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Reminds me of the Egg Greed Graph. https://pbs.twimg.com/media/HFa2bQlWcAARYNB.jpg https://pbs.twimg.com/media/HFa2bQlWcAARYNB.jpg Why is it people have such
by MarkusQ 3mo ago
Reminds me of the Egg Greed Graph.
https://pbs.twimg.com/media/HFa2bQlWcAARYNB.jpg https://pbs.twimg.com/media/HFa2bQlWcAARYNB.jpg
Why is it people have such a hard time understanding that this is what we want markets to do? If there is a scarcity of some resource, the prices rise and this motivates producers to produce more and consumers to consume less, until an equilibrium is found. On net, this means that we can have more of what we want for less effort over time. Yes, the people doing this profit from it. That's why they do it.
- vikingerik 3mo agoConsumers don't want to understand it because they don't want to consume less.
- smokefoot 3mo agoI mean no. The LIBOR analogy is appropriate. Large, long-term egg supply contracts are fixed to an index and that index was manipulated. That's criminal conspiracy and price fixing, not just a liquid market. That's notably different from say the current scrum for HBM where the demand truly came as a surprise and scarce supply gets bid up. Micron's windfall is justified and natural as these things go. The egg windfall was manufactured and criminal.
- treis 3mo agoLIBOR didn't triple the rate. I don't doubt that they screwed around at the margins but the extreme volatility in egg prices were predominantly caused by the underlying economic factors.
- oersted 3mo agoWhat do you mean? Did you read the article? There’s so much evidence showing that it was the opposite. Their profits shot up 3x in 2023 and 5x in 2024. They had 70%-140% profit margins. They publicly said that the end of the flu was a risk for their profits. There’s plenty of messaging recording explicit price collusion. How is that a natural supply shortage? The underlying economic factor is simply that monopolies or cartels will always try to manipulate prices in their favor if they can.
- miyoji 3mo agoFree-market libertarianism is a disease for which evidence is no cure.
- smokefoot 3mo agoYeah but the smoking gun is that volumes didn’t really go down much. I would buy higher unit margins on a shrinking volume, but for total profits to materially increase that means prices went up without a significant impact to volume. That smells rotten.
- treis 3mo agoThe indictment has them talking about 2 cent price swings. Like I said, this is goosing the margins. It's not an industry wide thing that tripled prices.
- miyoji 3mo agoCollusion is not a market force and is actually highly illegal and corrupting of markets, so this doesn't seem relevant at all.
- deleted 3mo ago[deleted]
- SpicyLemonZest 3mo agoAs the article says, people have a hard time understanding it because it turned out not to be what's happening. I was on the other side of the debate, I thought it was absurd, but it turns out egg company executives really were sending each other messages saying "let's manipulate the price upwards so that we can make more money".
- Henchman21 3mo agoGreed isn’t “forgotten” its reined in by regulation.
- oersted 3mo agoThe chart is meant to show how absurd the conspiracy theory is, but it turns out it’s literally what happened this time around at least. Well they didn’t forget their greed of course, they just temporarily lost the ability to exercise it.
- MarkusQ 3mo agoHaving now read the actual complaint / emails, I'd like to revise my position (if anyone cares). Prices go up in response to shortages in a properly functioning market, but these clowns were clearly over the line and trying to manipulate the prices in addition to that. https://www.justice.gov/atr/media/1450281/dl https://www.justice.gov/atr/media/1450281/dl