20 ms·

Saying this is just the market...is like saying housing is a free market after hedge funds buy your entire neighborhood...

anthonypasq 8mo ago
correct, both of those things are examples of free markets
- Betelbuddy 8mo ago
  Adam Smith had already clarified free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities. You are confusing market outcome with market structure.
  - Xunjin 8mo ago
    Good point, however we can't miss the history which shows that free market are not achievable, in some fields of economic is seen as "fairy tale".
    - Betelbuddy 8mo ago
      Even dumb Greenspan already knew we dont want unregulated..."free" markets: https://youtu.be/AWM0l8_F_X0?t=412 https://youtu.be/AWM0l8_F_X0?t=412
  - Aurornis 8mo ago
    But where is the monopoly here? Nobody has a monopoly on housing supply or DRAM production. Nobody is making an artificial scarcity. They’re producing as much as they can. You can buy the exact same DRAM that the data centers are bidding on.
    - blactuary 8mo ago
      There is absolutely artificial scarcity in the housing market, it is one of the biggest problems we face as a country
- blactuary 8mo ago
  Incumbent owners preventing the construction of more supply to maintain their own property values is not "free market". This is very basic stuff
nradov 8mo ago
Which neighborhoods are now entirely owned by hedge funds?
- Betelbuddy 8mo ago
  I should point out the relevance of my argument, is completely independent from the fact the reply to this questions of yours, is higher than zero. So dont see this reply as a justification. Just as a note that you failed to do basic diligence on distortions that are well known. And as I said, that are not relevant to the analogy. "When Wall Street Is Your Landlord" - https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/ https://www.theatlantic.com/technology/archive/2019/02/singl... "In one Atlanta zip code, they bought almost 90 percent of the 7,500 homes sold between January 2011 and June 2012"
  - nradov 8mo ago
    That article doesn't support your point. Only a small fraction of the homes in that area are actually owned by hedge funds. You should check the facts before commenting.
    - Betelbuddy 8mo ago
      You misunderstood me for the second time...
      - nradov 8mo ago
        [flagged]
        tosti 8mo ago
        [flagged]
xp84 8mo ago
People love to say that but they own a very small percentage of housing in reality. What’s driving housing costs is also supply and demand. Especially supply, since we’re not allowed to build any houses in most places people want to live.
- atomicnumber3 8mo ago
  Prices are decided at the margins. Having PE and REITs at every single table, even if their actual ownership is small as a %, makes huge differences.
  - Aurornis 8mo ago
    You’re still missing the key point: Hedge funds and REITs aren’t arbitrarily buying housing at any cost. They are responding to the market. If they overbuy then they will lose money and have to sell at a loss, at which point you could snap up some good deals.
    - blactuary 8mo ago
      This is ridiculously oversimplified, because there is no real market in housing. It is illegal to build in all of the places people want to buy. The purchase of housing by hedge funds isn't a problem on its own, it's simply a symptom of the bigger problem of supply restrictions. The funds themselves say in their financials that they view housing as profitable because of the various restrictions on supply in every desirable city. They explicitly say that if those restrictions were lifted they would not be able to make money in that business and they would exit.
    - atomicnumber3 8mo ago
      Any attempt to apply supply and demand and market theoreticals in housing is fundamentally misplaced, as the other commenter noted, because there are far too many forces that distort both supply and demand.
- Betelbuddy 8mo ago
  Read your response again. You are reinforcing my argument in case you did not notice...
NikolaNovak 8mo ago
But... They're not wrong. That IS the market. Unrestricted, gloriously free market with its historically predictable outcomes - yay! That's not where the interesting discussion is. The interesting discussion is with the notion that free unregulated markets are universally good and will naturally lead to positive outcomes because... I don't know, I'm personally not religious, but somebody here will help me :-).
- pluralmonad 8mo ago
  Where are these unregulated markets? Are you trading with your neighbor? If so, good, the more of that the better.
  - nutjob2 8mo ago
    An example of unregulated market is where I come to your house and put a gun to your head and in exchange for not pulling the trigger you give me your various items of value. That's one form of trading with your neighbor.
    - Xunjin 8mo ago
      I think you have gone in the end of the spectrum, in a sense that even a state law's are being broken, we are talking about rules in the market itself.
    - SR2Z 8mo ago
      An unrelated market is an oxymoron. You could come to my house and put a gun to my head, but that's not a consensual trade. That's just thuggery; the point of a market is that both sides benefit from trade. For markets to exist, property rights also need to be respected.
      - nutjob2 8mo ago
        The gun was an analogy and the comment satire, but the thuggery is real and the weapon is money. For markets to exist they indeed need to be regulated and when they aren't you get something other than a market, you get thuggery.
Aurornis 8mo ago
Hedge funds don’t have as high of institutional ownership as you assume. It’s actually pretty small. That said, nothing about the situation you described is at odds with “free market”. You’re describing the operation of a free market. I think a lot of people want “free market” to mean the opposite: A highly restricted market where they are protected from any supply and demand inputs from anyone else. They just want cheap things and don’t want to compete with anyone. There are two sides to a free market, though. In your example where a hedge fund comes in and buys your entire neighborhood, they would have to do so by outbidding everyone. This drives up the price. If it’s an economically irrational move you’d be smart to sell your house to them at an inflated rate, too! Then move back in when the prices crash down.
Seattle3503 8mo ago
Are there regulatory barriers to entering the DRAM market like there are in housing?
- slaw 8mo ago
  China blocked from buying ASML machines?

