Re: "Some good news, finally" (Thanh Nien Weekly Issue No.90 June 17-24)
Circular 74, which will allow day trading and shares on margin, is not good news, as your headline loudly proclaims. It portends a disaster that will result from adopting the worst elements of casino capitalism. It also smacks of a failure to understand and learn from mistakes made in history.
We had a stock market in 1699 and its spectacular failure spawned a series of books that is well worth reading by financial authorities in this country. Just take one, "The Great Crash" by John Kenneth Galbraith. Professor Galbraith was not an opponent of capitalism. He was a supporter. That's why, along with some others, he wanted to eliminate its worst elements. So that it could survive. I say it can't, but in the meantime, why are China and Vietnam adopting all aspects of capitalism which supporters of capitalism themselves say are its worst elements?!
Galbraith said the 30s recession was elevated into a depression by the activities of speculators, in particular, speculators using debts. The classic example at the time was shares on margin. There were some other bad elements such as investment trusts which owned other investment trusts. Read the book! You will realize that derivatives, hedge funds etc., are merely his criticisms repeated in a vastly exaggerated form. I have many times referred to his sarcastic chapter: "In Goldman Sachs We Trust!" These are the people who, 80 years later, helped Greece hide its debts!
In your article you use the words "investors" fourteen times and "players" once. There is no such thing as an investor who is day trading on margin. Investors are long term. Short term traders, players and dealers are speculators. You have also quoted a number of "experts." Every single one of them was in the financial services industry. These are people who charge a commission every time a share is bought or sold and charge fees for managing funds. They are not in the investment business. They are in the speculation business. If we limited their activities to investment, about 75 percent of them would be redundant. Your "experts" don't want to be redundant. Now there's a surprise!
Your foreign "experts" don't want to be redundant either. Another surprise! Who do you think causes speculative bubbles if not speculators? What do you think they are, apart from parasites? Another thing the article mentioned was improving "liquidity." Yet another capitalist word for escalating debts. In the meantime, until we very belatedly start work on a better way of doing things, what we need is the exact opposite of Circular 74; we need 100 percent capital gains tax deducted at source for short-term investments.
Binh Thanh District, HCMC