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> People ask why financial markets produce things that are pointless...this is why, because the distribution of assets globally is not guided by the market in a
by tablespoon 4y ago
> People ask why financial markets produce things that are pointless...this is why, because the distribution of assets globally is not guided by the market in any way.
What do you mean? Wasn't "the distribution of assets globally" in this way guided by the market? The market wanted oil, so it sent vast quantities of money to the Saudis, who are the most effective producers.
I think this is more an illustration of how the market, left to its own logic, often does pointless or dysfunctional things.
- skippyboxedhero 4y agoThe most effective producers because of non-economic reasons (i.e. geological properties). So they end up being one of the largest investors in the world because of geology. The market does often not do pointless or dysfunctional things because markets tend to give most capital to the most efficient users of that capital. But those rules do not apply to things like oil where there are significant non-economic returns (to an extent, the Saudis will always lose all their money, I have named other reasons who repeatedly do the same thing...but it is not terribly efficient spending resources to prise capital from them).