Let’s say we just permanently shut down the stock market

[Blue3]

Let’s say we just permanently shut down the stock market.

It just doesn’t exist anymore.

As a result, there’s also no more Dow Jones, S&P 500, etc.

What would the impact be?
How would the economy change?
How would we measure the strength of the economy?

[Benjamin Frank 2.0]

That would make it harder for corporations to raise capital.
What do you think would be the consequences?

That would mean all businesses would be private which, I think, would have good and bad consequences. On the one hand, there would be no focus (or less of a focus) on quarterly profits, but, because there are practical reasons why businesses go public for money, that would likely mean there would be less businesses, so, almost certainly less wealth.

For ordinary people who invest in the stock market through their pensions and the like, that would very likely mean a loss of the best source for long term financial gain. Of course, it's likely that other forms would be worth more without the stock market, like bonds and bank term deposits.

Of course, if you included shutting down the Chicago Mercantile Exchange that would make trade in agriculture and commodities impossible until an alternative was developed.

Stock markets tend to not really be a great way to measure the strength of the economy as opposed to GDP and unemployment numbers, but I have a personal bias against 'the stock market' as a measure of the economy.

[PSOL]

"Local Communism", which is meh but not sustainable or ideal for a system that has to be worldwide to an extent that even Capitalism has never traversed before.

[Open Source Intelligence]

Let’s say we just permanently shut down the stock market.

It just doesn’t exist anymore.

As a result, there’s also no more Dow Jones, S&P 500, etc.

What would the impact be?
How would the economy change?
How would we measure the strength of the economy?

So everything would become private equity. Private equity exists now so it's not like business would collapse. (Every Silicon Valley startup are private equity.)

Venture capital would become even more important. Big companies would be even more under the stranglehold of singular investors than they are now.

There would be much less public transparency on business operations and finances, none of the rules the SEC has for publicly-listed companies would be relevant anymore so the size of that bureaucracy would decrease and they would then do mass layoffs.

People would have no easy way to use their wealth from working and put it into a retirement account. Alternatives would prop up and assuming that all the foreign stock markets were still around, you would see a more massive movement of American money into foreign business which would harm business here. (It cannot be said enough how much of an advantage the notion of IRA's and 401(k)'s have for businesses listed on the stock market in New York compared to their foreign competitors.)

Liquidity (price discovery by another name) would drop and the finances of big business in general would become more opaque and shady.

[Fmr. Pres. Duke]

Basically we'd all have to work till we're dead. So many people are dependent on the stock market to build wealth for retirement.

[Del Tachi]

Basically it would just make trading shares way more complicated and expensive, which would ultimately have the effect of pushing businesses to raise capital in other ways - presumably through private placements and the bond market (which is what happened before we had stock markets.)

[Benjamin Frank 2.0]

Let’s say we just permanently shut down the stock market.

It just doesn’t exist anymore.

As a result, there’s also no more Dow Jones, S&P 500, etc.

What would the impact be?
How would the economy change?
How would we measure the strength of the economy?

So everything would become private equity. Private equity exists now so it's not like business would collapse. (Every Silicon Valley startup are private equity.)

Venture capital would become even more important. Big companies would be even more under the stranglehold of singular investors than they are now.

There would be much less public transparency on business operations and finances, none of the rules the SEC has for publicly-listed companies would be relevant anymore so the size of that bureaucracy would decrease and they would then do mass layoffs.

People would have no easy way to use their wealth from working and put it into a retirement account. Alternatives would prop up and assuming that all the foreign stock markets were still around, you would see a more massive movement of American money into foreign business which would harm business here. (It cannot be said enough how much of an advantage the notion of IRA's and 401(k)'s have for businesses listed on the stock market in New York compared to their foreign competitors.)

Liquidity (price discovery by another name) would drop and the finances of big business in general would become more opaque and shady.

I didn't mention this when I posted on this topic because this isn't an area of expertise of mine, but isn't the purpose of either investment bankers (private equity) or venture capital to ultimately make their money by getting the companies they've invested in onto the stock market?

If that was no longer around, wouldn't either investment banking or venture capital go away as well?

[○∙◄☻¥tπ[╪AV┼cVê└]

Not all publicly traded companies are on major stock exchanges. Are you eliminating those too?

[Open Source Intelligence]

Let’s say we just permanently shut down the stock market.

It just doesn’t exist anymore.

As a result, there’s also no more Dow Jones, S&P 500, etc.

What would the impact be?
How would the economy change?
How would we measure the strength of the economy?

So everything would become private equity. Private equity exists now so it's not like business would collapse. (Every Silicon Valley startup are private equity.)

Venture capital would become even more important. Big companies would be even more under the stranglehold of singular investors than they are now.

There would be much less public transparency on business operations and finances, none of the rules the SEC has for publicly-listed companies would be relevant anymore so the size of that bureaucracy would decrease and they would then do mass layoffs.

People would have no easy way to use their wealth from working and put it into a retirement account. Alternatives would prop up and assuming that all the foreign stock markets were still around, you would see a more massive movement of American money into foreign business which would harm business here. (It cannot be said enough how much of an advantage the notion of IRA's and 401(k)'s have for businesses listed on the stock market in New York compared to their foreign competitors.)

Liquidity (price discovery by another name) would drop and the finances of big business in general would become more opaque and shady.

I didn't mention this when I posted on this topic because this isn't an area of expertise of mine, but isn't the purpose of either investment bankers (private equity) or venture capital to ultimately make their money by getting the companies they've invested in onto the stock market?

If that was no longer around, wouldn't either investment banking or venture capital go away as well?

The purpose of venture capital is to back something when it's small and sell it for huge. So a lot of Silicon Valley startups have done nothing but lose money their whole existence and requires VC to constantly push money in to pay the bills in the hopes of one day they get paid off. If you remove the IPO potential, there would likely be a lot less venture capital money out there or at the very least they would become more selective. It would make it so that instead of heading for an IPO, all those companies' only things they can aim for to get their money back is "we want a huge player to buy us" (think Facebook buying Instagram or Elon Musk buying Twitter). The notion of we start off losing ten million dollars and over eight years we fight through, break even all with the same owners, and become profitable in the long run, that's not how it works.

You'll never get rid of investment banking and in fact it would probably become more important as they would have greater expertise to guide depositors through how to invest in private markets.

At a county fair I talked to an individual that said "he was rich off the internet" and when he decided to help my party out for our county elections, whipped out $1000 worth of hundred dollar bills right there for a campaign donation. Talking to him at a later point in time, he talked about work he had done in the soda/energy drink market and the only strategy anyone has in that business is become semi-successful marketing your drink on a niche level, and then Pepsico or Coca-Cola will buy you out just so they don't lose market share. It's kind of the world we live in.

[DK_Mo82]

I dont understand the question, what happens to everybody money that is already there?

[Open Source Intelligence]

I dont understand the question, what happens to everybody money that is already there?

They would still own the company. They just don't have an exchange to sell their ownership of it and would have to arrange that privately. People that are passive investors in ETFs would be lost...