There is a strange dichotomy for investors here, on the one hand they want to take advantage of an AI boom, on the other hand, the consequences of that boom are the destruction in value of loads of other companies.
The stocks are still way up on their initial investments from a year ago. Some disillusionment is to be expected, and I think, this wasn’t anywhere near enough of a sell.
Modern capitalism is anchored on the free and frictionless flow of capital - another one of those wonderful ideas stemming from the Reagan Revolution. As a result of it, capital doesn’t care about what happens to the market in a meaningful time frame, only what is happening today. If the economy collapses, that’s totally fine, as long as there is still something with an upward potential. And there is always something with an upward potential, even if it’s just investing in carrion feeders like pawn shops or subprime lending.
In fact, because it’s so much easier and faster to destroy than to build, modern capitalism probably prefers the former. You take something that works, load up on shorts, wreck it into the ground, profit. That is definitely the lesson I learned from the hostile takeover of RJR Nabisco in the 80s.
Like a great many features of modern capitalism (aka Late Stage Capitalism), this is a direct consequence of frictionless capital flows. This could be entirely avoided by restoring taxes on stock sales within a certain amount of time. You sell after five years, no taxes; before then, regular sales tax. That simple change stops the spiral of doom.
There is a strange dichotomy for investors here, on the one hand they want to take advantage of an AI boom, on the other hand, the consequences of that boom are the destruction in value of loads of other companies.
The stocks are still way up on their initial investments from a year ago. Some disillusionment is to be expected, and I think, this wasn’t anywhere near enough of a sell.
Modern capitalism is anchored on the free and frictionless flow of capital - another one of those wonderful ideas stemming from the Reagan Revolution. As a result of it, capital doesn’t care about what happens to the market in a meaningful time frame, only what is happening today. If the economy collapses, that’s totally fine, as long as there is still something with an upward potential. And there is always something with an upward potential, even if it’s just investing in carrion feeders like pawn shops or subprime lending.
In fact, because it’s so much easier and faster to destroy than to build, modern capitalism probably prefers the former. You take something that works, load up on shorts, wreck it into the ground, profit. That is definitely the lesson I learned from the hostile takeover of RJR Nabisco in the 80s.
Like a great many features of modern capitalism (aka Late Stage Capitalism), this is a direct consequence of frictionless capital flows. This could be entirely avoided by restoring taxes on stock sales within a certain amount of time. You sell after five years, no taxes; before then, regular sales tax. That simple change stops the spiral of doom.
among many other things, for example…just ban naked short-selling entirely. why the fuck should anyone be able sell stuff they don’t own?
most of the rest of the world figured out that was a terrible idea after 2000-08, US said hold my beer
Nope. The problem is they want to make money. China does too but it’s not China’s number one priority.
Investors can and will pull their money out. China will not.