You CAN Help after WTC - Buy Stocks??? (long)

The Pit…IMHO…GD? ::shrug::

Help me recalibrate my outrage meter.

I lurk here far more than I post, mostly because I learn here. I’m not that bright or insightful, and I find I get sides of issues here that I never would have considered.
So, I got this email forwarded to me. Peter Jennings also read it on the air, although he said something about “taking it in the spirit it was intended” and made some comment that it was a joke. I don’t know, actually don’t think so - the author and his company are real, but I hesitate to provide a link lest I piss off mods or violate board policy (who knows if he actually wrote it) If it is ok, I can post the particulars later.

The reply I’m considering sending is below. Is my, well, not outrage (too strong) but “upset” out of line? Is this a reasonable and even “proactive” (hate that word) thing to call on Americans to do? I’m having trouble sorting out why his message angers me - something about it seems…narrow or “vested-interesty”, to coin a term. I just don’t see that using this reagedy to urge people to buy stocks will do anything but aid those who have a bunch of money invested in stocks, and particularly those who have a bunch of money invested in stocks AND a short-term view (as opposed to those in it for the long haul. Seems to me there are far more appropriate and meaningful ways to “do something TANGIBLE”. And it seems this suit might be calling for this action more for the good of a small sector of America than for the true good of America.
I, by the way, have money in the market and am not prone to corporate-bashing in general. In other words, I don’t have a bone to pick with capitalism, corporations, stocks, investing, etc.
I always find well-reasoned and well-informed opinions here. What do people think.?

Shaky Jake

My reply

[quote]
Dear Mr. NAME OMITTED
Did you really send the email below? Is this truly your “Call to Action” for how Americans should respond to this national tragedy? First, I would hope you would permit each American to respond as they see fit. Secondly, from your corporate website I see that you background is in “campaign strategy, political media, and message development”, not economics nor economic policy. As I’m sure you are aware, a buoyant stock market is REFLECTIVE of a healthy economy, NOT the cause of it. Temporarily and/or artificially propping up stock prices will do nothing to strengthen the economy. People can buy Cisco like crazy, but if no routers sell, Cisco is SOL. Next week, or next month, as economic indicators and earnings reports come in, investors - institutional and individual - will buy or sell with no regard for what happened The Monday The Market Re-Opened. If indicators and earnings still reflect a troubled economy, stocks will continue to slide. If many Americans, who could not perhaps truly afford to, took your suggestion of buying stocks as a way “to do something”, they may be out a lot of money, all for naught. Who will prop them up? Corporate America? Unlikely. So, you call on Americans, “the consumer”, to once again shoulder the burden. Consumers have been doing so by “displaying confidence” and continuing to spend, while Corporate America lays off in the thousands. Kind of hard to stay confident and continue spending when you’re out of work. Will Corporate America do its part, perhaps by announcing “we don’t care what short-term numbers, profits, or indicators say, we have faith in this economy and the American People, and we’re not going to put one single American out of work. We’ll need them when the economy rebounds, as it will shortly, and we need America working in this time of crisis”? In my hometown, Midway Airlines laid off 1,700 people the day after the bombings because they PROJECTED a decrease in air travel. Didn’t wait for it to happen, just laid off almost two thousand people. I bet they wanted to minimize their losses, jobs and the welfare of their workers be damned. And you call on Americans to spend their hard-earned money, in a troubled economy, on some sort of gesture of faith while corporations indicate through their actions they have little faith in the health of the economy. I do understand that corporations have fiduciary responsibilities to their investors. Maybe Americans have fiduciary responsibilities to their husbands, wives, and children to maintain indoor living, eat food, and buy new shoes.

I note that you " also serve corporate clients such as AT&T, Merrill Lynch…" Hmmm, could this have anything to do with your “Call to Action”? Merrill Lynch? I bet they’d love it if millions of new investors jumped into the market - some would likely trade through them - think of the commissions! Come to think of it, AT&T is a rather popular stock; some of those investors would likely buy AT&T stock, wouldn’t they? How convenient.

I trust in addition to telling millions of Americans to buy stocks for the good of the nation in this time of crisis, you will also be publicly urging specific, individual corporations with whom you have relationships to hold the line on lay-offs, and chastising them as un-American, cowardly, and driven by greed if they don’t. I eagerly await THAT email making the rounds. But I’m not going to hold my breath.

I find it shameful that you invoke the families who have suffered, and are suffering, so horribly. Your idea of doing something tangible to help is to buy a favorite stock? Those who know you must be so proud.

I have never done anything like this, but I find your message beyond the pale. You sir have spent far too much time far too wrapped up in “campaign strategy, political media, and message development”.

My Name Here

I think buying stocks may be a good investment now. EXCEPT that the 5th rounds of layoffs just took place in my company. We are one of the largest hotel companie in the world.

The rest of us were asked to take 3 or 4 day weeks for the next two months.

How many others will not be able to afford this now?

But do we necessarily have to place the order at Monday’s closing price? I was thinking of placing an order for Citigroup at $37 or lower, which is $5 off the closing price on Monday.

JohnT, I think people are trying to keep the market from getting hammered. You’re $5 lower bid is what about a 12% drop. That would qualify as a crash. think the people behind this move would like to see people putting in bids at the same or higher price.

Personally, I would applaud you putting in a bid, at any price. You would be stepping up to the plate and helping provide liquidity in a bad time. The worst crash is when there is no volume and the market just freefalls down with no bottom in sight.

You can check http://www.bloomberg.com for further details. The SEC under new emergency powers “The five-day emergency rules let public companies repurchase stock without following limits on how many shares they can buy or restrictions forbidding buybacks at the beginning or end of a trading day.” This will give incentive to companies to buy back shares, which will help absorb any mass selling.

In addition, “the SEC’s rule package also would let mutual funds borrow money from affiliated banks so that, if mutual fund investors rush to redeem shares, fund companies can pay them without being forced to sell stock.”

The above two changes should improve market liquidity, prevent a vicious downward spiral, and also provide support for other stock markets around the world.

Once again, buying stock at this level is probably a good long term investment. It would also add some stability to the global financial system. It is also very likely that bin Ladin has a very big bet out there that the markets will crash, and preventing that will hit him directly in the wallet. Much of bin Ladin’s power comes from the couple hundred million dollars he controls.

In order for you to BUY a stock, someone has to SELL one. So, by this logic, we all should now SELL stocks.

Yeah, sign me up for a coupla hundred shares of American, Continental, and Northwest Airlines…

Yeah, keep the money flow flowing. We don’t want bin Laden and his ilk to buy up cheap stocks, do we?

Another misinformed dogooder. If you want to help - buy consumer goods. The stock market is a secondary market and while there are ancillary benefits, it’s primary benefit of a high price is for corporations to get the maximum amount of money for an IPO. Buying consumer goods is a direct way to help - buying stocks is indirect and may not help at all. If there are people who disagree, ill explain further.

I think someone who sent out that email has a lot of stocks & doesn’t want them to be worth less this week.

Also note that if you are not licensed to give out information on stocks to purchase/sell that it’s against the law to do it. There was a kid arrested for doing this on the net earlier this year, pushed stocks he owns then dumped them, the so called ‘pump & dump’ scheme. Which is illegal.