Because the fucking billionares and Trump keep fucking with the markets, and because the top companies are colluding to fix prices and nobody fucking does anything
Has nothing to do with European capital markets. Not everything is about US politics.
And you think Europe doesn’t have its own share of obscenely rich people, corruption, anti-competitive behaviour and market manipulation?
No, the US is not a liberal democracy anymore. But Europe has functioning liberal democracies. That’s why billionaires like Musk fund a media war against the European Union and portray European cities as dangerous Muslim slums.
You say that as if were not also sending genocide weapons to israel, and as if we dont have our fair share of nazi politicians… We’re just slightly better than the US in my eyes
There is research that ranks democratic integrity across countries. Maybe base your impression on systematic evidence?
Clearly it’s very important whether the extreme rightwing is the governing party. If anything, that’s what German history should have taught all of us
“It’s more the fact that in America, because you don’t have state guaranteed pay-as-you-go pension schemes, anyone who works and who needs to think about his old age needs to directly be engaged in thinking about investing in capital markets.”
Ah yes, famously something we really love in NA. A system that gave us 50% pop with no retirement savings across US and Canada. You def want that!
Serious - not saying integrated capital markets aren’t needed but the NA neoliberal pension model is not something that’ll encourage social stability.
I believe people overestimate the difference between “state pensions” and “capital markets pensions”.
- State pensions: People pay taxes and retirees get money from taxes. How much is mostly determined by how well the country’s economy is doing.
- Capital markets pensions: People buy shares and retirees get dividends or sell shares. How much is mostly determined by how well the economy is doing.
The differences are more subtle. For example, the capital market is not constrained to the country but one can invest globally. However, the capital market is constrained to the economy of public companies whereas all companies pay taxes. With state pensions, is a little less determined by the economy as a state is more free to redistribute money than fund managers.
You can’t be saying this shit after the money stolen by the spacex IPO
Indeed. Seems there’s not many who have understood that heist.
If you’re worried about corruption affecting 401ks, you should look at the corruption inside state pension funds.
There’s other less subtle differreces with the pensions-on-the-capital-markets model in North America. It really is you-manage-your-own-savings model.
That means you decide to contribute something, or nothing. This is a big problem because this money can be extracted by businesses via higher prices and marketing. As prices go up people spend more of their wages to cover expenses with less and less remaining for savings. This is the largest reason for 50% of Canadians and Americans having no pension savings.
The other significant difference is that you decide exactly what to do with those savings, buy a diversified ETF or GameStop, the whole casino is yours. This means everyone has to do the same work of learning, reading, not being wrong, not fall for legal scams of which there are plenty. And if you happen to be unlucky to be of retirement age in 2008, you end up working till you die. I had a colleague while working at one of the big Canadian banks that lost his savings like that so he couldn’t retire. The time and ability to manage retirement investment is not the same between some who works in finance, a grocery store cashier, a brick layer and a dedicated pension fund professional.
This is the reality that most of us live with here. Some lucky bastards have the old school defined benefit pensions that their employer contributes money to and manages (either internally or through a dedicated fund management entity). Those don’t suffer from either of these issues and such pensions are often invested in capital markets and other things. For example the Ontario Teachers Pension Plan. That scheme works fine but most companies that had it got rid of it cause it’s more expensive than dumping all the risk to employees.
European countries are not imitatng the Anglo model but the Scandinavian model. It’s like high return retirement savings combined with social equalisers
I really hope you don’t let them imitate it, cause this didn’t happen by accident over here. There’s a lot of money to be made by the finance sector if people are forced to put their pensions into the capital markets. And this isn’t me just babbling from the other side of the Atlantic in abstract. I hold an EU passport and I sincerely hope shit doesn’t turn like it did here.
Check the numbers over the last century or so.
To me the problem is ideological. If you buy the a world ETF - like WEBG - 60% of the stocks in it are American. You read all the news about those companies being shitty and yet to get the best return on your income you need to invest in them.
There’s also CEUG (EU stocks without “unsustainable” companies, from European company Amundi) but then you balance with other regions and it’s “wrong” to have 100% home bias.
I remember once a night train startup mailed me that they are issuing bonds to help fund opening new connections. That was cool, as opposed to investing in Nvidia. Then again, investing with your heart is not the most minmaxed, so it’s wrong.
There is “wrong” and there is “different”.
An investment strategy is “wrong”, if it just gives lower returns or higher risk. For example, more diversification gives you equivalent returns for less risk, thus not diversifying is wrong.
An investment strategy is “different”, if it lowers financial returns in return for something else. For example, you want to intentionally lower risk or not invest in evil companies. There is nothing wrong about that. You can invest with your heart, just be aware of the lower returns.
Donations can be considered a “different” investment where the financial returns are zero. In return you “save the world” a little.
31% of webn is tech. It’s a good ride so far but too sketchy to me. There is stoxx 600 which is still gives good ROI, European and has only 8% of tech.
“Sitting idle” is also known as “saving”
That’s not what happens with your savings at a bank, its just that you don’t make money from them.
You also don’t lose them when an investment goes south
But you lose them if the bank’s investment goes south, apart from a small specially secured part.
In Switzerland it’s 100k per person per bank. So Swiss people can have millions actually secure, if they put no more than 100k per bank.
Not in the US. FDIC insures deposits up to $250k per person per bank.
If your savings account pays 0% interest, consider switching banks.
Why do you care? It’s other people’s money, they decide what to do with it.
This is the kind of neoliberal ideology Europe suffers from. It’s not individuals making these investment decisions.
People aren’t deciding to leave their money in their bank accounts? I don’t understand what you’re saying.
Europeans have to put a large part of their money into a system with pensions and insurances. The organizations that handle those savings then make the decision on what to do with them.
Ah yes, but they invest it? In my country it’s even a problem that there is such an immense amount of capital in the pension funds, that they must invest it in safe assets, that they drive up prices of real estate to unreasonable levels
A 37€ trillion invested would mean a 37€ trillion would want a return on that investment too. Depending on who invests in what and the expectations they have it could be a net negative for society where the working class is squeezed even harder for profits. Best case scenario is 37€ invested and „lost“ paying wages right now. That would be the true trickle down effect. But no one would want to invest with those expectations.
Right now markets seem really random with increasing prices and shrinking demands. Everything seems very risky at the moment. Is it really a good time to invest when the orange man could invade yet another country any second? When everyone understood AI is a dangerous bubble? Look at South Korea.
Stupid money? No, not good.
I like to invest my time and energy in people. I still have to learn to also invest money in people.
But the capital market can never be more than a second best option, or third…
Well, if you have a friend looking to start a business, try out being an investor for them… It’s not too stressful
