Quickie #GameStop thread: The #Robinhood roller-coaster is a vivid reminder of whom our financial system benefits. Hedge funders like to think they provide social value, when really they are just guys (almost always guys) who have figured out how to game the casino... (1/7)
"I'm a fucking genius," is how one family office guy characterizes the hedge-funder mindset in my upcoming book (ReadJackpot.com). I'm enjoying the takes of @HuffPost's @zachdcarter, @DougHenwood at @jacobinmag, and @MrBrownEyes2020 (whoever he is) on all of this. (2/7)
In short, the big fish manipulate markets FOR A LIVING and then weep and moan when small investors beat them at their own greedy little game. But they have the ear of the establishment because, as I lay out in the book, hedge funders are MASSIVE campaign donors. (3/7)
The other thing about the public markets that we have really seen lately, amid #COVID19, is how disturbingly disconnected they are from the reality most Americans inhabit—and how harmful this is. Here's a relevant snippet from "Jackpot:" The performance of Wall Street...(4/7)
...bears little resemblance to economic realities on Main Street, but things weren’t always that way. Economists Daniel Greenwald, Martin Lettau, and Sydney Ludvigson calculated that almost the entire increase in the value of public companies from 1952 to 1988... (5/7)
...was the result of real economic growth. But from 1989 through 2017, though the markets swelled by $34 trillion, only about one- quarter of the growth was reality-based. Indeed, 43 percent of market growth during that later period came from... (6/7)
..."a reallocation of rents to shareholders in a decelerating economy.” Translation: Wealthy investors and executives stiffed employees and hoarded most of the profit for themselves.
And there you have it, people. (7/7)
And there you have it, people. (7/7)
Curious what Gov. @chamath thinks of all this?
Oh, I should add that the combined wealth of America's billionaires has increased nearly 40% over the past 10 months. Thank you, #COVID19! bit.ly/3tfYn4e
Also from the book: Hedge funders hoping to influence the 2017 @GOP tax reform more than quadrupled giving to federal candidates, lawmakers, and PACs, from $43 million per election cycle from 2008-2014 to $182 million per cycle during the 2016 and 2018 cycles.
Alas, it will likely be small investors who lose their pants in the end. Some will hit a big jackpot. Others will lose their nest egg. And the hedgies will keep right on hedging.
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