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Businesses around the world are forced to adjust the way they operate to meet the demands of equity investors. Yet very little has been written about how the modern global stock market came to be. Business news, company earnings, and the future prospects of an enterprise can all influence the price of a stock. Investors hope to buy their stock at a low price and sell their shares for a profit after they increase in value.

Banks suddenly offered “share loans” to people who had been considered unworthy of credit. Bank failures between 1950 and 1980 were never more than 20 per year; in 1985 there were 120, in 1986 there were 135.

Companies that sell stocks to investors usually do so in order to raise capital. The capital is then used for things such as financing current operations and paying for expansion plans. Companies issue stock to raise money. They use this money to finance expansions, pay for equipment or any other resource-intensive activity.

People use the equity in their home as a backdrop for all the other loans that they take out, such as credit card loans, student loans, car loans, small business loans. When they lose the equity in their home, as tens of millions have, they no longer have a fallback when they lose their job, have a serious illness or face some other financial setback. Personally, for optimal signals, I prefer the 25-day average to be between 0-35 for buys, and between 65-100 for sells. People like this have the power to mobilize enough money to cause a roller coaster effect within the market. If this were true it could be one of the most unconscionable acts in our history.

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