Specifically, there are calls for registration of investment partnerships.
Then there's this morning's Asahi Shimbun editorial (January 27). Sai-tei! as the kids say. "It starts out real slow, then sorta peters out altogether." (You can tell I'm from the Woodstock Generation, huh?)
But seriously, friends. The main theme was that the recent "Live Door shock" had reduced trust in the stock market. Yeah, sure---but that's a good thing. People were starting to think like this bull market would go on forever. The stock market, and especially growth stocks, are not about safety. It is not the job of the exchanges or the government to take the risk out of the market for risk! But that was the tenor of the editorial, as if the risk was from frauds.
It's not. The risk is risk, that's all. In the current market, there are a lot of newbies overexposed to risk. But (aside from the number-fudging, plausible deniability, and outright lying) most of what Live Door did---right out in public!---should have your typical housewife with a 500-man-en nestegg shrieking "Run away! Run away!" 100-for-1 stock splits? Something's going on ... and it's pretty obvious what when you observe the split stock climb back to near pre-split price per share in a matter of a couple weeks. "Fillet of newbie! Oishiiiiiiii!"
I'm sorry, but you cannot protect "investors" like that from themselves. We shouldn't try. "Millions for education, but not one cent for mollycoddling."
100-for-1 is pretty nuts, but you can imagine 20-for-1, especially in the "Diner's Club Card or you can't play" end of the Japanese stock market, where a single share may cost more than a new car. If the company decides to act like a public company instead of an exclusive country club, it's going to need a big split to get price down to a reasonable level. On the other hand, even a 2-for-1 split is a swindle if the rebound alone causes the market value of the company to double in fortnight. So it's not just hard to decide where to draw the line, the line simply doesn't---and in principle, can't---exist.
The Asahi's proposed remedy was a Hairy-Chested Guardian of the Markets "along the line of America's Securities and Exchanges Commission." Now, I have all the respect in the world for the SEC. They do a hard job, they do it well, and they take a lot of undeserved crap (as well as their share of well-targeted criticism) for it. And they are a hairy-chested regulator with well-defined delts. But that's the example that proves the whole idea is bogus!
The SEC is the best candidate for the job, but the SEC would not have prevented the "Live Door shock". They didn't prevent the Enron shock, did they?
So, students, for your homework, write "Equity is risky" one hundred times (longhand, and no fair using macros!) Memorize it. Take it to heart. Then go buy stock anyway! There are ways to mitigate the risk, and you don't need to have a portfolio of 100% equity. Learn about investing, and have a safe and profitable time!