Deviations from disposition of Capital Market

By : Siti Khumaiyah (11220006)

If we look at the history of the world crisis , almost entirely stems from the capital markets sector . It can be seen from Wall Street stock market crash in 1929 which was followed by a prolonged economic recession in 1930 , 1940 , 1970 , 1980 , Black Monday in 1987 , the 1997 financial crisis in Asia region . Such a crisis never stops caused by the capital markets going back at the end of 2008 ( Firman : 2009) . The global crisis that originated as gifts from the American end of the most bitter for the world economy . But the world seems strangely never made ​​aware by the depravity of the capitalist economic system , which is based on the capital markets sector . Boro - boro improve capital market system fragility brobok this , instead they assume the crisis ordinary sebagagai it is a necessity of an economic cycle .
If we explore further , we would know that the stock market crashes that have occurred over and over again is inseparable from the existence of some deviations from the objectives and main functions of the capital market to its disposition . The main purpose of the capital markets in question are :
First , as an institution that is used by companies to obtain cheap funding to carry out its business activities . From where should the intermediary function of capital markets is very urgent . But in fact the stock market turned into land for speculators to profit as much as possible . As a result, the stock market seems to be a jungle that allows each speculators are playing in it for gripping each other with each other . Not infrequently we hear a very happy investor because billions of profit in a matter of minutes, while the other investors should be disappointed or even commit suicide due to heavy losses they experienced . This is where the law of the jungle as applicable .
Second , as a means of public investment . In this case , the existence of capital markets provide an option for people to invest . With the stock market , people are not only able to invest their wealth in the form of property , gold or deposits at the Bank , but also can invest his wealth in the form of stocks and bonds.
As an ideal investment , investing in the stock market should be a long-term investment , in particular by investing in companies listed on the stock market . Thus , the public can participate to have a healthy company and a bright prospect .
However , like much of the fire roasted , most investors who play the stock market is not an investor who holds a long-term investment goals . the majority of them are just looking to benefit from capital gains instead of dividends alone . As a result they often deploy some troubling issues with the aim of increasing the price of their shares . In doing so they will get a large capital gain from the rise in stock prices is apparent .
Third , as a leading indicator for a country's economic trend . As a leading indicator , the stock market should represent the real condition of the economy is in a state . Development of capital markets should also rapidly developing in line with the real sector . But in fact the development of the capital market has been outperforming the real sector which is the backbone of the economy . It can be seen from the financial market turnover in 2006 - including capital markets - which reached U.S. $ 2 trillion per day . While the turnover of the market of goods and services amounted to only U.S. $ 7 trillion per year . This is where by Drucke as quoted by Prof . Didier S. Damanhuri called decoupling process which in turn raises Bubble Economy to the economy of a country . The Bubble Economy in the end will erupt and give disaster for the world economy as the all-powerful where crises that have occurred .
Also as a leading indicator , the price of shares listed on the stock market was supposed to be representative of the performance of the company . High or low a stock should depend on the good or bad performance of the issuing persuahaan . But ironically , the rise in the price of a stock often increases superficial form . Not infrequently increase the value of the stock is only caused by the actions of the players fry stock shares alone , not by the good performance of the issuing company . Rise in the share price doubled from the price should be is what will ultimately aggravate the condition Bubble Economy for the economy of a country . It can be seen from the case of the Subprime Mortgage crisis triggered the global keugangan at the end of 2008 yesterday . Where the price of the securities to be issued under the guarantee is remote housing many times the market price of such housing .