Who Runs The Market       

( this is maybe a last post of inland. on next i wish i will deal with my passport smoothly, will go abroad smoothly, will settle down smoothly --- then, just by then i will continue this BLOG, maybe i also can update every two months or unregularly about my actual life )

        Last post, will without "Mind Control" .... Everyone has a model about the earth world which runs best, me too. Here I want to talk about a popular topic --- "Economy", a current problem as similar as that "Mind Control problem" connects a basic human faith --- "Freedom". The free market, the free world and the free human --- Do we still need or not ?

        We all know the financial crisis throught whole the world, and the US Treasury secretary, HENRY PAULSON, had opened the government checkbook and was poised to spend $700 billion try to end it.

        Maybe as truth as the US govt said, "this is not a action that we want to take, and a action we need to take", but I am still doubtful of feasibility and equitableness about the bailout.

FEASIBILITY:
[1] Is it effectual ?
[2] Is it the best action ?

EQUITABLENESS:
[1] Is it a right stamp that govt as a rules-maker, a judge and a player in same a market to churn up ?
[2] Do not those CEOs should answer for their market sense of the day ?
[3] Is it fair to others, to all taxpayer ?
 

        Now lots lots people take about the "Market Confidence", include govt officers, public economists, media practitioners and so on. But, what is the real meaning of "Market Confidence" they talked about ?

        If their meaning is the expected return of listed companies will be steady or no more risk in current condition, I think it will easy to fix it, not only the words but also the action .... maybe govt can make some temporary policies to raise market confidence. e.g. allow the good listed companies share phase profit once a season temporarily .... so I don't believe the market will still be less the confidence !

        If their meaning is everyone come back to intertwist raise the price together, so I guess soon these guys will play other a new game --- "who runs away first at right time ?".

        Talk in deep, I don't understand why the "push hand" of stockmarket, a "invisible hand" of classical Economics, would be led by "expected message" but original "expected return" ? .... and the P/E ratio just shows a paper profit of the listed companies, not a dividend.

        Of course some rules in constitution of listed companies are made that the listed companies "may" share profit 30 percent or other ratio to investors, but seems "must" pass throught the company directorate .... so the years ago in China stockmarket lots lots listed companies didn't share dividend to investors, or in stead of issuing A Shares Rights. And then the stockmarket administrant reenacted a new rule that the listed companies would be suspended if it didn't share any dividend in 3 years.

        Thinking me personal, a non-dividend stockmarket is a gambling market, and a stockmarket which the total sharing dividend less than the trade tax of current period is also a gambling market.

        In this financial crisis, specially stockmarket crisis, is the bailout effectual ? I don't think so.
http://tanweekly.blogspot.com/2008/07/unwillingly-share-my-plan-and-sense.html
As my embryo theory --- "Fund to Fund" model theory in stockmarket --- of last post "Unwillingly Share My Plan and Sense", I have wrote:

"Of the gambling stockmarket, there are only two types of investors, "the prices maker" and "the prices waitor". Retail investors usually are "the prices waitors", price is not alive itself, "the prices maker" control the prices .... "the prices maker" have nature right to operate the prices down, based on that they let "the prices waitor" getting a free sail while pushing the prices up; "the prices waitor" have nature risk to uncontrol the prices, based on that they get easy money just for waiting .... "

"It should be sure that earning money of the down-dominated will be easier than the up-dominated, if all the funds are rational, professional, and no wrong operation, the down-dominated will suck dry the up-dominated."

        So, perhaps the fund of govt original plan will be lost and drag down the most society resource in the future of a long time.

        In fact the stockmarket was bubbled long ago, since it was led by "expected message" in stead of original "expected return".

        Lots of messages jazz up the price and overdraw the future.
        Now it is time to pay back !!!

        Some words of mine before talked about the "intervened" free market, and listed 3 disadvantages of the Market Systemizing Self. the link bellow: http://tanweekly.blogspot.com/2006_08_01_archive.html

        Some words in this article were easy to get a wrong impression, that I agree govt to intervene the free market directly.

        But, this is not my own real meaning !!!

        My original meaning is --- on the present day the govt should focus the free market in a different light, find out deficiencies and fix it, just like the original theorist made some market rules from pure business condition at that age .... of course throught the basic market principles to get some new market rules.

