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That’s what a “Pump and Dump” is: buy bad investment, talk it up, sell to bigger fools. (Not that this is what’s going on here; think GameStop perhaps.)
by drfuchs 6y ago
That’s what a “Pump and Dump” is: buy bad investment, talk it up, sell to bigger fools. (Not that this is what’s going on here; think GameStop perhaps.)
- vermilingua 6y agoSure, but I’ve no idea how that would apply to this strategy, there are no prescribed purchases, and what could they possibly go short on if nobody buys bonds, the government? Then they’d have bigger problems.
- drfuchs 6y agoYou’re right, considering the context. Looks like I’m the bigger fool.
- SuchAnonMuchWow 6y agoYou can do the opposite of pump and dump: there is an investment you want to buy, talk it down, buy it low.
- vermilingua 6y agoThat would be much more fitting, but does that apply to bonds? My understanding was that the whole point of bonds is that they're more or less immune to market forces, and run on their own schedule?
- eru 6y agoNo, not at all. The price of bonds with a long duration varies with the prevailing interest rate (and inflation expectations). Even if the solvency of the issuer is beyond doubt.
- betterunix2 6y agoActually the bond market is larger than the stock market and the bond market can impact stock prices -- sometimes an unexpected spike in interest rates i.e. a bond market sell-off can drive the stock market lower (literally happening in real-time as we speak).
- Animats 6y agoNobody is big enough to pump the entire bond market.