Should Janet Yellen Decide Share Prices?

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Prior to the information age and the rise of central banks, interest rates were determined by market forces. In a nutshell, traditional economic theory viewed interest rates being set at the level where the return an investor required for the loan of its funds equaled the rate a borrower was prepared to pay to use same funds. If a young family wished to take out a mortgage for a new home, for example, the supplier of the mortgage (a bank) used to consider the credit-worthiness of the borrower (their ability to repay the loan) and set the interest rate accordingly. Unfortunately, this system led to gross injustices. Those individuals with little or no income (especially people of color and undocumented Americans) were refused loans or else charged exorbitant rates of interest. Thankfully, the world has moved on, as we explain below.

Due to advancements in our understanding of economic forces and markets, interest rates are now exclusively determined by the Federal Reserve. The Fed, as it is commonly referred to, is an entirely public body, owned by the government, whose goal is to serve the people. The role of deciding the exact rate of interest on virtually all securities is the personal responsibility of Janet Yellen, the chair of the board of  governors. It is the actions of Yellen and her predecessors that have kept the world economy on a sound footing and, indeed, saved us from near-disaster in 2008.

Given the outstanding job Yellen has performed so far, many accredited experts are asking now whether the scope of her intervention should be widened to include public stock markets. In the past, the actions of greedy speculators has too often led to market crashes. In times of market turbulence, individuals and their families have seen their life savings literally wiped out due to speculators driving down share prices. There is a heightened risk also that Vladimir Putin could hack into trading systems on Wall Street and cause market meltdown. Whilst we have benevolent investors like George Soros and Goldman Sachs to advise the Fed on policy decisions, the advent of new risks means we need to take much firmer action.

An advanced draft of one excellent proposal hit the Accredited Times desk this week. Under this proposition, Janet Yellen would have two further roles:

  1. To set the bid-offer spread for all listed companies on the secondary markets on a daily basis
  2. To determine the value of companies being introduced on the primary markets for capital raising purposes

The finer details of how exactly Yellen would set share prices are still being thrashed out. We can say, however, that weight will be given to important considerations such as:

  • The amount of CO2 produced in the company’s operations
  • Diversity in the company’s workforce
  • Investment in LGBT+ initiatives in the workforce and wider community
  • Trading with hostile/enemy nations (e.g. Russia) would reduce the price
  • Community outreach programmes

We welcome this proposal, which we believe will provide much needed stability to the world’s markets as well as providing a guaranteed ‘floor’ to share prices.

ExpatLogger
ExpatLogger

Can Janet Yellen control share prices? Yes she can!

Pbier
Pbier

She can do anything such is her portfolio of skills, the question is should she? I think the answer is an obvious yes – with markets near all-time highs, it is essential that someone not only keeps them there but makes them move ever-higher, just like property prices.

MillionDollarBonus

Agreed. Property prices, equities and interest rates need to rise in perpetuity. This the ideal economy that allows EVERYONE to profit, regardless of skill or knowledge. It’s a truly egalitarian market.

Pbier
Pbier

What keeps me awake at night is the terrifying thought that, at the moment, if the markets crashed there would be no bid as everyone would be rushing for the same exit door. If we guarantee the bid via the Janet Mechanism, the exit door remains as wide open as we decide. Thinking of Janet definitely helps me sleep better.

hungrypirana
hungrypirana

Playing with risk dynamics in the markets may enable us to disband a few Federal agencies including SEC, CFTC, etc, and whole chunks of Treasury and DOJ, which would cascade into reductions in Central Service agencies such as GSA, OPM, OMB, etc. This idea could have merit as long as we can move at least 5 million bureaucrats into the private sector, where they would need to learn how to earn their pay.

#neoliberalism

MillionDollarBonus

Uuuurr, no. Have you been living under a rock over the last ten years?? Cutting government spending and austerity DOESN’T WORK, MORON!! The government needs to INVEST in the economy to create jobs and economic growth!!! And regulations prevent stock market crashes!! Countries with the most regulations don’t have nearly as many stock market crashes as we do!!

Pbier
Pbier

We need to have one government employee per listed company to make recommendation to Janet who will have the ultimate say on a share price. Under this approach, we create many thousands of new jobs AND prevent crashes.

