Monday, July 7, 2014
Maketing Financial Panic : Buying and Selling Greed and Fear on and Off Wall Street
Maketing Financial Panic : Buying and Selling Greed and Fear on and Off Wall Street: Commoditization of Psychology is Big Business. Feeling Good ? Buy These Stocks, Feeling Bad Buy Gold and Organic Produce Lex Loeb Contributor Network . Psychology is the root of all evil? Just review the History of Adolf Hitler and his feel good message for the German people. There is realliy nothing new about psychology being used to transform society. Money often gets more blame than pyshcological manipulation. Money is just a passive entity, and medium of exchange that makes no value judgements on it's own. Money is can be a tool for evil but usually it enables agreements between parties that are mutually beneficial. Psychological manipulation does more harm and less good than just about any human activity or attibute of civilization. Psychological manipulation is a tool of exploitation. It can make people do things they would not ordinarily do because it can give them enough of a drive to compell them out of social inertia. Psychological manipulation is used to build groups where group behavior can take on a mind of its own that overpowers normal limits of morality and ethics of individuals. Sigmund Freud talks about group behavior as over riding the limits of super ego taking away restraits from breaking rules and compelling people to become part of a mob listening to what Freud calls the Id. Group psychology over rides every kind of personal restraint and limitation at the extreme. Fads become movements and movements become dangerous political circumstances left to uncontrolled emerging group psychololgy. The stock markets are an international mob scene and the pure manifestation of group psychology and always have been. There really is no way to prevent group psychology from taking hold of markets and to make them perfectly rational. All kinds of measures and regulations have been introduced to protect against financial panics and against stupid fads sucking money down rat holes. There is no evidence that , short of shutting down markets, that they can be made completely rational. Most market dynamics are as rational as the underlying economy so long as both buyers and sellers assess their personal reasons for trading. Markets begin not for abstract securities but for taking one commodity to a market created by you and exchanging it for products others create or havest. The idea that the purpose of Wall Street is for People to get rich is a complete misunderstnading from group psychology of why the markets ever exist. Some people can become a lot richer dealing with financial markets than others. Others don't belong there at all. Markets are there to raise or distribute capital, earnings and liabilities. They exist to spread risk and to transfer assets, ownership of buisiness concerns to a larger population that might not have any real reason to be involved. Wall Street is not a casino but it tends to advertise it self as one always making their biggest winners most visible at the same time minimizing the signficant number of loosers. There are 1000s of mutual funds, hedge funds, closed end funds , bond funds and etfs trading on stock exchanges. They all have one thing in common--the claim that they all exist to help investors. Casinos try to make patrons feel like they are winning when they are really loosing. Financial funds try to do the same in propsectuses. Few keep up with the general trend of the market indexes. ETFs have not proved to be able necessarily to do much better even if their holding costs are lower. Huge business ecologies have grown up around the basic idea that wall street style markets are there for compounding growth in annual returns. There is some truth to that because larger corporations have definate competive advantages than direct investment can have in businesses for one's advancement of investment returns. Wall Street plays up the greed and minimizes the fears except to tell propspective clients that they have themselves as their own managers to fear. Why hire a money manager at a signficant amount of money per year if you don't fear your own decision making abilities of hope go to take advantage of your own greed with professional ability to stastisfy the urges of greed. From Heath Foods to Financial Panic there is an unjustified comoditization of pyschology for financial gain. Group psychology is harnessed by mass media, brokers, managers and others with their own conflicts of interest most especially personal greed. Marketing panic is something we see everyday on Wall Street. Stock advisors, managers and brokers want to sell you what ever is hot at the moment. Special care is taken to besure something new is at the top of the menu every trading day. Anything bought can be sold for a new sales commission later. Greed tends to be sold to clients and fear thens to be bought back from them at much lower prices plus a commission payment. One can watch the harnessing of popular psychology in markets on a daily basis. You can see how Gold is marketed with a complex mixture of Fear and Greed. One is supposed to be fearful of all other potential investments at the same time one will find cold hard metalic blissful security owning physical gold. An industries exists in good financial times and bad financial times to sell gold year round. People don't need gold for much of anything save deocrative uses or for some theorized investment vechicle that may or may not exceed rates of inflation in the economy. Professional gold selling companies and professional gold buying companies dominate the market. It is rare for an owner of gold to be able to go down to a local flea market and sell gold out on the street. Gold brokers have a knack for being able to charge significant commissions on both buying and selling gold at face value so that it is alway more expensive to sell than to buy. The cost of selling only esculate if one joins the market place mob and follows the price up to the stratisphere only to decide to sell when every one else does at the exact same time. Gold brokrtd use tested mob psychology to sell Gold with a mixture of pre-packaged fear and greed. To sell to the customer the customer first has to be sold on the idea. For some reason market psyology of people prefer that people see that the price is already expensive before they decide they should get involved buying it. The more the price has already surged it seems the more people cant resist the glitter of Gold. This mob pyschology builds to a cresendo and a lot of investor money is ultimately going to be lost . The world supply of Gold may be limited but just a few less buyers in the market can quickly influence the daily prices. .