Will the Disconnect Between Wall Street & Main Street Continue?

The Option SenseiThe Option SenseiMay 23, 2020

While the disconnect between Wall Street and Main Street seems as old as the creation of the stock market itself and has reached baffling proportions in the past few months, it didn’t really start out that way. The New York Stock Exchange (NYSE) was formed over 200 years under a tree by Wall Street, in what became known as the Buttonwood Agreement, in an attempt to establish some rules after the 1792 financial panic.

It consisted of some 24 stockbrokers and merchants signing an agreement establishing the parameters that they’d only trade with each other and represent the interests of the public, which meant that the confidence that they had in each other was the confidence that they had in the market. Meaning the success, or failure, of the merchants, AKA Main Street, would be the determining factor in how Wall Street valued the stock.

We’ve come a long way from this quaint notion; the progression from a true stock exchange which served the purpose of a pathway for companies to raise capital by allowing individuals to buy ‘shares’ as a manner of partaking in company growth and future profits to the dominance of large institutions to near-total financialization of stock-related securities has led to a large disconnect between Wall Street and Main Street.

The explanation or justification is the… Continue reading at StockNews.com

The post Will the Disconnect Between Wall Street & Main Street Continue? appeared first on Option Sensei.

Source: Option Sensei

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