One week ago on the 11th March 2013, it was reported by BBC World Business Report that the FTSE 100 Index had reached its highest level since the financial crisis of 2007. This means the market capitalization of the 100 highest valued listed companies on the London Stock Exchange have been valued at their highest by the stock markets since the crash.Sally Bundock pointed out that although the economy was stagnant, it seamed strange that activity in the stock markets, was far from being stagnant, it was a hive of activity.
It was a good point to make. Most of us are given the misconception by the media that the trading in the stock markets behaves in tandem with the economy.
This morning was the morning of the latest budget.......And where better to get an assessment on what the Chancellor should be doing for the economy....then asking the so called'analysts' and economists' of CMC Markets. Unfortunately for all the viewers who are interested in the economy and not so interested in what the BBC often refers to simply as "markets", the viewers are going to get little perspective of the economy from what is basically a spread betting business ! CMC Markets use investors money to gamble with on share prices but also in derivatives and a lot of other stock market trash........
The money CMC Markets uses belongs to people who have savings and investments..........who are currently not spending those savings on any thing else. To many of us then, who pay most of our money out for day to day living, for housing, utility bills, transport, education, if any thing left a holiday, what CMC Markets does with savings will seem fairly irrelevant.
.................As I have stated before in blog posts, what goes on in the stock markets is not a reflection on what is going on in the general economy...............This is entirely an illusion that people representing investment businesses, the 'economists' and 'analysts' like to portray..............All these people are doing is advertising their investment businesses through use of the BBC, CNBC, Bloomberg and the Financial press such as the Financial Times. By doing this they are promoting additional cash flowing into pension funds and all sorts of other investments. Some of what these businesses do creates jobs and helps the economy.........but I am afraid to say that there is another much bigger side to these businesses which creates unemployment, causes inflation in all kinds of industries and services including health services. They also add unnecessary debt to businesses which puts the businesses at risk. These investment businesses on the whole cause much more damage than the good they create......
But then, you may argue that even though you personally do not have investments because your income is already accounted for, you would still like to hear news of how other peoples' investments are benefiting the businesses and the economy.........You may be taken in by this information to think that you may benefit from the great things that these people (occasionally referred to as masters of the universe by various media) are doing with investors' money. Well if this was a program by the BBC, CNBC, Bloomberg or one of the many others, this may be the point at which if you are an ordinary viewer without investments you may want to switch off..... This is because all that CMC Markets and many others businesses like it do is not for our good................If you are one of the investors into these businesses you may want to throw the television through the window....about now...........
The truth behind all this support by the media for the stock markets I am afraid to say is biased towards the finance industry, for a number of reasons.......and not their to help you.
One is that governments benefit from the success of stock markets;
1.....To privatize state run industry and services.
Stock markets provide an endless stream of cash for governments to sell off utility services, health services which tax payers have already paid for. Also the stock markets provide a source of cash for genuine future investments which include infrastructure. Lots of politicians strangely find them selves on the boards of businesses when they become privatized. Stock markets also provide masses of debt for privatized businesses such as the cash that is currently wrecking U.K. National health trusts. Some of this debt may be paid to members of board. In short, governments can sell off industries and services that tax payers have paid for, so they can enrich themselves.
2......Owners of large media businesses such as Sky are owned by conglomerates, who's owners main business is actually the buying of businesses and then profiting from controlling the market (raising prices for media services). The owner of Sky then has a vested interest in the finance industry and benefits from the stock markets freedom to over value a business which has been burdened with debt, which many of these businesses have been. These media companies also do a good job of failing to mention the debt of listed companies whilst hyping them up on their so called 'business' bulletins. The problem is that the companies that own many TV companies are owned by conglomerates will have their values damaged if there is a negative influence on the stock markets.........Even if the influences happened to be absolutely genuine......And originated from an organisation that simply wanted to let investors know that what the stock markets did with their money had not been made clear to the investor...........Resulting in the investor wanting to withdraw their savings from the investment business the investor had entrusted their money to !
3......The presenters of any TV channel, or the journalists of a news paper will appear to be giving their own interpretation of a story, but as far as business and finance is concerned. This is far from the truth. Like any business, employees are expected to respect the owner of the business or who ever is paying the wages. Any one working in a shop will not be telling the customers that a product they are selling is rubbish, even when they know it is.......... This is much the same as Bloomberg, CNBC, BBC, and just about all other correspondence and journalism to do with business finance (Often wrongly referred to by these representatives as just 'Business'), telling us that the business finance world or the stock markets.... are flawed..........If you were to research the industry in depth as I have, you would know that the finance industry is flawed to a degree that could only be accurately described as flawed to a biblical level. But the presenters either don't know this, or more likely know, but turn a blind eye, because they know they would lose their jobs.......if they were to voice their real opinion on air.......It appears that the most common trick is to plead ignorance whilst 'analysts' and 'economists' waffle on to their hearts content !..........If you want to get real opinions on the business finance world, stock markets and goings on in multinational conglomerates you have to move away from from the main stream press and media. There have been probably 100 books on these subjects as well as the economic crisis since 2008. Quite a few have come out in recent months. (Unfortunately just about all magazines seem to follow main stream media.....They are clearly run by people who have a vested interest. Don't waste your money on any investment magazines !) Many books defend the finance world and everyone in it, choosing to blame the complexities of systems for problems. These are people who swear by the industry and have made their fortune from it (EG George Sorros). There are a few authors who are not so defensive of the industry. (Robert Peston) .You will see that the afore mentioned press and media organisations do not even scratch the surface of what really goes on in the business finance world. But don't blame the presenter or journalist.....you may some times get a sarcastic reference that things aren't making sence, but these people are careful not to give to much away....They are only acting on the instructions of the fat controller !
People need to know what happens to their invested money, and know when they are being misled.
So please share !
