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(Marketwatch)   An SEC advisory panel recommends making a stock exchange for only the rich because investments by everyday people are making their money smell like the inside of a ten-year-old Toyota Corolla   (marketwatch.com ) divider line 31
    More: Asinine, Securities and Exchange Commission, NYSE Euronext, angel investors, retail investor, capital formation, publicly traded company, investment decisions, NASDAQ OMX Group  
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2433 clicks; posted to Business » on 04 Feb 2013 at 11:50 AM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



31 Comments   (+0 »)
   
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2013-02-04 11:31:05 AM  
well we can't have the peasants thinking they can actually climb outta debt.
 
2013-02-04 11:59:20 AM  
2.bp.blogspot.com
I'll bet you one dollar that idea won't get off the ground.
After all, we can't be stealing from other rich people, can we now?
 
2013-02-04 11:59:24 AM  
This is bullshiat.  At least there will be no mistakes made when the pitchfork brigade enters the premises and begins the stabfest.
 
2013-02-04 11:59:40 AM  
Land of Opportunity (tm)!! *

/*offer not available in all areas, void where prohibited
 
2013-02-04 12:06:59 PM  
*rtfa*

Interesting, though, that of the 20 people in the panel, they don't mention ONE big-shot bank executive of megacorp CEO.  They seem to be predominantly from small banks, government and angel investors.

Hmm.
 
2013-02-04 12:11:47 PM  
What will happen to the "We must tax capital gains at a pittance level so that oldsters and widows and orphans living off investments won't be taxed to death" argument then? They might be forced to admit that it's just another way to let the rich out of paying their taxes.
 
2013-02-04 12:15:21 PM  
This is already in place. It is called the limited partnership and private equity markets.
 
2013-02-04 12:19:25 PM  

jso2897: What will happen to the "We must tax capital gains at a pittance level so that oldsters and widows and orphans living off investments won't be taxed to death" argument then? They might be forced to admit that it's just another way to let the rich out of paying their taxes.


You'll notice that the SEC commissioner in TFA (a Republican) isn't exactly 100% for the idea, though it seems a specialized market (with a broader amount of access) for small businesses is a generally good idea.  Didn't realize going public cost a good chunk of capital, but I guess that makes sense...

That's my takeaway from the article, anyway...
 
2013-02-04 12:24:24 PM  
FTFA: "A panel that advises the Securities and Exchange Commission on Friday recommended an exclusive exchange be created for micro- and small-capitalization public companies that would only be available for only high-net-worth investors."

All this does is explicitly lock the poors out of the IPO market.


/No high risk - high return investments for you pee-ons.
 
2013-02-04 01:01:06 PM  
Would it still be subject to "free market" forces, then?
 
2013-02-04 01:06:54 PM  
fine with idea as long as they repeal legal tender laws.
 
2013-02-04 01:09:04 PM  

demaL-demaL-yeH: FTFA: "A panel that advises the Securities and Exchange Commission on Friday recommended an exclusive exchange be created for micro- and small-capitalization public companies that would only be available for only high-net-worth investors."

All this does is explicitly lock the poors out of the IPO market.


/No high risk - high return investments for you pee-ons.


They are already locked out of these investments. This is an attempt to increase liquidity for investments that require qualified investors.
 
2013-02-04 01:22:15 PM  

You're the jerk... jerk: demaL-demaL-yeH: FTFA: "A panel that advises the Securities and Exchange Commission on Friday recommended an exclusive exchange be created for micro- and small-capitalization public companies that would only be available for only high-net-worth investors."

All this does is explicitly lock the poors out of the IPO market.


/No high risk - high return investments for you pee-ons.

They are already locked out of these investments. This is an attempt to increase liquidity for investments that require qualified investors.


I was joking about IPOs - it's an open secret that those go to big investment firms and their favored customers.
That said, you've fallen for the old "increase liquidity for investments" gag - perpetuating the myth that stock market gambling trading stocks has anything to do with financing companies.
(Real investment is selling stocks or bonds or borrowing money so your company can buy the things that build the things you sell.)

/And you completely missed how it locks the poors out of buying small-cap stocks.
 
2013-02-04 01:23:52 PM  
I resent that headline subby... My car is a Toyota CAMRYand it's 21 years old and... oh... nevermind.
 
