The amounts involved are so small that I'm a little doubtful of this cashflow squeeze pattern actually working, but it doesn't have to work to drive markets. F

The amounts involved are so small that I'm a little doubtful of this cashflow squeeze pattern actually working, but it doesn't have to work to drive markets. Fun example is the old fax pump and dumps. You'd get some 'market prediction' fax for a penny stock that is very clearly just some pump and dump. No one buying thinks it's anything but a P&D. But they buy thinking other people will be tricked and that they'll get out before the suckers do... so sad for the P&D savvy buyers that they are, in fact, the suckers themselves. It was very important to the effectiveness of the scheme that the faxes be both obvious to be a P&D but also not so obvious that their targets couldn't imagine it fooling anyone. The author though shouldn't underestimate people just spending their funds inefficiently. A lot of people are not really aware that they could just get a risk free return better than they'd get from this thing, and even when they are they've adopted a non-linear utility where they value some unlikely JesusMarket windfall as much more valuable than a (higher EV) bond return. Humans seem to have a pretty predictable mishandling of extremely small probabilities. A lot of cons work by convincing the mark that there is a small (but real) odds of a windfall return. This thing shows up in cryptocurrency markets all the time, you can have some token listed on an exchange with no information at all but some symbol/name and random people will plunk thousands of dollars on it. To some extent there seems to be a kind of wealth brownian motion where your income is proportional to the number of pixels on the internet that, when clicked, cause funds to be transferred to you. Of course, having an actual REASON to pay you is even better, but it's not strictly necessary.