3 ms·
The financial sector is so absurdly profitable that it makes sense for big companies with a lot of cash to just invest in financial markets rather than actually
by andrepd 2y ago
The financial sector is so absurdly profitable that it makes sense for big companies with a lot of cash to just invest in financial markets rather than actually do things (esp. considering taxpayers will bail you out on tail events, so don't you care about risk!). Famously GM in 2008 had virtually become a financial services company which made cars on the side.
Just another sign that all is not well with the state of things.
- arethuza 2y agoI've heard descriptions of large housebuilders in the UK that sound similar - actually building houses is difficult and tricky because you have to actually keep end customers reasonably happy whereas much easier to just treat the land you own in "land banks" as speculative assets and base your business mainly around trading those.