anthonypasq 8mo ago

correct, both of those things are examples of free markets

Betelbuddy 8mo ago
Adam Smith had already clarified free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities. You are confusing market outcome with market structure.
- Xunjin 8mo ago
  Good point, however we can't miss the history which shows that free market are not achievable, in some fields of economic is seen as "fairy tale".
  - Betelbuddy 8mo ago
    Even dumb Greenspan already knew we dont want unregulated..."free" markets: https://youtu.be/AWM0l8_F_X0?t=412 https://youtu.be/AWM0l8_F_X0?t=412
- Aurornis 8mo ago
  But where is the monopoly here? Nobody has a monopoly on housing supply or DRAM production. Nobody is making an artificial scarcity. They’re producing as much as they can. You can buy the exact same DRAM that the data centers are bidding on.
  - blactuary 8mo ago
    There is absolutely artificial scarcity in the housing market, it is one of the biggest problems we face as a country
blactuary 8mo ago
Incumbent owners preventing the construction of more supply to maintain their own property values is not "free market". This is very basic stuff

nradov 8mo ago

Which neighborhoods are now entirely owned by hedge funds?

Betelbuddy 8mo ago
I should point out the relevance of my argument, is completely independent from the fact the reply to this questions of yours, is higher than zero. So dont see this reply as a justification. Just as a note that you failed to do basic diligence on distortions that are well known. And as I said, that are not relevant to the analogy. "When Wall Street Is Your Landlord" - https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/ https://www.theatlantic.com/technology/archive/2019/02/singl... "In one Atlanta zip code, they bought almost 90 percent of the 7,500 homes sold between January 2011 and June 2012"
- nradov 8mo ago
  That article doesn't support your point. Only a small fraction of the homes in that area are actually owned by hedge funds. You should check the facts before commenting.
  - Betelbuddy 8mo ago
    You misunderstood me for the second time...
    - nradov 8mo ago
      [flagged]
      - tosti 8mo ago
        [flagged]

xp84 8mo ago

People love to say that but they own a very small percentage of housing in reality. What’s driving housing costs is also supply and demand. Especially supply, since we’re not allowed to build any houses in most places people want to live.

atomicnumber3 8mo ago
Prices are decided at the margins. Having PE and REITs at every single table, even if their actual ownership is small as a %, makes huge differences.
- Aurornis 8mo ago
  You’re still missing the key point: Hedge funds and REITs aren’t arbitrarily buying housing at any cost. They are responding to the market. If they overbuy then they will lose money and have to sell at a loss, at which point you could snap up some good deals.
  - blactuary 8mo ago
    This is ridiculously oversimplified, because there is no real market in housing. It is illegal to build in all of the places people want to buy. The purchase of housing by hedge funds isn't a problem on its own, it's simply a symptom of the bigger problem of supply restrictions. The funds themselves say in their financials that they view housing as profitable because of the various restrictions on supply in every desirable city. They explicitly say that if those restrictions were lifted they would not be able to make money in that business and they would exit.
  - atomicnumber3 8mo ago
    Any attempt to apply supply and demand and market theoreticals in housing is fundamentally misplaced, as the other commenter noted, because there are far too many forces that distort both supply and demand.
Betelbuddy 8mo ago
Read your response again. You are reinforcing my argument in case you did not notice...

NikolaNovak 8mo ago

But... They're not wrong. That IS the market. Unrestricted, gloriously free market with its historically predictable outcomes - yay! That's not where the interesting discussion is. The interesting discussion is with the notion that free unregulated markets are universally good and will naturally lead to positive outcomes because... I don't know, I'm personally not religious, but somebody here will help me :-).

pluralmonad 8mo ago
Where are these unregulated markets? Are you trading with your neighbor? If so, good, the more of that the better.
- nutjob2 8mo ago
  An example of unregulated market is where I come to your house and put a gun to your head and in exchange for not pulling the trigger you give me your various items of value. That's one form of trading with your neighbor.
  - Xunjin 8mo ago
    I think you have gone in the end of the spectrum, in a sense that even a state law's are being broken, we are talking about rules in the market itself.
  - SR2Z 8mo ago
    An unrelated market is an oxymoron. You could come to my house and put a gun to my head, but that's not a consensual trade. That's just thuggery; the point of a market is that both sides benefit from trade. For markets to exist, property rights also need to be respected.
    - nutjob2 8mo ago
      The gun was an analogy and the comment satire, but the thuggery is real and the weapon is money. For markets to exist they indeed need to be regulated and when they aren't you get something other than a market, you get thuggery.

Aurornis 8mo ago

Hedge funds don’t have as high of institutional ownership as you assume. It’s actually pretty small. That said, nothing about the situation you described is at odds with “free market”. You’re describing the operation of a free market. I think a lot of people want “free market” to mean the opposite: A highly restricted market where they are protected from any supply and demand inputs from anyone else. They just want cheap things and don’t want to compete with anyone. There are two sides to a free market, though. In your example where a hedge fund comes in and buys your entire neighborhood, they would have to do so by outbidding everyone. This drives up the price. If it’s an economically irrational move you’d be smart to sell your house to them at an inflated rate, too! Then move back in when the prices crash down.

Seattle3503 8mo ago

Are there regulatory barriers to entering the DRAM market like there are in housing?

slaw 8mo ago
China blocked from buying ASML machines?