Re: <nettime> GameStop Never Stops

Le 4 févr. 2021 à 11:32, Florian Cramer <flrncrmr@gmail.com> a écrit :

Postscript to Jens Berger's article that I had posted yesterday:

> This leads to the overlooked question: Who did sell the shares to the hedge
> funds and the hobby speculators during the turmoil? Were it professionals
> like ['Big Short' investor Michael] Burry, [Elon] Musk and the Winkelvoss
> brothers? Or Reddit power users who masterminded the whole coup? The whole
> thing literally smells of market manipulation and one can only hope that the
> circumstantial evidence will now be investigated.

The above expresses whimsy in blaming "market manipulation", as if it flies in the face of a "virtuous" market. Meaning the market "ruled" by the "invisible hand", of course. But shouldn't the "natural" nature of that market render it impervious to manipulation?

The really important question up for debate is that of "justification" of the stock market:

- the IPO does indeed allow companies to raise capital to finance future development (starting with the Dutch East India Company which sold shares to finance the colonisation and exploitation of Malaysia);

- when shares are traded subsequently, it is purely for speculative gain (in price rise and eventual dividends). It no longer has any material benefit for the company concerned. The only difference with the Monopoly game (which was invented as a critique) is that the money generated does have real agency;

- the difference between capital and debt should be emphasised. With debt, the interest paid (the purchase cost of the money) is limited (once the debt is repaid). But capital is a permanent godsend, it siphons off profits for evermore (or until bankruptcy), either for the initial investors (who have some virtue, one can suppose, because their taking a financial risk made the company's activity possible) or the subsequent shareholders (who could be qualified as parasites...).

Implying that the Gamestop/Robinhood investors were somehow not playing by the rules is not the problem. The rules are the problem.

Stay safe -

Joe.