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I tend to agree, but with some reservations. One difference between centralisation due to monopolies and centralization due to other things (government plannin

by netcan 6y ago

I tend to agree, but with some reservations. One difference between centralisation due to monopolies and centralization due to other things (government planning, industry-scale unions, etc.) is that monopolies are highly profitable regardless of efficiency. Going broke is what usually kills things. The macrofinancial situation, currently, is telling. We are obviously in the midst of a recession. Huge industries are in meltdown: hospitality, air travel, physical retail, etc. They are literally producing far fewer goods and services... stuff that people normally consume. OTOH indexes are up. Why, because the profits of H&M or RyanAir are miniscule compared to fb or amzn regardless. Consider what "increases efficiency .., lowering the prices and making products more affordable" means for fb or google. There are no prices, except ad prices. We can't even think about consumer benefits (more, better goods) in a meaningful way. What does more facebook even mean? Is it beneficial to anyone? This matters because "more resources to fb, less to Ryanair" is the market working normally. Since fb doesn't consumer capital, all that happens is a stock price change.

esotericimpl 6y ago
Indexes are up because the wealthy were bailed out with the “stimulus”, which was free money printed by the fed and given to people who don’t need it, lead them to just put it in the “market” since again there’s nothing to spend your money on currently other than stocks and real estate, this only leads to higher assets prices. The fact that the us government took zero equity positions despite bailing out the wealthy will be discussed for decades. TLDR money printer go brrrrrrrr
- netcan 6y ago
  True also. This cycle has definitely a proven point now about how asset prices are a fungible for currency inflation. Every flavour is different though... with this kind of inflation, what what government y prints, government y receives. A central bank handles the deficit, but the asset inflation is global, not limited to a national currency. Probably destabilizing in a game theory sense. That said, there's also the fact that for amzn, 2020 has really made prospects X% better. X% of amzn makes up for a lot of Y% worse in companies that do worse in a pandemic. There's a definite correlation between company size and prospects in this crisis year. On government equity, I agree. Macroeconomics needs a do over. I think norway proves the principle of governments owning equity stakes pretty handily. Incidentally, Norway would probably have been (could still be) an even bigger success case if they adjusted even more boldly. A lot gets lost on regular price inflation.

by netcan 6y ago

esotericimpl 6y ago

Indexes are up because the wealthy were bailed out with the “stimulus”, which was free money printed by the fed and given to people who don’t need it, lead them to just put it in the “market” since again there’s nothing to spend your money on currently other than stocks and real estate, this only leads to higher assets prices. The fact that the us government took zero equity positions despite bailing out the wealthy will be discussed for decades. TLDR money printer go brrrrrrrr

netcan 6y ago
True also. This cycle has definitely a proven point now about how asset prices are a fungible for currency inflation. Every flavour is different though... with this kind of inflation, what what government y prints, government y receives. A central bank handles the deficit, but the asset inflation is global, not limited to a national currency. Probably destabilizing in a game theory sense. That said, there's also the fact that for amzn, 2020 has really made prospects X% better. X% of amzn makes up for a lot of Y% worse in companies that do worse in a pandemic. There's a definite correlation between company size and prospects in this crisis year. On government equity, I agree. Macroeconomics needs a do over. I think norway proves the principle of governments owning equity stakes pretty handily. Incidentally, Norway would probably have been (could still be) an even bigger success case if they adjusted even more boldly. A lot gets lost on regular price inflation.