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People do the same with realestate via PP&E. I think it says more about the currency the valuation is written in than the underlying. (Not that I'm defending M
by msgodel 1y ago
People do the same with realestate via PP&E. I think it says more about the currency the valuation is written in than the underlying.
(Not that I'm defending Microstrategy that's obviously insane.)
- jerf 1y agoYes, strong agree. A properly functioning economy, well, it's probably too strong to say it would never do this, but it shouldn't permit it for years at a time, with all the educated participants in the economy easily able to tell that's what is going on. That this is possible at all doesn't mean the system is broken, but that it is possible at this scale says there is something seriously wrong.
- msgodel 1y agoShort term markets are driven entirely by liquidity, they only approach elastic equilibrium in the limit. Living with this can be painful though. I don't think anyone has serious solutions either other than just waiting for quantitative people to get better at sucking arbitrage out.