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Impeach George Bush
What's Down With the Dow?
The most interesting part about our current recession is that it is happening amid a slow growth. In the economic terms of the 90's we have the opposite of stagflation, growthsession.
Source: TheTip, 2002-09-20
Candidate: Big Government
Driving our economy from the top-down has been the goal of our government since the inception of the Stock Market and Federal Reserve Banking System. But watching stock prices fall might make you think that even the big guys are loosing, but watch the money!
The real money entered the Stock Market in the 50's and 60's after the great recession and wars of the time. Since then, the stock market reached its all-time high in 2000. If you invested $100 in Coke in 1950, you'd be a multi-millionaire in coke-stock now due to splits and incrase in value of the stock. But a $100 was hard to come by back then.
The people who had the money to invest, the large investment banks such as Barclays, State Street, Carnegie Mellon and Citigroup did invest, and invest heavily. Those banks and their subsidiaries continue to own upwards of 60% of the stock in most of the companies of the Standard and Poor 500 (the leading indicator of the health of the market).
Now those banks are worth Billions - more than any government on earth. But it's hard to get your money out of the stock market. In order to sell a billion dollars worth of coke stock and maintain Coke's value, you've got to sell them pieces at a time, and every time you do, you make the price of the stock go down, devaluing the stock that you want to sell each time.
What we've been seeing today is the attempt by the investment banks to get their money out of the market slowly and methodicaly, attempting to cash-out on their now-mutli-billion-dollar investment.
But where does the money come from?
That's the sad part of the story. Some parts of the money come from mild competition between the banks, but for the most part, it comes from mutual fund buyers and sellers who are supposedly independant of the investment banks.
However, the same people who run the investment banks also run the major mutual funds.
So who gives the money to the banks as they cash out, the mutual funds. Where do the mutual funds get the money - their personal investors, you and me, our 401k's and IRA's and savings that are put trustingly into the hands of the CEO's to make their value grow.
But the CEO's don't control the prices of their stocks - neither do their profit and loss performance, instead, it's the market that controls the price of stock, and the market is controlled by the people with money.
Our research has indicated that approximately 60% of the total value of the market is in the hands of these top banks THEMSELVES. That is, on top of their mutual fund and investment branches, these investment banks have holdings of their own which, for the most part, control the market.
Barclays Bank Plc
FMR Corporation (Fidelity Management & Research Corp)
Capital Research and Management Company
State Seet Corporation
AXA Financial, Inc.
Wellington Management Company
Vanguard Group, Inc. (The)
Putnam Investment Management, Inc.
Massachusetts Financial Services Co - Other
Vanguard Index 500 Fund
Morgan Stanley
Mellon Bank, N.A.
Citigroup Inc.
JP Morgan Chase & Company
Dodge & Cox Inc
Janus Capital Management, LLC
Washington Mutual Investors Fund
Taunus Corporation
In addition to their institutional holdings, the major banks have their mutual fund holdings which account for approximately 20-30% of the overall holdings, the last 10-20% of the total S&P 500 index is owned by individuals, mostly leaders in the S&P companies themselves.
So looking at the market from the point of view of a major owner, they look at their investments as unliquid and therefore high-risk investments until they are able to take cash. Getting cash out, however, is hard to do since the only major buyers are other major banks and the mutual funds that those banks control. But the mutual funds are losing money and value rapidly as they buy on the downswings only to see the market fall lower and lower as the institutional side of the market continues its sell-off.
To make that plain and simple, the investment banks are taking their profits at the expense of their mutual fund businesses.
What to do, HEDGE. It's still possible to beat the big-boys in the market by hedging your long-term value investments with short-term SHORT-SELLING strategies. Or better yet, invest your money in yourself and your family, buy and keep property and hard-value assets such as small businesses and land.
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User Originated Comments:
From: ilonwulf
1999-11-30 00:00:00
war hurts investments and kills people
From: LLindauer
2004-02-25 00:00:00
you're so right. but if the bushies have anything
to say about it, working people will be compelled
to invest on the stock market rather than in real
property or small businesses by "privatising"
social security. beware.
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