the functioning of the market is dependent on everyone having faith that what is in the market is actually correct information. that's the entire reason the SEC was founded in the '30s, to restore confidence after 1929; if the market is believed to contain widespread fraud, then no one will invest and the market will essentially stop working.
as a counter example, the Chinese markets are rife with accounting frauds, scams and scandals; and the market doesn't really track with the Chinese economy as a result because no one believes it is accurate
bobthepanda|1 year ago
as a counter example, the Chinese markets are rife with accounting frauds, scams and scandals; and the market doesn't really track with the Chinese economy as a result because no one believes it is accurate