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Townhall Finance
Tell
Jamie Dimon to Tell
Eric Holder to Tell Obama I Found Those Jobs That Are Missing
by John Ransom
Oct 03, 2013
Burlington stores and
RE/Max both had very good IPO debuts this week. It's been quite some
time since I can remember the IPO market being significant to the
point were two new issues were able to have good days on the same
day.
Getting past the bubble
conspiracy theories about the IPO market, and the overheated rhetoric
about overheated markets, there's a bigger issue which often goes
unnoticed even by Wall Street.
IPO markets are the most
important markets ever.
Here's why: The IPO market
and the secondary market are the very reasons for the stock markets
to exist in the first place. So, to some extent, I look at the IPO
market as a way of measuring the health and vitality of the rest of
the market.
And if we are speaking
strictly numbers, the health and vitality of the market has never
been worse.
Ever. Ever as in the last
decade. Or two.
Sarbanes-Oxley and a couple
of other misguided "reforms" have effectively tamped down
on both the IPO and the secondary market restricting capital the
companies that most need it. And it's ironic that at the time that
the rest of the world is increasingly embracing capital markets, that
the United States would be heading in the opposite direction.
Since 1993 the total volume
of IPOs offered through 2011 has shrunk by $4 billion while the
number of offerings fell from 509 IPOs yearly to 81 yearly over the
same period.
What these numbers mean, is
that over a period of time when world wealth was growing from $25
trillion to $64 trillion, the number of initial offerings on what are
supposed to be the greatest financial markets in the world-- USA,
USA!!-- fell by 84 percent.
And 1993 was not one of the
go-go 1990s years in the stock market either. Instead it was a stock
market coming out of recession at 3,435 on the Dow Jones.
That ladies and gents is
where our jobs have gone.
Quick, tell Obama.
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