2013-02-04 01:41:04 PM  

demaL-demaL-yeH: You're the jerk... jerk: demaL-demaL-yeH: FTFA: "A panel that advises the Securities and Exchange Commission on Friday recommended an exclusive exchange be created for micro- and small-capitalization public companies that would only be available for only high-net-worth investors."

All this does is explicitly lock the poors out of the IPO market.


/No high risk - high return investments for you pee-ons.

They are already locked out of these investments. This is an attempt to increase liquidity for investments that require qualified investors.

I was joking about IPOs - it's an open secret that those go to big investment firms and their favored customers.
That said, you've fallen for the old "increase liquidity for investments" gag - perpetuating the myth that stock market gambling trading stocks has anything to do with financing companies.
(Real investment is selling stocks or bonds or borrowing money so your company can buy the things that build the things you sell.)

/And you completely missed how it locks the poors out of buying small-cap stocks.


If by open secret you mean the law, then you are correct.
And if you by "locks the poors out" you mean acts exactly as the current system does then you are also correct.

This would a market that allows companies who can only take qualified investors (an actual term, you can look it up) to utilize an open market which would bring liquidity to their assets increasing their ability to raise funds.
 
2013-02-04 02:05:10 PM  

You're the jerk... jerk: demaL-demaL-yeH: You're the jerk... jerk: demaL-demaL-yeH: FTFA: "A panel that advises the Securities and Exchange Commission on Friday recommended an exclusive exchange be created for micro- and small-capitalization public companies that would only be available for only high-net-worth investors."

All this does is explicitly lock the poors out of the IPO market.


/No high risk - high return investments for you pee-ons.

They are already locked out of these investments. This is an attempt to increase liquidity for investments that require qualified investors.

I was joking about IPOs - it's an open secret that those go to big investment firms and their favored customers.
That said, you've fallen for the old "increase liquidity for investments" gag - perpetuating the myth that stock market gambling trading stocks has anything to do with financing companies.
(Real investment is selling stocks or bonds or borrowing money so your company can buy the things that build the things you sell.)

/And you completely missed how it locks the poors out of buying small-cap stocks.

If by open secret you mean the law*, then you are correct.
And if you by "locks the poors out" you mean acts exactly as the current system does then you are also correct.

This would a market that allows companies who can only take qualified investors (an actual term, you can look it up) to utilize an open market which would bring liquidity to their assets increasing their ability to raise funds.


*[Citation_needed.jpg] Because, you know, it's, like, illegal to sell shares to the general public when you're offering them for sale for the first time to the general public. It's called an Initial Public Offering for a reason.

*snickers* Ya. Sure ting dere.
 
2013-02-04 02:05:38 PM  
You need the suckers to buy the pumped-up stock and then sell it in a panic so you can short it.
 
2013-02-04 02:12:51 PM  
Sure, why not? They already seem to have their own version of the justice system and better access to those in the government.
 
2013-02-04 02:18:24 PM  
Hey there SEC, why don't you take a break from giving Wall St. it's third lap dance of the night and F%CKING FINISH THE REGULATIONS FOR THE DAMN CROWD FUNDING BILL!?! Please, for the love of god stop trying to "protect us from ourselves",
 
2013-02-04 02:36:15 PM  
I would be okay with this under three conditions:

1. Any company looking to go public would have to explicitly choose to do so on this separate exchange

2. Trading on this exchange cannot be done from any 401k and cannot be done from any managed Roth or Traditional IRA.

3. Once a company has raised its intended capital (stated at the time it enters the snob exchange), it must begin trading on an open exchange and make all the standard disclosures

Otherwise it just creates a huge incentive for managers to screw people even worse than they already are getting screwed on their managed retirement accounts.
 
2013-02-04 02:38:29 PM  

demaL-demaL-yeH: You're the jerk... jerk: demaL-demaL-yeH: You're the jerk... jerk: demaL-demaL-yeH: FTFA: "A panel that advises the Securities and Exchange Commission on Friday recommended an exclusive exchange be created for micro- and small-capitalization public companies that would only be available for only high-net-worth investors."

All this does is explicitly lock the poors out of the IPO market.


/No high risk - high return investments for you pee-ons.

They are already locked out of these investments. This is an attempt to increase liquidity for investments that require qualified investors.

