News & Analysis

FTSE 100 down to 3-month low as the man in the street takes back his freedom

Andrew Saks, Monday, 19 July 2021

London's prestigious FTSE 100 index has been flying high for the past three months, basking in a continued flow of investor confidence despite the endless cowering to the government's draconian lockdown by a massive percentage of the previously working population and a horrifying economic disaster worse than any recession experienced on British soil in 300 years.

As adversity and fiscal calamity claimed many smaller businesses, the large corporations at the very top of the tree have prospered, growing a divide between what is now known as 'big government' and its closely allied corporate sectors 'big tech,' 'big pharma', 'big data' among others, and the smaller, more entrepreneurial business sectors operated by free thinkers who the government and the large corporations have an equal interest in suppressing.

If we really do now live in an age of corporate socialism, this is it. The massive contracts handed out with the carefree abandon of a blank check to government allies such as Serco, a London Stock Exchange-listed contractor which provides government services and whose stock has been rising substantially during the lockdown period in which the government has handed watertight contracts to Serco as part of the implementation and enforcement of lockdowns against small businesses, are testimony to that.

Dido Harding, a life peer of the incumbent government and wife of an elected Member of Parliament, who was removed from her position as CEO of telecommunications company TalkTalk in 2017 following a cyber-attack during which personal and banking details of up to four million customers were exposed, has been handed massive Test and Trace contracts since being appointed into the state-funded role.

There is also the relationship between large pharmaceutical companies and the government. Nobody had really heard of AstraZeneca or Pfizer before the end of last year, and those who had heard of them perhaps associated them with fertilizer for the garden available at hardware stores such as B&Q rather than leading stocks and centerpoints of the British economy. Now they are all over the television, on various billboards and in every aspect of public life, due to government contracts to buy their products en masse. That is the power of government involvement with big corporations.

These are just some of many examples of how big government and big corporations are often intertwined in today's system, hence the confidence by investors in the FTSE 100 index, and largely the reason why it has been over 7,000 points for a very long time.

Academic philosophy on this matter, which has largely been suppressed in recent months, details the argument that 'socialism for the rich and capitalism for the poor' is a classical political-economic argument asserting that, in advanced capitalist societies, state policies assure that more resources flow to the rich than to the poor, with of the most commonly raised forms of criticism being statements that the political economy favors large corporations to the extent that it allows them to privatize profits and socialize losses.

Seasoned traders and analysts know this well, hence the rising value of the FTSE 100 against a backdrop of fiscal calamity in most other areas.

Today, the FTSE 100 has gone down by 83 points at open of business, perhaps because the public have finally stopped being afraid of the government and that there is a real possibility that they may push back against any attempt at restricting their activities from now on, leading to less opportunity for big corporations to collude with the state to remove liberties and livelihoods from the masses and the self-employed.

Additionally, FTSE Russell has launched an internal review into the rebalancing frequency of its widely followed family of US stock indices.

The benchmarks, which are followed by about $9 trillion of investors’ money, currently only rebalance once a year.

Nasdaq said a record 2.37bn shares listed on its exchange, with a combined value of $80.9bn, traded in 1.97 seconds on June 25 as it executed the closing cross for this year’s Russell reconstitution, up from 1.57bn shares worth $56.7bn last year.

This may be a different arm of the FTSE entity, but it does show that there may well be changes on the horizon.

If we are now beginning to witness the end of the iron fist and the reinstatement of free enterprise, perhaps we will be able to see by the FTSE 100 movements how similar these large firms are and the confidence in them is, to that of the government.

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