Don't panic - Profiteers at work
This Monday, workers across the world went to work just like every other day. However, everywhere they went newspapers, as well as radio and TV news reports, carried stories of the falling share prices on US and European stock markets. Even the Sun told us ``Don't Panic''.
So why should we panic and what was really at stake when the markets opened last Monday? Share prices collapsed on New York's NASDAQ and Wall Street's Dow Jones exchanges for some very simple reasons.
The exchanges are driven by billions of pounds of fickle speculators' funds driven by an insatiable desire for short-term profits
For the last few months, a range of dot.com companies selling internet and software services have been launching themselves on the NASDAQ exchange. They do this for two reasons. Firstly to realise in cash some of value of their company and secondly to finance expansion of the companies. The share value of many of these companies has far exceeded any realistic value you could place on the company. This did not, however, deter the companies who were launching themselves on the index or the finance houses who were selling the shares.
The second reason for the share collapse is that the exchanges are driven by billions of pounds of fickle speculators' funds fueled by an insatiable desire for short-term profits. Add to this thousands of online day traders and you have an international financial market driven by minute to minute events.
They are not taking account of the fact that real life is continuing around them and that workers are doing the same job they did yesterday. One day they are involved in a dot.com success story, the next day we are supposed to believe it is a disaster. One message should be made clear - ordinary workers are not earning the massive profits from these share launches, so why should they be expected to pay the costs when they fail?