se. I accept that they have a role. I accept that limited trading to provide liquidity for second-hand asset trades is necessary, given the way in which traded securities are issued and redeemed. However, the vast majority of trades in the vast majority of financial markets do not take place to provide finance for anything related to productive activity. They exist to extract speculative profit, and that is a burden on society at large, in my opinion, representing a vast waste of energy, resources and talent for no net gain, whilst creating considerable risk for society at large.
Because the speculative froth is what transfers risk.
Funding the Future and Richard Murphy exist to extract grants, donations and research funding from gullible charities, NGOs, academic institutions and his camp-follower commentators, and that is a burden on society at large, in my opinion, representing a waste of energy and resources for no net gain, whilst creating considerable risk for society at large.
The easiest way to counter his argument is to point out that he’s talking about something that doesn’t exist. Markets. They’re a process not a thing, so all you’re looking at is the process. The individual trades are all the decision of individuals. All for their own reasons. Is he claiming he knows the reason for every individual trade? Clever man if he does. He should start trading & make a fortune.
They exist to extract speculative profit, and that is a burden on society at large,
That is idiocy on an industrial scale. Stock markets are a zero sum game. The money that was invested in companies by share purchase is gone & no longer exists. It was spent by the companies. The speculative profit comes from other traders in the market. Every penny that is received by a trader selling shares comes from traders buying those shares. They do not come from the “market” or “society at large”.
This is one of those observations where the conclusion doesn’t seem to ensue – is he calling for any trading deemed ‘speculative’ to be banned? How would this work- or is it as usual utter bollocks masquerading as wish fulfilment? How on earth is his activity – which consists of apologising for racism and anti- semitism, fomenting evil and calling for all resources to be confiscated by the state in any way ‘useful to society’ – sadly the Editor is channelling Russ Abbot and we can’t call for anything to happen to the cretin but certainly he offers nothing of any use to society at large.
Our host is right about the market being a risk trading venue. Being recently retired, I have been trading risky tech stocks for dividend paying stocks. The traders doing short term trades help this along by providing the necessary liquidity in the market and narrowing the margins of the brokers.
Remember that stocks are not valueless pieces of paper after the company sells them to raise capital. They represent a claim on the capital and income of that company. They also represent the ownership of the company. See Elon Musk and Twitter for how that works.
I/we invest, they speculate. Irregular verb again
BraveFart said:
“Richard Murphy … representing a waste of energy and resources for no net gain”
Good point. But he complained that the Stock Market is “a vast waste of energy, resources and talent for no net gain” – at least he isn’t wasting any talent (unless he’s really good at making model railways).
It’s increasingly difficult to distinguish Ritchie from the strutting, bombastic Mussolini.
I feel sure he keeps a braided uniform in his attic, and dresses up when his wife is out shopping.
He really seems to have it in for the stock market recently. I wonder if he bought some shares and they plummeted in value.