The Tyranny of the Institutional Investor
The modern investment landscape is dominated by a troubling reality — a staggering 89% of all equities and stocks are owned by institutional investors and the ultra-wealthy elite. This concentration of financial power in the hands of a privileged few poses a grave threat to the principles of a fair and democratic market.
These large institutional players, such as pension funds, hedge funds, and asset management firms, do not invest with the same motivations as the average individual investor. Their primary concern is not the long-term health and prosperity of the companies they invest in, but rather the short-term maximization of returns to satisfy their own stakeholders
uh you'd think a pension fund would be a bit more interested in longer-term stability.
It’s a similar situation as with regulatory capture: the high level commissioners/managers get woo’d and lobbied by “alternative investment” financial firms to invest in high risk/high fee funds. On the flip side, those managers often end up getting hired by said firms, both as a payback for the investments, but also because they’re connected to other pension fund managers and can turn around and lobby them. If you want a deeper dive, Naked Capitalism has a long-running series of articles on the corruption and mismanagement at calPERS (the California state public employees’ pension fund agency).
Also, a lot of small investors hold their assets through institutions.
Perhaps I am not enough of a tankie, but in a fully equal world, I would expect these institutions, especially pension funds, to hold 100% of equities.
Every family would be middle class.
A young, starting family would have a mortgage and zero investments.
An old family would have a paid off house and a retirement account filled with a diverse set of stocks and bonds. The total value would be more than a million, making everyone a millionaire over time.
there is no need for pension funds. retired people can be paid a fixed income by the Government adjusted for inflation (they used to do that in many countries before 2000s). in fact, the 'pension funds must invest in stock market' is a very neoliberal thing, its a way in which capitalists can use worker savings to get rich.
there is nothing productive about moving money around. the government can any time mobilize workers and resources needed without the need of stocks or bonds. stocks/bonds are supposed to be a way to funnel private sector wealth to most 'productive' uses. of course, under capitalism it ends up being a casino.
I could see a scenario where the “stocks” exist purely as a way to divvy up shareholder votes but without a financialized aspect. Of course, shareholders in this case would mean the mix of workers of the firm/institution/corpoation/whatever you want to call it, federal democratic will, local democratic will, particularly affected groups, environmental advocates, etc., not bourgeois investors. Those shareholders then select the equivalent of board members who select the equivalent of a chief executive officer (although in a socialist society I would think the title would be something more like “chief organizational director”, idk semantics aren’t the point). That way there’s public control over the means of production but not in a direct bureaucratic control way like you get with existent government agencies.
cooperatives yea. in that case, stocks are reduced to shared ownership certificates (only valid as long the person works in the co-op)
why would there be a stock market in a classless moneyless society?
its exact same as paying taxes for pensions, only now its workers paying taxes at point of production for their firm (so called profit), how is it any better?
Because we hold our assets through institutions, which in turn get their assets from fund managers, the fund managers get 100% control of publicly traded companies, and we who provide the capital from our savings get none of it. That is one issue.
i think it was an episode of Who Makes Cents when they mentioned some historical event long before the so-called "Investors Democracy"--where the media sold americans on the notion that middle class investors, by hooking themselves into the stock market, could have a piece of the pie--when the stock market bell ringing ceremony was celebrating X number of years. so, basically, back when the casino had no pretenses... for the ceremony, the organizers brought a taxidermy bear, a live bull, and a sheep onto the floor of the stock market.
each animal was meant to represent the archetypal investor: the risk-averse bear, the charging bull... and the middle class investor who was, by design, ALWAYS the loser that got torn apart in the struggle, fattening the bull and the bear with its carcass.
this event has been memory holed and stats about "who owns equities and securities" are dismissed behind curtains of privacy. indeed, most middle class investors use institutional investors to do so, but the investigation always stops there. what percentage of those holdings belong to "small/middle class investors"? anyone that can accurately conceptualize Jeff Bezos net worth knows.
This riggs the market. Lack of diverse thought, motives, ability to maintain proper checks and balances. You could have a great company that performs,s well, but if the top 10% feel you are a threat or don't want you (MJ stocks ahem) then they can leverage and sink you.
Growing balance sheet, sinking stock and layoffs. Makes no sense any more. I used to be able to read technicals well enough to profit off it and now it is no longer possible. Even finding just plain boring flat dividend stocks hard to find. They'll just sweep call and poof gone! Company had a great year posting great returns? Looks like a short spree! Shorts should be illegal. America doesn't like your developing country developing? Shorted! DELISTED!
So now my investing dollars are going to CDs and physical assets. Fuck the stock market. Crash hard and take the top 10% with you.
The inherent monopolizing forces of capitalism just working as intended
This is why Americans don’t agree when the government says the economy is doing great. They need different measuring techniques.