        Now business developing, something changes, but most govts still be limited of pure market rules. They make themselves easy and let some companies face more difficult condition on their own. They said this "is" free market.

        I don't think so. I think "Free market" is not dead, it is alive. It also wants to develop.

        Maybe it is the time to create a "society types" market operating rules. e.g. the "temporary risk coverage in business" if the company or chief is threatened by terrorist .... The serving angle is business self not penal crime .... If govt cant get some helps or make a standard and open special market ways to these companies and persons, then they will make a difficult choice at a critical time ,,, so, this will not noly be a problem about market, but also a problem about country, even about things of God and Evil.

        And I think insurance business is a good case about using market rules to deal with those society things.

        Back to reality, maybe as truth as the US govt said if let those listed companies and CEOs keep on by free market rules, it will cover lots of people in many ways .... but I think this kind case also be showed in law:

Someone should be punished in violation of the law, but for several reasons doing it will make a impact to his family and around (e.g. he is single and get a child under age). So the judge could get a special paper to free him some hours a week playing with his child.

        Remember, all of it should be under the punishment, also mean a man should pay for his action ....
       (at last section I will make a summary of some ways this article touched of dealing with the crisis. Here pass over first)

        By the way, recently there is also a bailout making a large noise of Chinese stockmarket to talk about. Seems it wants to be imitative of America. But they are different .... these kinds plan has long been made .... years ago when state-owned banks became commercial banks, those original bad capital have used state finance .... and months ago a typical case happened of using state finance subsidies. the listed company Sinopec has been gotten RMB 33.402 billion of state finance subsidies just to fill the hole of half year company loss ....

the news "Chinese petrochemical: relying on subsidies from the loss". its Chinese link: http://business.sohu.com/20080826/n259208705.shtml

        Take your eyes, it is pure state finance subsidies, "No Certain Back"!!! .... This large company is a public company. So how unfair to other listed companies and all of the taxpayer.

BASIC PREMISS:
[1] Common Understanding that anyone should pay for his action.
[2] Common Understanding that the stockmarket was bubbled. (and no back way to hope now)

TERMINATING CRISIS:
[1] About action, reference with the law case above, it shows that "Detail Control" is important to reach the whole society benefit. So maybe "dividable" and "controllable" are good. And remember that all of it should be under the punishment, or let those companies or guys pay back first.

[2] Since we can't let those market companies running its own self path because of it covering lots of people and other fields in many ways, we should not put more resource on those listed companies ,,, It will be alogical, and a plan "let those companies up first then other fields will be better" is absurd and trick ( any capital can bring market, even make a joke if someone put more capital on me I guess I will make a "T-man market" base on my academic words and gambling rates of something, maybe words, content, "Mind Control", my pure maths problem "T-Man Conjecture" or others .... )

[3] Maybe govt allow the good listed companies share phase profit once a season temporarily to raise market confidence, of course it should change some accounting principles .... effect: it will let the market led by "expected return", but "expected message".

[4] Let the investors, specially Retail investors, to clear know the basic specific risk of stockmarket. On the "speculative" market they earn money just from prices changing, and the Retail investors can't control it, they just waiting. So if Retail investors want to get a easy money this risk they have to take .... effect: of course the prices will be back closer to real value.

[5] Attach other standard "Society Employment Emergency Preplan".

        Who runs the market ? the govt, listed companies, those CEOs, lots of message, companies share return, Retail investors, all kinds Fund ,,, and so on, this maybe became a problem, but it is not a question this artice want to answer.

        Seems the share return closer, but if the company get a destruct by man or terrorist, has it still been ? So, who runs the market ? or the market runs normal by what ? I don't give a certain answer.

        But I am sure, "Freedom" --- The free market, the free world and the free human ....  it is the right way to understand.

        (show more my point, if we not only let ourselves free but also others, or say more earthly let everyone "feel" free, then the market will run well.)

         tanweekly
Aug 1st, 2008 Shenzhen

my English BLOG  http://tanweekly.blogspot.com
my Chinese web site http://www.bailingren.com

 我的其他部分英文BLOG文章的本站点镜像:

 "Mind Control" --- modern technology or unknown world ?

Of Humankind, Is The Crisis Coming ? 

[ Message ]   I am back

Unwillingly Share My Plan and Sense

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