Finance is not capitalism

I've long thought that Wall St. and capitalism were two different entities. Wall St. is almost exclusively about moving money around, not about raising money to put into businesses that provide goods or services. The latter is secondary to Wall St.

Today I read/saw a good distinction in "An Unexpected Fate for Occupy Wall Street". Lee Munson, author of "Rigged Money: Beating Wall Street at Its Own Game", was interviewed on Yahoo Finance's Breakout.


Munson said that "finance is supposed to be grease for the wheels of capitalism." Now capitalism is a tool of finance.

One of the comments was on buying IBM shares long term is not investment. My response was

"It's a personal investment in that you hope someday somebody will pay you more for your IBM shares than you did. IBM gets no new money. Your buying IBM shares gives liquidity to a previous buyer. Liquidity of shares does make it easier for IBM to borrow money or to issue new shares."

Another interesting comment was "New name for Wall Street: FRAUDWAY".

Oh, about Occupy Wall Street, Munson thinks it will evolve to be a watchdog group by 2013.

See also "Beginning of the end of finance as we've come to hate it?"