[ExI] Sudden outbreak of democracy baffles US pundits

[Samantha Atkins]

On Oct 7, 2008, at 5:59 AM, Stathis Papaioannou wrote:

> 2008/10/7 The Avantguardian <avantguardian2020 at yahoo.com>:
>
>> I just wanted to clarify that I am not suggesting one buy just  
>> *any* stock. Think about companies that produce goods or services  
>> that you think that even broke people will need, check their  
>> balance sheets, and ask yourself if you trust their management  
>> team. The first rule of any market place is "buyer beware".
>
> Actually, this advice ignores the way the market is supposed to
> function. Since everyone has access to the same information, the "bad"
> companies will be discounted and the "good" companies will have a
> premium,

Not any more.  The government rewires the signals as it pleases  
supposedly for our own good.  The signals haven't been dependable  
since long before this crisis.   They are becoming less dependable by  
the hour.

> so that the expected gain remains equal. If there were a
> discrepancy, and a stock was seen as particularly bad value or
> particularly good value, the market would very quickly adjust the
> price to reflect this. The only way to beat the market is to have
> special information. This is why professional fund managers don't do
> any better at picking stocks than someone who chooses at random.
>

The government decrees what the price shall be of late.  When they  
dismantled the downside signals (shorts) there was an artificial  
positive spin that further distorts markets.  Governments are  
attempting to hide from the people just how long we have been fed  
financial fairy tales and what the truth is.  This will only make the  
inescapable emergence of the truth much more painful than it would  
otherwise have been.

- samantha