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So let me get this straight: Market goes down: "grr... this is just a dastardly ploy to further wealth inequality because the rich can buy stuff on the cheap!"

by gruez 8mo ago

So let me get this straight: Market goes down: "grr... this is just a dastardly ploy to further wealth inequality because the rich can buy stuff on the cheap!" Market goes up: "grr... this is just a dastardly ploy to further wealth inequality because stocks are overwhelmingly held by the rich!"

jayd16 8mo ago
You joke buts not like those are exclusive at all. For example, pump and dump schemes have both an up part and a down part. Not hard to understand things can be manipulated in either direction to benefit a specific group.
- gruez 8mo ago
  >For example, pump and dump schemes have both an up part and a down part. Not hard to understand things can be manipulated in either direction to benefit a specific group. The pump and dump analogy doesn't really work because the crash associated with the "dump" isn't something that the organizer wants, nor do they benefit from the crash. It's just an unfortunate side effect from them cashing out and the truth catching up to them. Meanwhile the OP argues the opposite, claiming that companies knowingly made bad loans to create a crash, which implies more nefarious behavior than the standard explanation of bubbles caused by irrational exuberance. The latter is a conjecture that's not supported by any empirical evidence or even anecdotes.
  - jayd16 8mo ago
    They do want the dump to crash if they're shorting and if they plan to re-buy at rock bottom to pump and dump again.
VonTum 8mo ago
Well both can be true, money is only made (or lost) on market swings. It is precisely the rich who can capitalize on such swings Whereas for regular people, an upswing means nothing, whereas a downswing means job loss, mortgage rate hikes, etc.
- lostmsu 8mo ago
  The rich can also lose on such swings. And poor can also capitalize on the up swings. The difference is not so much in access to markets, but in who plays them better. There are also major omissions like the fact that mortgage rates are often fixed (poor are protected), but margin rates are generally not (rich get hurt).
  - ponkpanda 8mo ago
    fixed rates embed best current (market) estimate of path of future floating rates. The fixed rate payer/receiver is protected but they typically pay for that protection.
scoopdewoop 8mo ago
You'll find anti-capitalists are anti-capitalists whether the number is red or green.
ahhhhnoooo 8mo ago
The whole point of the article is that yes, both of those are true, and that they are self reinforcing. The crashes consolidate the wealth, the booms increase its power and grow a new crop to harvest. Repeat.
orwin 8mo ago
I mean, buy oil futures, ask the US president to put a tweet that the US military just escorted a tanker through Hormuz, oil prices go down, you make money. Sell your future, buy oil, now the president remove his tweet, have someone deny it happened, oil prices go up, you still make money. Easy.
salawat 8mo ago
A system is what it does. If a Market crash causes the poor to have to sell everything at fire sale prices to the only people left with buying power... The Article writer isn't wrong. If the Market going up causes buying power of the poor cash holders to go down because of inflation, cementing buying power in the case of the next downturn into the asset holding few... The Article writer isn't wrong. You scoff at their representation of the problem probably because you think they are blaming everyone else but themselves, but objectively speaking, they are making an observation that would hold if one were, in fact, observing a fundamentally rigged system architecture. If you break down the principles around how the system works, it's an inevitable conclusion buying power centralizes, the people it centralizes in gain influence over the optimization function, they optimize it toward greater value centralization, and away from other actor's capacity to exercise agency and survive. Stable feedback loop established, checkmate in 5 (whatever units it takes five of to hit your personal definition of an unacceptable degree of centralization. Important thing to also note, is that even if your sympathies are vested with the people the power is centralizing in, you're threatened by the increased level of conspicuousness and undeniability to everyone else. If the odds of someone coming after you significantly increases after your first 1-10 million dollars say; getting you 1 possible attempt on your safety to foil every 5 years, but every billion gets you an attempt every couple weeks; is it really still worth it? There's a lot of "Them" and "They" only have to succeed once. It behooves one to acknowledge that those dollars are perhaps better distributed to the point of raising everyone else up so as not to make yourself such a conspicuous target. Food for thought.
- knowsuchagency 8mo ago
  Well said

by gruez 8mo ago

jayd16 8mo ago

You joke buts not like those are exclusive at all. For example, pump and dump schemes have both an up part and a down part. Not hard to understand things can be manipulated in either direction to benefit a specific group.