MillionDollarBonus

Yes! And we desperately need another JOBS BILL!! Obama’s jobs bill created thousands of good-paying jobs!! The people demand good-paying jobs, NOW!!

Black Lives Matter
Black Lives Matter

LOL, just what we need — more useless eaters in the private sector.

You need to WAKE UP. Look at the instability in the markets and the problems with healthcare access because of Republican obstructionism. We need MORE GOVERNMENT — not less government. A more robust public sector will help deliver better access to education, food, clothing, housing, transportation, daycare, ObamaCare, ObamaPhones, and all of life’s other necessities.

Pbier
Pbier

This is so right. We need to picture the government as a harbour next to a violent sea. The free market is wild and unforgiving; the government brings succour and safety. Janet Yellen is the kindly harbour-mistress who offers shelter

MillionDollarBonus

This is what should have happened a long time ago. The markets are made up of regular investors, many of whom have no high level qualifications in economics, and certainly no knowledge of social justice issues. We need a comittee of PHDs, Nobel Prize Winning economists, and professors in Critical Race Theory and Social Justice to determine stock prices. Companies should be valued based on their contribution to society and to humanity, not on their ability to simply deliver “profits” at all costs! Helloooo!! This is the 21ST CENTURY!!! There’s more to life than just PROFITS!!!

Pbier
Pbier

I agree with this in principle so long as Janet has the ultimate say. This is not meant in any way to suggest we don’t need CRT professors et al – of course we do! – simply that we need to avoid have an arbitrary decision making process in the interests of free markets. Having Janet distil all the recommendations and then decide on an objective basis ensures our markets remain fair and transparent. I hope this is clear.

MillionDollarBonus

Oh yes of course, she would make the final decision. This would just be an advisory comittee.

jfb
jfb

As your favorite movie said “ignorance is strength”, “freedom is slavery”, in that case it is necessary to impose not only government oversight but also central banking planning at every level to save free markets from themselves. In the fact this proposition may not go as far as it should; “Diversity in the company’s workforce”, well , the whole process of hiring (or firing), the working hours and the available meals at the cafeteria in each company should be left to Janet Yellen.

Pbier
Pbier

These are critical details to work on, we just have to be careful not to overload Janet so that she is micromanaging everything. Perhaps there is a role for Michael Obama in selecting the meals at the cafeterias? When she’s not acting as president of course.

Black Lives Matter
Black Lives Matter

Is it just me, or does Janet Yellen look like she is defecating while that picture was taken?

#hate-speech

Pbier
Pbier

We’re a non-judgement lot at AT as you know BLM, so if you’d like to interpret and imagine the photo in that way for whatever reason, that’s just fine.

ExpatLogger
ExpatLogger

That’s not very nice what you wrote, Janet don’t look like she’s straining. She has such a sweet smile, reminds me of Mona Lisa and the mother I never had, and thats good enough for me. Check your privilege BLM.

Black Lives Matter
Black Lives Matter

You’re right. I think I’ve been listening to too many hatemongerers here. I flagged myself for hate speech.

#speciesist

ExpatLogger
ExpatLogger

Being ampidextrous enough to recognize hate speech and flagg yerself senseless for it in the same breath is a skill not many men have. Normally is only womyn and trans-gendre who multi-task like that. You should be so proud BLM! Suggest you flag yerself again for good measure.

#sexist

#transphobic

Pine
Pine

Janet Yellen can control share prices and the cost of production sold to the consumer.

It is time that we rise up and stop the injustice of Trump, Republicans, and the rest of the white racist privileged men.

#NUKERUSSIANOW
#REMOVETRUMP
#INNAHILATEWHITEPRIVILEGED

I am sorry I am passionate about this It would be nice if we progressives take over the government by force, if necessary and take action on the above hashtag. I am sick and tired of racism and bigotry. This is 2017 and these white privileged mentality is still in the 1800s. This society need to heal and reparations need to be made.

TrueDat
TrueDat

Cool…venezuela crash, here we come!

vdv
vdv

Shouldn’t share prices depend on the gender and race of the person holding the shares? White/male – shares automatically become worthless. Trump can’t do anything, even with Russian support.

TrueDat
TrueDat

Yellen give me and the usa the shits!

wpDiscuz