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What is "real economics" if law, contracts and supply/demand isn't real economics? Stock price was never supposed to closely mirror company's financials, that'
by emteycz 6y ago
What is "real economics" if law, contracts and supply/demand isn't real economics?
Stock price was never supposed to closely mirror company's financials, that's a meme pushed by socialists that want to portray the stock market as wrong ("out of reality"). The financials are merely a indicator. It's stock market and what matters are the dynamics of that market, and the company itself is only a small part of that.
- Karunamon 6y agoIt's hard to not read this as a pathological corner case.
- emteycz 6y agoYes, that it surely is - but from the Wall Street side; shorting 140% of stock should've been caught by regulators as it's illegal and totally impossible for retail investors. I don't think it was missed by mistake, though. People rallying to make profit from their mistake is nothing wrong, just new - this is the first time the small boys (instead of other big boys - but you can just ping them on Bloomberg terminal and make a deal with them) were able to catch them and coordinate their capital (the same thing the Wall Street guys are doing together, just bigger scale). It won't happen again as long as the big boys play according to the rules.