62/YOUR MONEY OR YOUR LIFE!
company's stock varies, but it is usually large enough to have definite
influence over the decisions and strategies of the industrial concerns
in question.
Having bought up company stock on the various stock markets,
institutional investors carry tremendous weight in the overwhelm
ing majority of MNCs. To such a degree, in fact, that they can have a
decisive say over what these MNCs can or cannot do.
Institutional investors have a well-deserved reputation, according
to a Brussels operator. They are often responsible for major
movement at the Brussels exchange, he says. When they are
unhappy, they sell and go elsewhere in Europe. And this has an
immediate impact on share prices. (Eco-Soir, economic supplement
to the Belgian daily Le Soir, 17 February 1995)Institutional investors demand quarterly dividends that are at least
on a par with the rate of interest. Fearful that pension funds and other
institutional investors will sell off their shares, companies often decide
to tone down productive investment and step up efforts aimed at
obtaining short-term profit.
Not that those in charge of industrial houses are any worse for
wear. The president of Elf Aquitaine, for example, declared, 'Share
prices are a measure of a company's virtue.' A few years later, this
same president, Loi'c Le Floc-Prigent, was under investigation by the
courts and arrested for embezzlement. He apparently had his own
very special notion of 'company virtue'.
Financial market players are driven by an inhumane logic. A drop
in the unemployment rate is now seen as a precursor to inflation, and
therefore of a drop in the yield of financial investments', notes Claude
Serfati. He adds, 'The social cost of keeping these rentiers happy is
very high indeed.' Of course, this applies to the North, South and East.
The Case of George Soros
In general, the identity of companies and multi-billionaires that
speculate is a well-kept secret. This creates an aura of mystery and
perpetuates the illusion that an untold mass of anonymous citizens
determine what happens on the world's markets. In fact, nothing
could be further from the truth.