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Visualizing The Slow Death Of The Listed Equity Market
Stock markets worldwide are faced with the same issue of declines in listings that surfaced in the U.S. a decade and a half ago. The reasons for the contagious collapse in publicly listed entities is unclear (increasing acquisitions, LBOs, filing for bankruptcy, and declines in IPO volumes) but as Bloomberg reports, "the decline in public equities is unquestionable and should be of grave concern to both investors and policy makers alike," CFA Institutes' Jason Voss noted adding - crucially, "having fewer listings may hamper asset allocation, make stocks too expensive and send improper signals to companies looking to go public."
European markets listed the most stocks in 2007, when a bull market ended. The total fell 23 percent during the next five years.
Asia-Pacific listings peaked in 2010, and last year’s figure was 4.7 percent lower.
Stock listings in the U.S. reached their highest total in 1997, in the midst of a bull market fueled by demand for shares of Internet companies. Last year’s figure was 47 percent lower than the record.
Source: Bloomberg
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Crony Capitalism
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Winners take all
Dateline, New York
October 13, 2013
Introducing the New and Improved S&P 500 Index
Today S&P a major world class entity specializing in the delivery of equity, fixed income and foreign exchange benchmarks as well as a wolrd class respected leader in the global ratings businesses, is pleased to announce the newest updated iteration of the Standard and Poors 500 Index.
Effective Monday October 14, 2013, the Index (S&P500) will be comprised of the only 500 outstanding shares of Standard & Poors Co, Inc, of New York.
Should you have any questions or comments, keep them to yourselves.
deal with it
In the United States, total stock listings hit a peak of 9,253 in 1997 and has since declined to 4,916 at the end of 2012 — down, as the article states, by 46.9%.
Since 1997, the M2 Money Supply has increased from $4 trillion to almost $11 trillion. Even assuming less % dollars being allocated to equities from the money supply, we have more than twice as many dollars chasing half as many listings.
http://m.research.stlouisfed.org/fred/series.php?sid=M2&show=chart&range...
More evidence the stock market is up from unfettered money printing.
(off topic)
I just realized something while looking at that fed data site you posted, tomorrow at work I am going to show a friend that the Federal Reserve web site is still up and running while most gov web sites are closed. Why will I show him this? Because he refuses to believe me when I tell him that the Federal Reserve Bank is a private bank and is NOT a government agency/institution. He still wont believe me though. (sigh)
Then quit trying to expalin shit to him...
this is great news.
you really only need a few listings.
1. high growth high yield
2. conservative
3. green
4. moral/ethical/conscience-driven
5. emerging market
6. 25-year horizon
7. 35-year horizon
8. liquid account for immediate withdrawals
9. technology
10. financial
11. defense
12. local
13. minority and woman-owned
14. commodity
15. real estate
I think everyone has pretty much converged on these, with maybe a couple more according to personal taste.
otherwise, people mainly just buy art.
Good luck with that. He'll immediately point out that their website ends with .gov
Then you'll feel like shooting yourself in the head.
Don't argue with idiots. Wastes your time and theirs.
Crony Capitalism
Store: Welcome to ABC Store, did you find everything today?
Me: Yes
Store: Do you have your rewards card with you? If you don’t, just tell me your phone number.
Me: Sorry, don’t have a rewards card.
Store: It only takes a few minutes to apply.
Me: No thank you.
Store: But you can save on the purchases made today & earn points.
Me: Points? Such as a digital coupon?
Store: Well, yes. Can I sign you up?
Me: Hmm, why don’t I get the same subsidized savings as your reward card holder? Is it because I have to give you my personal information to save a few cents?
Store: I can use our store rewards card if you like.
Me: Thank you
Store: That comes to $10.53, debit or credit?
Me: Hands clerk a twenty dollar bill.
Eventually there will only be a handful of massive companies left, and therefore a handful of stocks. If the index of those stocks goes up every year, no one will care.
The real money is in options, swaps and derivatives!
Seriously, if you owned a growing company would you want to go through the Goldman rectal probe to take your company public (plus all the federal regulations that have to be complied with)? That would be about the LAST way I would go looking for capital.
More and more liquidity (thank you, central banks) chasing an ever-smaller pool of investable assets=misallocated capital.
The problem is not the drop in number of companies, but rather the drop in volume on the listed exchanges, as volume moves to the dark pools and derivatives, along with investors and institutions fleeing the 'listed casinos'
shumer is shitting a pickle.
But we make up for it with listing ETFs of various flavors based on the survivors. What can go wrong??
Goddam Suckers rubbing their hands with glee getting their hands on Royal Mail IPO!
Even Thatcher didn't want to sell the mail off...!!
Liberalism is at work limiting supply through all means necessary.
Is this really a story! Yah, just think of how terrible the world would be if companies were privately held and run. Wouldn't that be terrible!! What a joke. Wall Street is the ONLY real estate in the US that needs to be concerned about this since they scalp all transactions of the productive class. Let the market die and it will drive people to focus on true savings and investment. We'll all be better off.
Socialists don't list stocks.
Bernanke's printing press doesn't list stocks.
Institutions don't buy stocks, they buy triple-dipped derivatives based on the phases of Uranus cuz that's what Goldman says is the hot deal.
Hey no worries just have faster HFT making phony 100 share bids over and over, All sing "That's Entertainment"!!!
Private equity will grow and soon own ALL reputable firms. The "markets" are broken... corrupted. Firms know it; investors know it. Publicly-traded stocks willl be soon be only sketchy OTC stocks. All reputable firms will become private equity owned as the shift continues away from the increasingly obvious corruption of the public-markets. Mark my words.
Do private companies have to put up with the onerous "Sorbanes-Oxley" crap? (didn't think so!) Did "Sorbanes-Oxley" put Jon Corzine in jail? Don't think so.
Qui Bono?
And to add insult to injury volume is drying up. This spells trouble for short term traders and brokers (less trading, fewer commissions) as trading candidates with decent liquidity are relentlessly disappearing.