OK, I'll play devil's advocate. The stock market provides a liquid secondary market for stock issues, thereby facilitating the ability of firms to raise capital for new investment, among other misadventures.
I'd say it is also a machine for redistributing wealth from hapless middle class savers to the very wealthy. On Mon, Apr 27, 2009 at 10:26 AM, Jim Devine <[email protected]> wrote: > the stock market gives gamblers a place to go that's more > legitimate-sounding than Las Vegas. More seriously, the stock market > likely does not exist because it serves some purpose. Rather, it > exists largely because it's existed in the past and it would be costly > to get rid of, evoking all sorts of political resistance. > > On Mon, Apr 27, 2009 at 7:08 AM, Bill Lear <[email protected]> wrote: >> I should know the answer to this, but the general purpose of the >> stock market is clearly not to raise new capital for businesses. >> >> What broader economic purpose does it serve? >> >> I've heard that stock price can be used to leverage loans for a >> company, and therefore it is an indirect means of raising finance, but >> this seems exceptionally dubious, as I would assume stock price is the >> last thing a lender would look at and would instead look at standard >> "balance-sheet" things (EBIDTA, existing debt, etc.). I this roughly >> correct? >> >> >> Bill >> _______________________________________________ >> pen-l mailing list >> [email protected] >> https://lists.csuchico.edu/mailman/listinfo/pen-l >> > > > > -- > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
