18 July, 2008

Freeze The Prices!

Bloomberg reports:

Pakistan investors stormed out of the Karachi Stock Exchange, smashed windows and cursed regulators after the benchmark index fell for a 15th day, the worst losing streak in at least 18 years.

“I have lost my life savings in the last 15 days and no one in the government or regulators came to help us,’’ said Imran Inayat, 45, a protester and a former banker who retired early and said he lost 300,000 rupees ($4,175) on the market.

The article does not elaborate on who put a gun to Inayat’s head and forced him to invest his money in the stock market. Instead of calling on others to help him, the man should accept responsibility for his own actions. Did he really think the stock market is some kind of giant safe deposit box?

But the most WTF moment of the pieces comes towards the end:

“We demand that all stock prices be frozen at current levels,’’ said Kauser Javed, who heads the Small Investors Association.

Sigh. Prices, of course, are determined by supply and demand, by what people are willing to pay. If stock prices are falling and the government fixes them at an artificially high level, it will simply mean that those stocks will have no buyers, and their value will effectively be equal to zero. That will no doubt give Javed more cause to protest, and the gent might then demand that the government put together a rescue package for the small investor. Such fun all this is.

(Link via email from skthewimp.)