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Not GP, but banning short sales is known to be absurd by pretty much any economist or financial expert out there. Distorting true price always leads to negative
by __blockcipher__ 7y ago
Not GP, but banning short sales is known to be absurd by pretty much any economist or financial expert out there. Distorting true price always leads to negative effects.
Now people investing in french companies will pay unfairly high prices for their shares.
Switching to nationalization, it’s pretty clear that that removes the incentive to take on risk and found a company since you are always at risk of the government stealing your assets.
Sorry I didn’t include citations but I would really encourage you to read about rational pricing and healthy market dynamics. Those that think you can just artificially decide the price of a security rather than let the price discovery mechanism play out are doomed to repeat the same problem we see in communist countries: you can buy bread for a “fair” price, but there’s no bread to buy because the price was too low.
- drclau 7y agoYou are seriously oversimplifying reality to fit it into your world views, here.
- AnimalMuppet 7y ago__blockcypher__ at least gave some reasoning behind the expressed position. A fact-free, argument-free rebuttal does little to refute such a post, even if the post is wrong. Could you give some evidence or argument or both to explain why you think __blockcypher__ is wrong?
- __blockcipher__ 7y agoFrom HN’s guidelines: > Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something. In what way am I seriously oversimplifying reality?
- drclau 7y agoMaybe I came off too hard, and lacking details didn't help either. My point is, this is a situation without precedent, unlikely to repeat very often, and not all private industry is being nationalised. Same goes for banning short sales. It won't last forever. That is why I think you oversimplified. This is not a communist takeover of France. Note: I did not, and wouldn't have downvoted you for your comment. Yours is a fair opinion to have.
- WalterBright 7y agoGovernment price fixing always leads to some combination of: 1. shortages 2. gluts 3. black markets
- Guest42 7y agoPrice regulation works effectively for water and car insurance and hasn’t led to black markets (at least that I’m aware of).
- rukittenme 7y agoAnd it doesn't work for housing and about a million other goods and services that have been subject to price controls. Just look at California's water shortage issues. Water prices are basically fixed so huge farms suck up all the water to irrigate a desert while ordinary people are told to stop bathing. Seems like an externality of price regulation, no?
- AnimalMuppet 7y agoCar insurance is price regulated? In what country (or countries)? I'd be surprised if it is where I live...
- Guest42 7y agoAll of the US, each state has a department of insurance edit: wouldn’t let me reply, I know they regulate existing product prices and that new products need to be filed and that states have different laws regarding coverage limits and litigation details
- AnimalMuppet 7y agoDo they regulate prices? Or just coverages?
- WalterBright 7y agoPrice regulation of water has resulted in rationing and shortages. Car insurance prices aren't regulated around here.