gruez 8mo ago
>For example, pump and dump schemes have both an up part and a down part. Not hard to understand things can be manipulated in either direction to benefit a specific group. The pump and dump analogy doesn't really work because the crash associated with the "dump" isn't something that the organizer wants, nor do they benefit from the crash. It's just an unfortunate side effect from them cashing out and the truth catching up to them. Meanwhile the OP argues the opposite, claiming that companies knowingly made bad loans to create a crash, which implies more nefarious behavior than the standard explanation of bubbles caused by irrational exuberance. The latter is a conjecture that's not supported by any empirical evidence or even anecdotes.
- jayd16 8mo ago
  They do want the dump to crash if they're shorting and if they plan to re-buy at rock bottom to pump and dump again.

VonTum 8mo ago

Well both can be true, money is only made (or lost) on market swings. It is precisely the rich who can capitalize on such swings Whereas for regular people, an upswing means nothing, whereas a downswing means job loss, mortgage rate hikes, etc.

lostmsu 8mo ago
The rich can also lose on such swings. And poor can also capitalize on the up swings. The difference is not so much in access to markets, but in who plays them better. There are also major omissions like the fact that mortgage rates are often fixed (poor are protected), but margin rates are generally not (rich get hurt).
- ponkpanda 8mo ago
  fixed rates embed best current (market) estimate of path of future floating rates. The fixed rate payer/receiver is protected but they typically pay for that protection.

scoopdewoop 8mo ago

You'll find anti-capitalists are anti-capitalists whether the number is red or green.

ahhhhnoooo 8mo ago

The whole point of the article is that yes, both of those are true, and that they are self reinforcing. The crashes consolidate the wealth, the booms increase its power and grow a new crop to harvest. Repeat.

orwin 8mo ago

I mean, buy oil futures, ask the US president to put a tweet that the US military just escorted a tanker through Hormuz, oil prices go down, you make money. Sell your future, buy oil, now the president remove his tweet, have someone deny it happened, oil prices go up, you still make money. Easy.

salawat 8mo ago

A system is what it does. If a Market crash causes the poor to have to sell everything at fire sale prices to the only people left with buying power... The Article writer isn't wrong. If the Market going up causes buying power of the poor cash holders to go down because of inflation, cementing buying power in the case of the next downturn into the asset holding few... The Article writer isn't wrong. You scoff at their representation of the problem probably because you think they are blaming everyone else but themselves, but objectively speaking, they are making an observation that would hold if one were, in fact, observing a fundamentally rigged system architecture. If you break down the principles around how the system works, it's an inevitable conclusion buying power centralizes, the people it centralizes in gain influence over the optimization function, they optimize it toward greater value centralization, and away from other actor's capacity to exercise agency and survive. Stable feedback loop established, checkmate in 5 (whatever units it takes five of to hit your personal definition of an unacceptable degree of centralization. Important thing to also note, is that even if your sympathies are vested with the people the power is centralizing in, you're threatened by the increased level of conspicuousness and undeniability to everyone else. If the odds of someone coming after you significantly increases after your first 1-10 million dollars say; getting you 1 possible attempt on your safety to foil every 5 years, but every billion gets you an attempt every couple weeks; is it really still worth it? There's a lot of "Them" and "They" only have to succeed once. It behooves one to acknowledge that those dollars are perhaps better distributed to the point of raising everyone else up so as not to make yourself such a conspicuous target. Food for thought.

knowsuchagency 8mo ago
Well said