HAVE A SEAT ON THE STOCK EXCHANGE!!!!!Post 22

Hi,

I suppose we can try to demystify Wall Street with some definitions and why it's important to our system of government.

Wall St is primarily the name of the financial District in New York City and where the New York Stock Exchange and banks and brokerage houses are located.
In other words it's the heart and lungs of America's finances. And in this blog we've discussed factors of this institution like Corporations, Hedge funds etc. but here we'll explore the language of the "street".

When our Corporation "Up Yours" went "Wall Street" it had to have CAPITAL STRUCTURE which is simply a plan for securing the capital necessary for its activities. See, you knew that!!!!!!!!!

Stock is the shares in "Up Yours" Corporation and others on THE MARKET. The word SHARE means a COMPONENT PART OF THE CAPITAL STOCK ISSUED. Usually in denominations
OF $1.,$5.,$10,$25, OR $100. AND THE STOCK CERTIFICATE the stockholder receives represents the number of shares bought to be held.

A JOINT STOCK COMPANY applies to a partnership whose business is conducted by officers chosen by Stockholders-Perhaps YOU. Rare now, they sponsored settlement in America during Pilgrim times.

Stocks like "Up Yours" that are listed on the Stock Exchange are required by the SEC
(Security Exchange Commission) to have a registrar and transfer office as means of checking and balancing, eliminating fraud, and for quick transfer. Cash sales are sales of securities that must be delivered the same day.

The fun with stock price begins with the BID OFFERED PRICE; MARKET PRICE is the actual price when sold; firm price is a quoted and held to price for a given period of time; NOMINAL PRICE is the estimated price. GOT THAT??????????GOOD!!! BECAUSE IT'S JUST LIKE THE LOCAL Antique dealer down the road.

The language of the Street gets creative with PUT AND CALL which is simply an option to either buy or sell an "UP YOURS" stock at a certain price within a certain time. You know if the Antique Dealer knows you, he'll agree to that!? If you put up a deposit! Put and Call has a fee for one month but you don't have to exercise the option but of course you lose your fee. AND YOUR DEPOSIT AT THE ANTIQUE DEALER. There's a lot of creative activity with PUT AND CALLS including HEDGING YOUR BIDS, BETS, TRADES AND OTHER TERMS.

OLD (Not aged) stockholders Of "UP YOURS' can benefit if new stock is issued at a given price during a limited time that is lower than the market price. This is called RIGHTS.

DIVIDENDS a portion of the earnings that the "Up Yours' Corporation distributes among the stockholder(s) of their corporation. GOOD!!!!!!!

EX-DIVIDEND Means you don't get any tonight!! Dividends are closed for a particular period. NOT GOOD!!!!

NEGOTIABLE PAPER is any document transferred between folks by endorsement or delivery. Promissory notes (letters of credit issued to people traveling overseas including travellers cheques), drafts (Order for specific monies to a 3rd party), bills of exchange (written orders of all types permitting payment in distant places) are included here. Those who travel have been to EXCHANGE CENTERS in foreign countries to get the local currency with travellers cheques.

Interest is certainly familiar but is USURY? Not so much nowadays. It is the rate of interest in excess of the legal rate. The rates charged presently by Credit Card companies used to be TERMED USURY. How times do change!!!!!???

Simple interest is the interest allowed for the use of the loaned principal. Other forms of interest must be specifically designated.

THIS IS A SUBJECT THAT SHOULD BE STUDIED BY ALL FOLKS GETTING ANY KIND OF LOAN INCLUDING MORTGAGES and CREDIT CARDS!

PERIODIC INTEREST is the inclusion of simple interest on the unpaid balance while COMPOUND INTEREST is the interest paid on the PRINCIPLE AND SIMPLE INTEREST at regular intervals. INTEREST ON INTEREST gets expensive!

Jokes about WALL ST. always involve BULLS AND BEARS. A BULL MARKET is when stock prices move UPWARD (A BULL GORES YOU UPWARD) and a BEAR MARKET when the market prices go DOWN (BEARS SQUISH YOU!). The $1000. downturn the other day in the overall market (due to some strange happenings) can be said to have been "GRIZZLY BEARS" (my term). And could have caused a CIRCUIT BREAKER (Explained later).

Stock brokers engage in buying, selling, and distributing stocks and bonds. SEC says anyone who can do transactions must be a licensed broker.

What is a SEAT on the STOCK EXCHANGE? My father-in-law had one. No, it was not a special armchair but was originally a wooden seat!!!!!!!! Seats sold on the New York Stock Exchange for $80,000. even in the 1800s and offered special privileges. In 1929they carried a price of $625,000 just before the market crash.

A "seat" on the market represented an equity interest in the Exchange and the privilege of accessing the trading facilities of the market. It officially ended on 12/30/2005 and the last price paid was four million dollars.

In the old days members did sit in assigned seats in the hall of the Exchange where daily the employees called out the trading of stocks at set times so those with seats knew at what price their stocks traded. This was before continuous trading and after licensed professionals were allowed to sell the securities on the floor (no, they did not roll dice on the floor) of the EXCHANGE.

Later the TICKER TAPE became available for those not able to visit the stock market and folks visited Brokers' offices to watch the ticker tape and find out how their stocks were doing. Now it's so easy on TV!

Stock options originally known as "the Curb" began in the 1800s and folks began meeting on the curbstone at Broad St. near Exchange Place and moved indoors in 1921 but didn't become the AMEX (American Stock Exchange) until 1953.

There's also a trading curb which is known as a CIRCUIT BREAKER and is the point stocks will stop trading for a period of time in response to substantial drops in value. Levels are set at the beginning of each quarter of trading.

A FLOOR TRADER can be that human you see scurrying around the cluttered floor of the Stock Exchange who ACTIVELY buys and sells stocks rapidly for himself or others.

An Arbitrager is a group of traders who buy in one market and sell rapidly in another. It's for a quick advantage of temporary price differences. Like taking advantage of the old 2 hour sales K-MART used to run!

There's more but that's it for today. These terms can help clarify the MAD MAN OF TV,the local newspaper's articles as well as offer a better insight into the important functions of our market system.

All of these functions of the Stock Market allow companies that provide the United States with the necessities and luxuries of life to function smoothly and legally and provide the companies with needed capital.

We are called a MARKET ECONOMY because the financiers originally established parameters to conduct business honestly, logically and ethically.

Those parameters have since the MARKET crash in 1929 been interfered with by the government. It has not been successful-witness the present day problems the laws passed were supposed to have resolved.

China although governed by communism has learned the value of freeing up the market system and in a record amount of time has turned its economy and society into a modern day miracle.

Maybe it is a lesson to be learned by our government. Let the financier finance and the Government govern and make their divorce a welcome day in court.


Cheers, Connie