Go, Economy!

[Yoshi]

My point is that you need to be careful setting thresholds for when a group no longer matters.

[Anthony]

Just to talk on an earlier point about the secondary market.

The primary purchasing of stocks has significantly increased value because the secondary market exists. It is difficult to imagine a situation where the reselling of your stocks were not allowed, but if that were the case at best the value would be the expected dividends of the stock until you die, rather than until the company dies. This doesn't take into account how the lack of liquidity would reduce the value of your purchases as well.

The only real solution down the road I see has to be globalization. As long as there is a situation where there are competitors to run to with your money/taxing situation/ect., it is difficult to put up any fair and meaningful taxing regulations.

[Diff-chan]

The problem with globalization to date, from a societal point of view, is its uneven benefits and the terrible job the government has done preparing people for the disruptions it has caused.

The idea before was like this, Joe works at a factory, factory moves to Mexico, Joe loses his job and factory owner gets an enormous increase in wealth. But then the factory owner is taxed at a higher rate and some of that money is used to retrain Joe and prep him for the next round of work. That hasn't happened, obviously. Instead the factory owner lobbies Congress for a tax break and sends the money to Switzerland. Joe gets hooked on meth and run over by a Wal-Mart big rig.

There are huge swathes of the Midwest absolutely, completely devastated by globalization - factory leaves town, replaced by Wal-Mart, which not just pays crap but puts the rest of the town out of business with cheap Chinese stuff.

So now economists are basically saying we just need to sit back and accept a lower standard of living until it all comes around back to the US. In the mean time, enjoy your cheap TVs that you can't afford anyway. I understand the benefits of globalization, but I also understand why it is a dirty word for lots of people.

[Some Stupid Japanese Name]

Remember when Walmart made a big deal about everything being made in America?

[Bojack]

This is already the case, since you can't really buy stock without going through a licensed broker.

CEOs aren't the only people who get equity awards of various types. As usual, you're hitting the middle class in your quest to punish the rich. I cannot, however, defend buying on the margin. There may be something I am missing completely, but it's usually associated with selling short, and hoping/betting on companies (to) fail doesn't seem healthy to me.

Just because there's a middle man playing bookie doesn't change the fact that people can go in and bet the farm on stupid and reckless shit. From Tulip-mania to dotcom burst the stock market itself is to blame for lots of destroyed wealth.

How many middle class people get the type of stock options upper level execs get? Employee buy in plans are not the same. I'm for employee re-investment because unlike upper level execs employees don't usually have gold parachutes or millions of bucks to retire on if it blows up. Employees and other middle class types generally can't then do insider type shenaninigans that go on. We do agree that short selling stock is just bad in aggregate for largely the same reasons.\

Just to talk on an earlier point about the secondary market.

The primary purchasing of stocks has significantly increased value because the secondary market exists. It is difficult to imagine a situation where the reselling of your stocks were not allowed, but if that were the case at best the value would be the expected dividends of the stock until you die, rather than until the company dies. This doesn't take into account how the lack of liquidity would reduce the value of your purchases as well.

The only real solution down the road I see has to be globalization. As long as there is a situation where there are competitors to run to with your money/taxing situation/ect., it is difficult to put up any fair and meaningful taxing regulations.

I don't think any one generally wants to see the 2ndary market destroyed. We should still do much more to keep it in check because of what happens. It's like, I don't want the rich "eaten" I just don't want them to abuse the system because of the fall out and unfair capital generation at the expense of others (think high volume trading to work some arbitrage).

[Anthony]

The problem with globalization to date, from a societal point of view, is its uneven benefits and the terrible job the government has done preparing people for the disruptions it has caused.

The idea before was like this, Joe works at a factory, factory moves to Mexico, Joe loses his job and factory owner gets an enormous increase in wealth. But then the factory owner is taxed at a higher rate and some of that money is used to retrain Joe and prep him for the next round of work. That hasn't happened, obviously. Instead the factory owner lobbies Congress for a tax break and sends the money to Switzerland. Joe gets hooked on meth and run over by a Wal-Mart big rig.

There are huge swathes of the Midwest absolutely, completely devastated by globalization - factory leaves town, replaced by Wal-Mart, which not just pays crap but puts the rest of the town out of business with cheap Chinese stuff.

So now economists are basically saying we just need to sit back and accept a lower standard of living until it all comes around back to the US. In the mean time, enjoy your cheap TVs that you can't afford anyway. I understand the benefits of globalization, but I also understand why it is a dirty word for lots of people.

I am talking long-long term solutions to these problems. Everything we do these days seems like a bandage over an issue.

By globalization I literally mean, every country adheres to the same tax rate for many things, working as one globalized government. Obviously this is completely unfeasible in today's world with dramatically different standards of living, but the future will hold a different light, and alot of these problems will be realistically solvable.

[Diff-chan]

In the long run we'll all be dead. What do you think could be done today?

I don't think any one generally wants to see the 2ndary market destroyed. We should still do much more to keep it in check because of what happens. It's like, I don't want the rich "eaten" I just don't want them to abuse the system because of the fall out and unfair capital generation at the expense of others (think high volume trading to work some arbitrage).

As much as HFT displeases me, there is something to be said about smoothing over mispricings, and the best way to do that is to make it hurt by hitting people in the wallet. It makes for a more efficient market overall.

[Razor Ramon]

Anarchy.

[Anthony]

In the long run we'll all be dead. What do you think could be done today?

Eh, I just found the ultimate way the market works out to be more interesting. It's nice to know that in the future these issues we face will likely be basically solved.

I would need way way more data than I have ever bothered to look at to determine where a good equilibrium of the various taxes and regulations lies in today's world. At my current level of information, it would really just be shooting in the dark.

[Yoshi]

How many middle class people get the type of stock options upper level execs get? Employee buy in plans are not the same. I'm for employee re-investment because unlike upper level execs employees don't usually have gold parachutes or millions of bucks to retire on if it blows up. Employees and other middle class types generally can't then do insider type shenaninigans that go on.

I don't know how many, but it's not none. And some are actual stock awards, not options, which are far better.