Stock markets crash everyday!

Share Shah

Never again will the stock market crash! The gurus said so after the Wall Street debacle of 1929. Yet it happened again and again despite the setting of Securities & Exchange Commission and so many rules and regulations. It has happened all over the world and today it is probably happening somewhere on the globe.
   It is the nature of man which has not changed much in the last 10,000 years to keep on making the same mistakes. History repeats itself, they say. But then again the market has a strange allure which attracts men and accentuates greed of men. Everyday a bubble is made and eventually the effervescence bursts and men go about doing whatever they were doing.
   For a fraction of a moment men are attracted by the bubble and seem mesmerised by it. Like lemmings they follow the path of self-destruction. But has this knowledge stopped men from ever not taking a chance! Since the days of cave men whose psyche was not much different from many of us, we have been taking risks and shall continue taking risks despite the library of rules and regulations.
   To say that the crash of 1996 shall not be repeated is to say that history never repeats. Fortunately the scenario has changed, in particular the technology and to certain extent the nosiness of the regulatory body. But the ingredients of a bubble and the eventual crash are all there and will always remain so long as the concept of free market remains in our society. Albeit one may not expect an overall contagion across the board of listed companies which now may be unlikely because of the improved depth of the market. But we should never forget Murphy's Law.
   Every trading day we have over a dozen scrips which are heavy in demand. These are the top traded shares of the day. Each day these shares rise to new heights or plummet to low levels. If some new information real or imaginary comes then the share reaches newer levels. People rush to buy without considering the advantages or disadvantages of the new information. Nobody wants to wait. None want to take the chance of missing the opportunity. If regulators do not understand this human frailty then they should be regulating the fish!
   Often the information or rumour is kosher above-board. Many a times it is not genuine. Really the business of the regulator is to find those who spread such rumours or are taking fraudulent ploys to deceive the people. Probably the regulator can do little to stop the people who are bent on hurting themselves financially. The target of the regulator is specifically to endeavour to ensure that the public is not cheated as defined in our penal code.
   Unfortunately as we have seen in 1996 the highest body of the government had allured people into imagining that the stock market was the horn of plenty. No unlike today, the society and the media remain obsessed with the stock market. People saw the conflict of interest of people holding high office and were assured that if some ones son or daughter was trading then everything was all right. But the last straw was the regulatory impotence in allowing trading on the streets. Surely this has stopped but is not altogether impossible as long we have shares outside the depository system, and we have many yet to be included. Only recently we have seen the doings of the Privatisation Commission which has led to the squandering of wealth in trading shares of Rupali Bank. If anyone is to be blamed it is the Privatisation Commission which should be blamed solely for carrying out this farce against the people.
   Today we have no record of what really happened in 1996. What we have is a truncated version of whatever is in the memory of those who were around during the period. There are no local or international independent records. No version of experts or no hearings by the parliament. We have historical records of the "South Sea Bubble". We have detailed account of what happened in 1929, the mother of all crashes. We have the renderings of the US Congressional hearings. We have the book "The Great Crash: 1929" by Professor John Kenneth Galbraith on the history of the crash and his conclusion that it just happened.
   Then again we have Professor Shillers' book on "Irrational Exuberance" with detailed records of stock market crashes that have taken place in the 20th century. There is a list of stock market crashes, fallen prices in many countries of the world. There is deliberation on the cause and effect on the market because of such fall in price. We have the recent reports of large company fraud, such as the Enron affair, leading to a new emergence of corporate disclosures and good governance. But we have nothing, no record on what really happened in 1996.
   If one reviews the tables listed in Yale University's Professor Robert J. Shiller's book "Irrational Exuberance", one will have list of stock market crashes that have taken place in developed countries, in developing countries and in many places which has stock market. But one cannot find the crash of Dhaka or Chittagong Stock Exchange in this list. Thus the future will never know what this 1996 was about. Or perhaps all of us are dreaming that there was such a catastrophe as the market crash of 1996. In all probability it was the imagination of the government of the day to cover up their stupidity and find scapegoats to blame for something that never took place.
   In his book :The Great Crash:1929", Professor Galbraith sums up by stating "Even in such a time of madness as the twenties, a great many man in Wall Street remained quite sane. But they also remained very quiet. The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil. Perhaps this is inherent. In a community where the primary concern is making money, one of the necessary rules is to live and let live. To speak against madness may be to ruin those who have succumbed to it. So the wise in Wall Street are nearly silent. The foolish thus have the field to themselves. None rebukes them."

^ TOP OF THIS PAGE ^ MAIN PAGE

Holiday Desk

Singapore Health Services (SingHealth) - Singapore's largest healthcare group - and local Galaxy Healthcare have jointly launched the SingHealth-Galaxy office in the city last week. The service to be provided by the group was introduced to a cross section of the people prior to the opening of the office through a series of medical and consumer seminars in the city, featuring medical specialists from all healthcare institutions under the SingHealth Group.
   The latest treatment modalities in Singapore for spinal and knee surgery, heart conditions, adult and pediatric cancers, eye disorders, and diagnostic procedures were shared by the visiting experts with those who attended while the local doctors were also present during demonstrations.
   The health seminars were arranged to raise public awareness on increasingly common medical conditions and treatment options. SingHealth comprises three hospitals, five national specialty centres and a network of primary care facilities, which offer an integrated and comprehensive range of healthcare services to the patients. Each year, approximately 3.0 million (30 lakh) patients seek treatment at these institutions.
   SingHealth Group Chief Executive Tan Ser Kiat said: "In conjunction with the opening of the SingHealth-Galaxy office and the series of seminars, SingHealth has chosen Bangladesh as the first country to launch its privilege card for demonstrating its commitment to the Bangladeshi patients who are among the top 10 overseas patient groups at SingHealth institutions."
   The SingHealth privilege card provides the patients with exclusive 'privileges and discounts. The cardholders are entitiled to benefits such as discounts for health screening pack ages, and a complimentary sleeper bed for a companion in a private 'A' class ward at one of the SingHealth's healthcare institutions.
   "Both the medical and consumer seminars will extend our existing relationship with the Bangladeshi physicians and patients. We hope it will be the start of many more to come," he added.
   Galaxy Healthcare President and CEO Ahmed Yusuf Walid said that "Galaxy is p1eased on this collaboration with SingHealth. To mark the occasion we have organised medical seminars with SingHealth for our doctors to keep themselves informed of the latest developments in their specialized areas."
   He also said, "Galaxy will act as the main contact point in the city for the SingHealth Group. The office will help to facilitate all arrangements between the patients and SingHealth, such as providing information on available treatments and procedures, travel arrangements and taking appointments with the doctors in Singapore. Thus the patients can focus on getting cured, and their relatives can care for them without worrying about logistics and other matters."
   SingHealth's healthcare institutions, including the Singapore General Hospital, have a long history of training and educating doctors, nurses and allied healthcare professionals from the region. Between 1994 and 2006, the hospital's Post Graduate Medical Institute welcomed nearly 40 doctors from Bangladesh for clinical fellowships.

^ TOP OF THIS PAGE ^ MAIN PAGE