From a macroeconomic point of view, although the Sarbanes-Oxley Act is an obvious crucial improvement in the stock exchange to protect investors from Wall Street’s hooligans (Valof and Menard 8), the various anomalies in NYSE including the short-selling techniques of analysts, Dick Grasso’s gargantuan pay and the Merill Lynch Rule (Kitces) among others can not simply be set aside. The stock market has become an indispensable tool in the financial system of America and other trading countries.
It holds more than $30 trillion worth of investments. As Richard Benson of the Specialty Finance Group Reports, the current financial system of USA supports more than $2 Trillion of mortgages ”directly financed at 1 percent with Fed Funds and REPO… including banks, Wall Street, the GSEs and hedge funds, puts total leveraged finance closer to $10 Trillion”. Many rich investors and brokers use the stock market to pursue their enterprise. Through it, sums of money can be earned in a matter of seconds.
Millions of people also can get rich and millions also can get poor. In a nutshell, the stock market is a place for luck for the risk-takers and where the trading company stocks and its derivatives take place. However, as grand and beautiful as investing in the stock market may seem, an unwary investing sheep may just find himself in total oblivion once he mortgages his house and pension fund for precious stocks which price deflated and then inflated to ten times fold but deflated again to hundred times overnight before he could sell it to others.
The stock analyst will then recommend to the investor to sell his stocks off before its value becomes close to nil (note: the price is now even lower than the first price whence it was offered to the hapless investor). In fact, that exactly what happened to many American Wall Street investors who lost more than $600 Billion just this 27th of February (Wall Street Scam). It surely is not really all about bad luck. Quoting from an online source:
“As with so many elements of our American way of life, such as the federal and state governments, the stock market is an essential, positive ingredient in its essence, and has become deleterious only because certain rapacious people have taken control of it and twisted it to their purpose. The latest chapter in the Wall Street scam is the attempt by these same wealth-crazed people to try to convince American workers that they should put their retirement savings in the stock market. The pressure for this insanity is coming from the White House, Congress, the “Federal” Reserve, and anyone else for sale by these monetary rulers.
” (Wall Street Scam) Market contingencies and downfalls are not anymore new in Wall Street’s history. Among the first and worst ever recorded was in October 23, 1929 when the market went down by 31 points (History of Wall Street). In the succeeding days, it further went down to additional 49 points until the market totally fell apart on the 24th of October. It was said that the market crash of 1929 even caused some brokers and investors to jump “out of their office windows” (History of Wall Street). The said market crash brought economic collapse and depression to US’ economy and was felt even decades after.
The succeeding large Wall Street crash was recorded in October 19, 1987 and was called as the “Black Monday” (History of Wall Street). During that day, the Dow Jones plummeted to 508 points having it recorded as the biggest one-day stock loss in US stock market’s history. After the event, stock market insiders tried to cape the event by telling that there were just some technical problems in the computerized trading scheme. But it could not have been clearly so, given the concurrent instances where the same group of people maneuvered the stock prices for their own profit amid the stock market’s sudden stagnation.