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Why do you value the idea of preventing people from meeting demand for a good or service? You are advocating for some magical price point that is morally virtuo

Why do you value the idea of preventing people from meeting demand for a good or service? You are advocating for some magical price point that is morally virtuous regardless of the context and dynamic nature of supply and demand. Why? Why do you think that is better than actually incentivising people to satisfy demand by increasing supply or alternatively to signal to those people making irrational decisions that there is a cost to the irationality? You are choosing to create shortages and encourage irrational purchasing behavior because it is better to "inflict a social cost". I just don't understand that tradeoff.

salawat 7y ago
Arbitrage does nothing to solve any issues in a situation of universal demand. What these people do is not satisfying overall demand. It's taking from one place, and reallocating to another output earmarked for distribution to a particular geographic area. They create problems ascertaining realistic supply and demand. If you cannot understand why this type of middleman profit-taking centric arbitrage by which no product is created but merely has it's destination altered via people looking to move the supply to the highest bidder, I don't know what to say to you other than you are clearly not thinking with the best interests of those where you're raiding that stock from. There was no shortage until these speculators created it. And no, the production, was fine, or would have been less problematic without their intervention. Information does not magically propagate. The manufacturer has to receive orders through their customer's acquisition processes; which is triggered through the data that feeds them. In order to have an accurate forecast of what real affordable growth they can manage to fund or pull off goes into their (the supplier's) calculation of backlog time and CapEx to satisfy demand for new equipment or hiring, which influences what they can commit to, which then feeds back intopurchasing decisions by retailers, as well as requiring them to forward the orders to their suppliers, and so on and so forth. None of that gets done lightly or pivots on a dime, rendering disruptive arbitrage transactions as a highly destabilizing occurrence to the supply chain that only ends up being made obvious through careful analysis of data exterior to the in-place logistical chain. Something no directly involved actors tend to specialize at doing, seeing as they are the typical supplier. Furthermore, seeing as these people failed to make arrangements in the sense of properly batching their shipping, the energy cost per delivered goes through the damn roof. If you want to solve increased demand, you go to the supplier directly, and get in line. You don't arbitrarily make the decision for an entire town that they don't need those supplies their demand facilitated the staging of at the local Dollar Store, and schluff them off elsewhere because you want an effing 3.5 to 7x profit factor. Not when everyone everywhere needs it at the same time. This isn't a case of statistical multiplexing. There is no "well they don't need it as much as we/they do." When probability is unity, you spread your finite supply of mitigation of new viral spread as far and thin as you can in order to slow the viral propagation as much as possible, and damp it's intensity as low as you can overall; the more "holes" you create by arbitrage buying, the more vulnerable and intense will be the resulting propagation of the disease through the locale. It isn't my fault these people can't seem to grok higher order consequences well enough to realize they should have left well enough a-damn-lone. Nor is it my fault you seem to think the laws of physics can be bent by throwing enough money around. It's a bloody crisis man. Information and supplies being where they need to be saves lives. Not sticking your %;&_ in everyone else's slice of the bloody logistical pie! These aren't securities! These aren't "potential value". These are physical lots on which people's lives will be dependent upon. There should be a damn social cost to this destabilizing behavior, because it's like being a damn agitator in an already on the brink