I was joking about IPOs - it's an open secret that those go to big investment firms and their favored customers.
That said, you've fallen for the old "increase liquidity for investments" gag - perpetuating the myth that stock market gambling trading stocks has anything to do with financing companies.
(Real investment is selling stocks or bonds or borrowing money so your company can buy the things that build the things you sell.)

/And you completely missed how it locks the poors out of buying small-cap stocks.

If by open secret you mean the law*, then you are correct.
And if you by "locks the poors out" you mean acts exactly as the current system does then you are also correct.

This would a market that allows companies who can only take qualified investors (an actual term, you can look it up) to utilize an open market which would bring liquidity to their assets increasing their ability to raise funds.

*[Citation_needed.jpg] Because, you know, it's, like, illegal to sell shares to the general public when you're offering them for sale for the first time to the general public. It's called an Initial Public Offering for a reason.

*snickers* Ya. Sure ting dere.


I am not sure what you are getting at. I guess it is theoretically possible for a company to go public without using an underwriter but assuming that model is followed (it will be) there are specific rules on how they can act as the market maker. There is no secret in the process.
 
2013-02-04 03:13:47 PM  

You're the jerk... jerk: I am not sure what you are getting at. I guess it is theoretically possible(1) for a company to go public without using an underwriter but assuming that model is followed (it will be) there are specific rules on how they can act as the market maker. There is no secret in the process.


(1) a. Theoretical?
     b.   Really?
     c.   Are you absolutely certain?

Also, could you please cite the law that you claim exists for IPOs that requires underwriters to keep the stocks out of the hands of the general public?

/You must like jerking.
 
2013-02-04 03:17:42 PM  
Maybe they should look at the greenlit thread that's 2 down from this one...
 
2013-02-04 05:07:42 PM  
As the owner of a 10-year old Toyota Corolla, I'm getting a kick...
 
2013-02-04 06:07:15 PM  
This version of the proposal seems to try to assist small companies with going public without all the hassles/expense of being a publicly traded company.  Since related regulations were intended to protect the public, this market will only be available to those who need/rely on such protections the least.

An alternate version of the proposal floated a couple years ago, if I recall correctly, tried to justify it as protection for the company against wild swings in stock prices caused by the unwashed masses trading their 50 shares of stock at the slightest hint of something they read about in a blog somewhere.

Either case seems to be crappy in that it continues to concentrate wealth at the highest levels and take away more control by the general public.
 
2013-02-04 06:26:35 PM  
Ain't no war like a class war.
 
2013-02-04 06:40:54 PM  

Vegan Meat Popsicle: I would be okay with this under three conditions:

1. Any company looking to go public would have to explicitly choose to do so on this separate exchange

2. Trading on this exchange cannot be done from any 401k and cannot be done from any managed Roth or Traditional IRA.

3. Once a company has raised its intended capital (stated at the time it enters the snob exchange), it must begin trading on an open exchange and make all the standard disclosures

Otherwise it just creates a huge incentive for managers to screw people even worse than they already are getting screwed on their managed retirement accounts.


I would add the qualification that any earnings garnered through such an exchange be taxed at normal rates, and not special capital gains rates.
 
2013-02-04 08:07:04 PM  
"Ownership in our society should not be an exclusive club. ... Everyone should be a part owner in the American dream."

www.georgebushsuck.com
 
2013-02-04 11:08:39 PM  

monoski: This is already in place. It is called the limited partnership and private equity markets.


They also want this market to be prospectus and disclosure free.

Sounds like they want a pinksheets for the rich. Cos there's no money in defrauding the poor anymore.
 
2013-02-04 11:16:08 PM  
They need to find these people and execute them immediately.

The poors that is.  How dare they try to make money.
 
2013-02-05 01:23:10 PM  

demaL-demaL-yeH: You're the jerk... jerk: I am not sure what you are getting at. I guess it is theoretically possible(1) for a company to go public without using an underwriter but assuming that model is followed (it will be) there are specific rules on how they can act as the market maker. There is no secret in the process.

(1) a. Theoretical?
     b.   Really?
     c.   Are you absolutely certain?

Also, could you please cite the law that you claim exists for IPOs that requires underwriters to keep the stocks out of the hands of the general public?

/You must like jerking.


I am still not sure what your point is. Google used underwriters.

Let me clarify, in the very likely scenario that you use underwriters there are rules on how they can act as a market maker. It isn't an "open secret" it is well known and publicized.
 
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