The Primacy Of Capital Market
The Primacy Of Capital Market
The economic crisis of 2008 actually could have been avoided if the flow of funds to spur supply housing sector using the instrument-based financial stocks and/or bonds. Not to rely on the means of derivatives. Both the stock and bond instruments have advantages, i.e. in terms of transparency. Whereas the instruments do not yet have a standard raw derivatives in terms of transparency. Similarly, the rules applied in the world capital market and bond market so tight, so everything works under the law or
In addition, the level of efficiency and productivity of the housing sector that was built through the market mechanism is much better and more secure than other markets. Consequently, the pool of funds from the capital markets are really creating a sufficient economies of scale. Thus, a banking capital markets use the funds effectively for the construction of the housing sector is not only going to produce an efficient source of funding but also able to give a very broad impact follow-up.
Other advantages of the construction of the housing sector-based capital markets is no terpsichorean in capital and production factors in the effectiveness of the use of capital thus increasingly effective and efficient. An almost homogeneous price conditions could be kept and maintained in the housing market-based capital market.
Here’s what could avoid the housing industry from economic bubble or bubble. It supported again by the Konstantine between house prices and the stock price of the property sector. Antisepsis condition can occur when the stock price drop property does not run with the price of the property itself so that it requires intervention to prevent the occurrence of the condition of the market bubble.
Kahneman and Tversky (1974) reminds will risk in trading shares of transferability. Kahneman is finally getting the Nobel Prize in Economics. Stock trading in fact is the personification of the theory of Capital Asset Pricing Model (CAPM) where risk can be defined as the risk of the individual and systemic risk. Kahneman has finally received the Nobel Prize in Economics.
Housing Authority of China, for example, try applying the upper limit of the price of the House. That step is necessary when the economy of the people in the country – as seen from the per capita income — not yet in a position to take off as said by Rostow. Or when the lack of income per capita is also very wide. That’s what’s forgotten by the authorities of housing in the United States.