confrontation. We cannot afford for everyone to engage in this type of behavior throwing off everyone else's capability to plan and smoothly execute a bloody response which doesn't upset the overall allocation of finite human capital too disruptively. You want to engage in arbitrage and play "the Free Market cures all ills"? You do that with your own community. Don't go and start ransacking everyone else's supplies, and expect everyone else to clap you on the back and say "Good on you, lad! Making all that profit! Hell, I'll miss Gram/Mom/Dad and I'll have to figure out how to pay Little Johnny's/Jane's/my wife's emergency room bill due to not getting my hands on some sanitizer/masks for them, but I'm pleased as punch you managed to eke so much more profit selling that product that we through our purchasing habits managed to keep stocked at a local business we fund as a support to the logistical needs of our own community. Bloody genius move!" I'm not the one encouraging irrational behavior. You are, by applying magical thinking to just how all that signalling has to get translated before any meaningful intervention can take place. I know what these systems look like. I know as much gets done as it is within the capability of the people making up the chain can manage to sift through, and I damn well know how disruptive particularly egregious acts of greed can change the logistical landscape because of the long-cycle nature of the signalling and pattern recognition. Thankfully, we have this wonderful communication network, and mechanisms for modifying human behavior through social pressure and legal processes to be able to short-circuit these malevolent practices before things get too chaotic or too much damage is done!
- gwright 7y ago
  > You want to engage in arbitrage and play "the Free Market cures all ills"? You do that with your own community Free market is already solving this problem. I was at my local store today and they were restocking the shelves with TP and paper towels. There was no line. You seem to have completely missed my point that the price surge should have been happening in the regular stores. By not raising their prices, the stores enable the hoarding, speculation and secondary market nonsense you are blabbering about. By threatening to fine vendors when they raise prices, the government enables these arbitrage schemes. By arguing as vociferously as you are that the market can't solve these problems you also enable these schemes because this attitude changes the nature of the regular market in favor of these ad-hoc markets. You and many like you seem to think that being in favor of price surges is the same thing as being in favor of the hoarding and speculation. But that is not true. I also am not arguing against sellers choosing to limit quantities, that is their prerogative. I'm arguing against government intervention when the market will address this all on its own. The Mayor of New York City seems to be in your club. He is arguing for the nationalization of industries to solve the shortages (https://townhall.com/tipsheet/bethbaumann/2020/03/14/de-blasio-wuhan-virus-is-an-example-of-why-the-feds-need-to-take-over-crucial-f-n2564945 https://townhall.com/tipsheet/bethbaumann/2020/03/14/de-blas...). > Thankfully, we have this wonderful communication network, and mechanisms for modifying human behavior through social pressure and legal processes to be able to short-circuit these malevolent practices before things get too chaotic or too much damage is done! > Information does not magically propagate. The manufacturer has to receive orders through their customer's acquisition processes; which is triggered through the data that feeds them. Which is it? Information does or doesn't propagate quickly? > I'm not the one encouraging irrational behavior. You are, by applying magical thinking to just how all that signalling has to get translated before any meaningful intervention can take place. https://www.forbes.com/sites/amyfeldman/2020/03/12/how-kochs-georgia-pacific-one-of-countrys-biggest-toilet-paper-makers-is-responding-to-coronavirus-panic-buying/#2a22b64b797b https://www.forbes.com/sites/amyfeldman/2020/03/12/how-kochs... https://www.wsj.com/articles/one-companys-hands-on-effort-to-ramp-up-sanitizer-production-11584151663 https://www.wsj.com/articles/one-companys-hands-on-effort-to...
  - salawat 7y ago

