File spoon-archives/marxism.archive/marxism_1994/94-08-28.000, message 138


Date: Thu, 25 Aug 1994 21:36:43 -0500 (EST)
From: wesley david cecil <wcecil-AT-indiana.edu>
Subject: Re: schumpeter help


I would agree that it only prevents "minor" meltdowns but it also makes 
the market seem perpetualy attractive to investors thus extending its 
power and making the government increasingly invested in preventing a 
major meltdown. This probably won't work forever, but it just may work 
for a long long time.  Such government investment in the stockmarket 
becomes even more of a stablizing factor as the stocks and bonds markets 
become more intricately attached, and bonds are carefully controlled to 
avoid any big shifts -- particularly in longterm rates -- as a big move 
in teh bond market is what would really destroy the economic infrastructure.
Wes

On Fri, 26 Aug 1994 Steve.Keen-AT-unsw.edu.au wrote:

> Re Wes' comment on stock market stability--the fact that trading has
> to stop 70 points down in one day doesn;t mean that the next morning it
> has to resume at the same point! Moves like that prevent mini-meltdowns,
> but I think we will find--when the speculators give us a re-run of 1987--
> that "the day after" will be even more calat (typo) calamatous than
> Black Friday--wn when shares fell 20% on one day.
> 
> Cheers,
> Steve Keen
> 


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