Without getting into a dissertation on Stockholm syndrome, it can be summed up as a psychological condition where hostages come to have feelings of empathy and/or sympathy towards their captors, sometimes to the point of defending them.The level of fraud in the financial system with utter lack of prosecution or accountability, combined with the ongoing love affair between the largest offenders and collective mainstream, results in financial media being a victim of the so-called Stockholm syndrome.
There have been many movies like In time,The running man,red etc (read the list of 22 best movies on stockholm syndrome here:
A financial market equivalent to Stockholm syndrome is not normally a problem in the relationship between rating agency employees and traditional debt issuers such as corporate treasurers. There is certainly potential for a conflict of interest, given that issuers pay for ratings; or simply for conflict, as borrowers complain that a rating downgrade was unjustified. The guidelines for the relationship are relatively clearly drawn, however.
I personally think the government helping out “too big too fail” financial institutions in the time of financial distress creates a moral hazard and is a serious symptom of stockholm syndrome in financail/economic markets.
Some shareholders have Stockholm Syndrome. I am short a company that is basically just stealing money from people. Deep down people know it’s true but they refuse to admit it and actually will publicly defend the company when short sellers write about the facts. Literally the shareholders will always fall back on the claim that the stock is “entertaining to own” even though the fundamentals are terrible and getting worse and the management team was previously nailed for fraud by the SEC. It’s very bizarre. Stock down 75% in the last 12 months, going to zero, and yet people cling to it like it’s the single greatest idea of all time. The only thing I can conclude is Stockholm Syndrome.