salawat 7y ago

Arbitrage does nothing to solve any issues in a situation of universal demand. What these people do is not satisfying overall demand. It's taking from one place, and reallocating to another output earmarked for distribution to a particular geographic area. They create problems ascertaining realistic supply and demand. If you cannot understand why this type of middleman profit-taking centric arbitrage by which no product is created but merely has it's destination altered via people looking to move the supply to the highest bidder, I don't know what to say to you other than you are clearly not thinking with the best interests of those where you're raiding that stock from. There was no shortage until these speculators created it. And no, the production, was fine, or would have been less problematic without their intervention. Information does not magically propagate. The manufacturer has to receive orders through their customer's acquisition processes; which is triggered through the data that feeds them. In order to have an accurate forecast of what real affordable growth they can manage to fund or pull off goes into their (the supplier's) calculation of backlog time and CapEx to satisfy demand for new equipment or hiring, which influences what they can commit to, which then feeds back intopurchasing decisions by retailers, as well as requiring them to forward the orders to their suppliers, and so on and so forth. None of that gets done lightly or pivots on a dime, rendering disruptive arbitrage transactions as a highly destabilizing occurrence to the supply chain that only ends up being made obvious through careful analysis of data exterior to the in-place logistical chain. Something no directly involved actors tend to specialize at doing, seeing as they are the typical supplier. Furthermore, seeing as these people failed to make arrangements in the sense of properly batching their shipping, the energy cost per delivered goes through the damn roof. If you want to solve increased demand, you go to the supplier directly, and get in line. You don't arbitrarily make the decision for an entire town that they don't need those supplies their demand facilitated the staging of at the local Dollar Store, and schluff them off elsewhere because you want an effing 3.5 to 7x profit factor. Not when everyone everywhere needs it at the same time. This isn't a case of statistical multiplexing. There is no "well they don't need it as much as we/they do." When probability is unity, you spread your finite supply of mitigation of new viral spread as far and thin as you can in order to slow the viral propagation as much as possible, and damp it's intensity as low as you can overall; the more "holes" you create by arbitrage buying, the more vulnerable and intense will be the resulting propagation of the disease through the locale. It isn't my fault these people can't seem to grok higher order consequences well enough to realize they should have left well enough a-damn-lone. Nor is it my fault you seem to think the laws of physics can be bent by throwing enough money around. It's a bloody crisis man. Information and supplies being where they need to be saves lives. Not sticking your %;&_ in everyone else's slice of the bloody logistical pie! These aren't securities! These aren't "potential value". These are physical lots on which people's lives will be dependent upon. There should be a damn social cost to this destabilizing behavior, because it's like being a damn agitator in an already on the brink confrontation. We cannot afford for everyone to engage in this type of behavior throwing off everyone else's capability to plan and smoothly execute a bloody response which doesn't upset the overall allocation of finite human capital too disruptively. You want to engage in arbitrage and play "the Free Market cures all ills"? You do that with your own community. Don't go and start ransacking everyone else's supplies, and expect everyone else to clap you on the back and say "Good on you, lad! Making all that profit! Hell, I'll miss Gram/Mom/Dad and I'll have to figure out how to pay Little Johnny's/Jane's/my wife's emergency room bill due to not getting my hands on some sanitizer/masks for them, but I'm pleased as punch you managed to eke so much more profit selling that product that we through our purchasing habits managed to keep stocked at a local business we fund as a support to the logistical needs of our own community. Bloody genius move!" I'm not the one encouraging irrational behavior. You are, by applying magical thinking to just how all that signalling has to get translated before any meaningful intervention can take place. I know what these systems look like. I know as much gets done as it is within the capability of the people making up the chain can manage to sift through, and I damn well know how disruptive particularly egregious acts of greed can change the logistical landscape because of the long-cycle nature of the signalling and pattern recognition. Thankfully, we have this wonderful communication network, and mechanisms for modifying human behavior through social pressure and legal processes to be able to short-circuit these malevolent practices before things get too chaotic or too much damage is done!

gwright 7y ago
> You want to engage in arbitrage and play "the Free Market cures all ills"? You do that with your own community Free market is already solving this problem. I was at my local store today and they were restocking the shelves with TP and paper towels. There was no line. You seem to have completely missed my point that the price surge should have been happening in the regular stores. By not raising their prices, the stores enable the hoarding, speculation and secondary market nonsense you are blabbering about. By threatening to fine vendors when they raise prices, the government enables these arbitrage schemes. By arguing as vociferously as you are that the market can't solve these problems you also enable these schemes because this attitude changes the nature of the regular market in favor of these ad-hoc markets. You and many like you seem to think that being in favor of price surges is the same thing as being in favor of the hoarding and speculation. But that is not true. I also am not arguing against sellers choosing to limit quantities, that is their prerogative. I'm arguing against government intervention when the market will address this all on its own. The Mayor of New York City seems to be in your club. He is arguing for the nationalization of industries to solve the shortages (https://townhall.com/tipsheet/bethbaumann/2020/03/14/de-blasio-wuhan-virus-is-an-example-of-why-the-feds-need-to-take-over-crucial-f-n2564945 https://townhall.com/tipsheet/bethbaumann/2020/03/14/de-blas...). > Thankfully, we have this wonderful communication network, and mechanisms for modifying human behavior through social pressure and legal processes to be able to short-circuit these malevolent practices before things get too chaotic or too much damage is done! > Information does not magically propagate. The manufacturer has to receive orders through their customer's acquisition processes; which is triggered through the data that feeds them. Which is it? Information does or doesn't propagate quickly? > I'm not the one encouraging irrational behavior. You are, by applying magical thinking to just how all that signalling has to get translated before any meaningful intervention can take place. https://www.forbes.com/sites/amyfeldman/2020/03/12/how-kochs-georgia-pacific-one-of-countrys-biggest-toilet-paper-makers-is-responding-to-coronavirus-panic-buying/#2a22b64b797b https://www.forbes.com/sites/amyfeldman/2020/03/12/how-kochs... https://www.wsj.com/articles/one-companys-hands-on-effort-to-ramp-up-sanitizer-production-11584151663 https://www.wsj.com/articles/one-companys-hands-on-effort-to...
- salawat 7y ago