The stock market for those who do not know, is the integration of various companies, institutions and individuals who carry out the financial transactions, such as the Balls Securities brokers of stock exchanges, the investors, the institutions, the governing transactions carried out in the stock market and the issuers.That is, the stock market, it could say that is composed of all the elements it needs a market, in a nutshell, it could translate into the building of the Stock Exchange, as the investors, the customers, the suppliers and the stockbrokers, all of the above is essential to carry out such transactions.
Moreover, the management of equity markets may cause the global economy to reach a crisis, because of the variability that has these markets. The stock exchange operations are required to meet the different needs, such as obtaining the various financings that are made by companies selling shares in bag houses for cash, it also gives the possibility that those who in some way or another can be called the savers, across these markets to become the investors and ultimately the state is financed through bond issues.
Today the stock markets, thanks to the advances in technology are electronic and exchanges through electronic communication networks are realized, this thanks to a whole different servers and a special software that has been made to carry out the different transactions.
The brokerage firms realize profitability with shares; also need to reflect these differences in the value to see the features they have in common.These features reflect the development of the stock market marking enormous size of this market, where figures are often considered sidereal handled internationally.World capitalism can be reflected in the movement of these stock markets, their economic system is a reflection of what happens in those stock markets.
It’s been over 7 (seven) years since the collapse of the Lehman Brothers, but all indications are that the global crisis has not hit the bottom, on all the emerging countries whose revenues depend on exports of raw materials. To this is added according to the Institute of International Finance (IIF) that capital outflows of those emerging countries exceeded over a billion of dollars.
This makes that the investors buying sovereign debt coming from Latin America and the Pacific Asia are very much full of fear and much uncertainty, because they consider it’s no longer safe to get the high dividends betting on those high-risk financial assets.
Now on the contrary, it is safer to dump their investments to the government bonds of treasure of the United States of America. A move from the enormous debt of this country, no one believes that Washington will declare broken in the short term banking, as this would lead to the dollar to be saw weakened its status as a reserve currency, and with it, the hegemony of the United States of America would be mortally wounded. It seems a contradiction that even with the serious problems of the United States of America economy, the confidence in the dollar has hardly been dented since the crisis of the year of 2008.
At this time the money is returning from home to the pockets of the Wall Street moguls.That is why explaining the fall in the exchange rates and the stock markets and the emerging countries move.What really happens to that money?That money is either going to the treasure, or will you use it to carry out the mergers and the acquisitions, but do not invest massively in the productive activities, thus the labor market in the United States of America is still very far from overcome its own structural degradation.
That is why the IMF (International Monetary Fund) insists that the United States monetary authorities should exercise with very much caution.Given the high debt levels on a global scale which is valued in the dollars, the executive director of the International Monetary Fund, Christine Lagarde has suggested on several occasions that the United States of America should be delayed until at least the year of 2016 the increase in the rate of interest in the Federal funds.It is true that the data of the labor market in the United States of America look better than before, but it is not implying that the United States economy is enjoying a sustained recovery.The private debt remains very high, as are the companies and the families.Thousands of Americans cannot find a full-time employment, many unfortunate survive at the expense of the unemployment insurance and the food stamps.
In contrast to the above, t
hanks to the government policies, the United States of America banks have managed to increase their capitalization levels, as well as a financial leverage, which it is clear that rather than providing credit resources to the small and the medium enterprises, they have been dedicated to make a speculative bets on the stock market.
Seeing all this from a global perspective level, the big risk is that any fast decision can produce to shore recessionary trends in other countries.In Europe because of the crisis they are experiencing, many of the countries of that continent has asked the Central Bank of the Monetary Union to established some extraordinary measures in the event that the economic situation is so detrimental.Also whole other countries in other continents such as the country of Japan steps were taken to stimulate such tax elements and a set of other reforms from the structural point of view, and then all that productivity is increasing a lot.
Yet the volatility of the financial markets does not diminish it as the most powerful central banks fail to agree on plans for monetary policy, mean while some countries are prepared to raise the cost of the credit, as such as the United States of America, other European countries want to launch programs of far more violent injection of liquidity.
If there is no agreement or consensus that cannot be achieved between the countries of the world power over the monetary policy to be implemented to combat the global recession, the crisis in those countries will not stop.All this was evident at the summit of the Group of 20 (G-20) that took place in Turkey.What seems certain is that whiles the world leaders do not agree on fiscal policies, workers are still submerged in deplorable conditions, as the financial reform that could bring the crisis to these countries is very slow.It might be added to that the outflow of capital from emerging countries to countries that make tax havens are not investigated, this makes emerging countries suffer from a capitalization, and developing countries do not reach their maximum productivity improvements in its class worker.