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Lecture 29
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Lecture notes for lecture 29.
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Local-Global Geographies Of the Financial CrisisLocally originate, locally distribute vs locally originate, globally distribute
The function of the stock market is to establish the value of corporate shares
Stocks are issued by companies to raise capital
oRepay investors w/ dividends; not debt
Until the 1970s: mostly national and oligo/monopolistic stock exchanges
oFollowed Fordist ROA/MOSR
Toronto Se has not had trading floor since 1997
oVirtual, floorless trading system
Bonds and bond markets = forms of debt whereby individuals invest by buying some of the debt
Derivative markets: purchase insurances to hedge against future or potential volatilities
oAirlines trade in fuel derivatives so that they can plan on how much fuel will cost
Post 1970s:
oEnd of Bretton woods era: deregulation of financial activities, competition between for-
profit stock exchanges
oMNCs: more cross-listings on foreign exchanges in order to tap into more capital and
increase visibility
oNew tech (virtual trading floors) = difficult for regulatory framework to keep up
Increasing speed and differentiation of transactions
Pre 1970s: national regulation agencies regulated htepackages of investment
and each transaction
oCapital becomes hypermobile:
Increased volume and velocity of transactions
24 hr stock mkt clock
World’s largest stock exchanges:
oNYSE
oNASDAQ
oTokyo Se
oEuronext
oLondon SE
oHong Kong SE
oShanghai SE
oToronto SE
oShenzen SE
oFrankfurt SE
DWA: World’s best known composite index
oAverage that reflects value of largest 30 US companies
o1980s + 1990s = tech bubble and intense growth
Boom market
o2001: tech bubble burst, further precipitated by 9/11
o2002-2006: housing bubble
o2007-2009: financial crisis + great recession
DWA contracts by ½Powered by TCPDF (www.tcpdf.org)
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