
Bank of Japan to be top shareholder of Japan stocks - apo
https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be-top-shareholder-of-Japan-stocks
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flocial
America by comparison [0]. Japan has a declining population, the pension
scheme is considered to be running on fumes by most, and now the stock market
is propped up by government itself.

[https://www.businessinsider.com/who-actually-owns-the-
stock-...](https://www.businessinsider.com/who-actually-owns-the-stock-
market-2016-5)

~~~
lotsofpulp
Same situation in US in my opinion. It’s crazy to not be all in on equity
index funds, since everyone is invested in them via 401k and pension funds, of
course the government is going to do whatever it takes to prop up the value.

~~~
doctorpangloss
You're getting it backwards my dude.

Baby boomers turned 65 this year, the peak retirement there will ever be in
the history of the world.

Individuals selling small amounts of stock, each for slightly below midpoint,
actually has a much larger negative effect on prices than one large sale at
slightly below midpoint does. Think about what the order book looks like over
time.

People expect a sudden recession. The ride to the bottom is going to be
a-historically long and slow, as retirement accounts unwind contractually
slowly, and big institutional investors wait out lower capital gains taxes.

~~~
lotsofpulp
I think the government will be incentivizing stock ownership much more via
state sponsored 401k, or HSAs, or 529, etc. Even now, we're only at just above
50% of population having a stake in public companies:

[https://www.chicagotribune.com/business/ct-americans-
dow-220...](https://www.chicagotribune.com/business/ct-americans-
dow-22000-investing-20170803-story.html)

Also, number of public companies is decreasing, with the bigger players
getting bigger and bigger. And finally, I would expect even more international
funds to flow in to the large conglomerates as their efficiencies of scale
take over.

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roenxi
I enjoy defending capitalism; I think the principle of funneling resources to
people who create more resources is sensible.

It needs to be underscored that whatever this is, it isn't capitalism. Exactly
which -ism it is I know not; but it is a terrible idea.

Central banks interfering in markets can only be to raise prices long-term.
They aren't going to interfere to drop prices, the political pressure is
unbearable over the medium term. I'l jump to the American Fed because I know a
bit more about it - they haven't been able to sustain interest rate rises in
my lifetime [0], there is a very clear downtrend.

This sort of activity in turn disables all the signals used to vent
incompetent companies from the system. A direct result of these policies by
the BoJ will be companies that take in resource, and churn out value that is
less than the inputs. It is unsustainable, stupid and destructive. There are
no excuses for it.

I lump the US Fed's QE programs into the same basket, but at least they muddy
the waters enough that the links aren't obvious to a neutral observer. The
Bank of Japan's activities are sick.

[0] [https://tradingeconomics.com/united-states/interest-
rate](https://tradingeconomics.com/united-states/interest-rate)

~~~
dunstad
Funneling resources to people who create more resources does make sense,
provided the assumption that those specific individuals are the key ingredient
to the resource creation.

From what I understand, the people you defend capitalism from tend to assume
that those individuals themselves are less relevant than is their place in the
larger system.

Does this summary of the arguments line up with your experience?

~~~
roenxi
Genuinely productive people are pretty rare (1 in 100 type numbers). I can't
claim to know exactly what a debate opponent is thinking, but usually I
assume:

1) Most people are more involved with the famous and common 'bullshit jobs'
instead of the much fewer super-productive jobs - like a couple of farmers who
can feed orders of magnitude more people than just themselves. Maybe they
haven't interacted with the parts of the economy that do genuine wealth-
creation and don't understand it.

2) They don't accept that incentives matter more than inherent nature, so they
believe the productive will continue producing even if the incentives to do so
are reduced, so resources can be redirected to 'those with needs'.

The second is a pretty defensible position, although obviously I disagree most
of the explicit and implicit assumptions.

As an aside, this has already become one of my fastest down-voted comments.
Could someone stop by and explain what they don't like about it? I didn't
think it was very inflammatory.

~~~
dunstad
Capitalism has become pretty controversial lately, so if I had to venture a
guess I would say that's likely why.

Can I ask why you put quotes on 'those with needs'?

~~~
roenxi
It is language that leads to hot debate and that I don't personally like. I
wanted to keep it isolated from the rest of my paragraph because it isn't my
frame, it is the frame of people I don't agree with.

~~~
User23
I assume you're alluding to: "From each according to his ability, to each
according to his needs."

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skybrian
If the companies they buy end up making money, might this be an interesting
alternative to taxes as a way to fund the government?

~~~
harshreality
Corporate profits come from somewhere. It would be a switch from an income tax
to a (hidden) federal consumption tax.

The initial money to pay for stock has to come from somewhere, and that
somewhere would be more debt or traditional taxes.

The federal government would control the companies (assuming it acquires
majority shares), even if government employees aren't staffing them. That's
socialism.

Socialism/communism is bad because if given the opportunity for direct
control, government can't help tinkering in business affairs to score
political points, rather than because it makes the business better.

~~~
skybrian
Other than raising the money, that doesn't seem too hard to solve. The Federal
Reserve could buy index funds and be a passive investor like everyone else.

I'm reminded of Matt Levine's running joke (?) about whether or not index
funds are socialism.

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yasp
Partially off topic: if the US Fed bought publicly traded equities, would we
know about it?

~~~
ryeights
It's widely suspected that this is part of the job of the Working Group on
Financial Markets...

~~~
User23
Also known as the Plunge Protection Team.

