Alphapuggle PieFedThe Enshittifinancial Crisis
www.wheresyoured.at/the-enshittifinancial-crisis/
cross-posted from: https://lemmy.world/post/40875214
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Capitalism gonna Capitalism.
We are watching one of the greatest wastes of money in history, all as people are told that there “just isn’t the money” to build things like housing, or provide Americans with universal healthcare, or better schools, or create the means for the average person to accumulate wealth.
This could have been written about the War on Terror.
I can find no analyst commentary on Meta making sixteen billion dollars on fraud, because it doesn’t matter to them, because this is the Rot Economy, and all that matters is number go up.
I’m not sure why he thinks morality is a factor in market movement. You’ll not find the stock market negatively reacting to money being spent on genocide in the Middle East or murders in the Caribbean, or to Palantir expanding into a mass-surveillance apparatus either.
Analysts that do not sing the same tune as everybody else are marginalized, mocked and aggressively policed… By not being skeptical or critical you are going to lead regular people into the jaws of another collapse.
Yes, market collapses are actually loved by large wealth holders, because unless the entire currency itself collapses, the people with the most currency are the ones best-positioned to benefit from the collapse. Investors will ride the economy off a cliff so they can salvage the scrap at the bottom. Sam Altman literally opined about ‘redefining’ the social contract when AI collapses the economy in his White House presser.
Analysts have, on some level, become the fractional marketing team for the stocks they’re investing in.
Because major news, analysis firms, and banks are all owned by the oligarchy, and no one is being punished for using that power to manipulate the market. They know that if they’re a big firm and they say, “this stock is amazing!” it will go up, and since they own that stock, they get richer.
When it happens, I promise I won’t be too insufferable, but I will be calling for accountability for anybody who boosted AI 2027, who sat in front of Sam Altman or Dario Amodei and refused to ask real questions, and for anyone who collected anything resembling “detailed notes” about me or any other AI skeptic.
It’s sad to me that Ed lived through 2008 and still thinks there will be accountability in this system. At some point you have to accept that the purpose of a system is what the system does. Our system cyclically collapses, economically, in order to enrich billionaires. It happened during the DotCom bubble, it happened in 2008, and it happened during COVID, and that’s just in my short lifespan.
I realize I’m pearl-clutching over the amoral status of capitalism and the stock market
I really don’t think you are. You haven’t even begun to reach the bare minimum level of disdain and disgust-inducing realism one should have about capitalism, nevermind anything being remotely close to pearl-clutching.
We are watching one of the greatest wastes of money in history
This could have been written about the War on Terror.
Or possibly the “war on drugs” in the 80s, or the war on communism before that.
History doesn’t repeat but it rhymes.
PowderhornOne thing Ed does is use my cadence, so it comes across as very natural. It’s kinda like how dogs sniff each other and feel comfortable.
He was right.
Yeah, a good writer will reduce things to this size of a sentence. Now, this requires skill … three random monosyllabic words and a period gets you nowhere. It’s a bit like comedy in that the setup is required for the punchline.
Yeah, it’s very well written and ‘easy to read’. I’ve seen his posts a couple of times on HackerNews, but I don’t think I ever read a long form blog post of his before. This was really good (even if I think a little naive).
Look: I’m not going to claim I agree with him on everything. Though there are a satisfying number of “fuck"s.
But he does research so I don’t have to, and I enjoy that.
James R KirkEd frequently comes off like a guy ranting outside the gas station but goddamn is it hard to find an issue with with his conclusions.
I mean, yeah, he sounds like he’s yelling at clouds, but he brings the receipts.
cecilkorikOh PLEASE let them completely enshittify the entire financial system. If anything will ever completely free the world from money’s tyrannical yoke, it will be tech billionaires’ incompetent attempts to “disrupt” and “improve” it.
That thing about the more you know about economics. We have to “invest” in our own retirements and its all just leves of scam. Without regulation investment is a dart throw. I mean companies can borrow money to buy their own stock. common!
A company borrowing money to buy it’s own stock makes sense though, doesn’t it? A share buyback reduces the number of shares, so remaining shareholders are holding more equity (as a percentage) than prior to the buyback. It’s just the reverse of issuing new shares. If the company has no productive use of the capital, then a share buyback is a way to make the company more “lean”, shedding unneeded cash to increase (relative) value.
Borrowing money to do so just means that they are deemed credit worthy by enough bond investors that they can borrow at low enough rates that the debt repayment costs are less than the value shareholders would expect from a dividend payment and/or that they don’t want to issue dividend payments for some other reason (like the idea that dividends should be consistent and only ever increase or they’re valuation gets slaughtered.)
The whole stock market is a bubble now, anyway, so this is the heart of our problems. About 2 decades ago, financial reporting allowed companies to shift their PE ratio away from Price-to-Earnings ratio and instead report on Price-to-*Forward*-Earnings ratio. This is the company’s projection of their future earnings potential, but investors just seen to accept that a “PE” ratio means the same thing it did for the preceding, like, century. A PtFE ratio of 25 is insane, on historical contexts, yet that’s completely normal now.
Insanity. And yet the market keeps going up. Even the ’08 crash was just a small blip, compared to what it should have been.
I’ll just put my tinfoil hat back on over here.
See that is the thing. “If the company has no productive use of the capital”. Borrowing is essentially money creation. Utilizing it just to artificially increase stock value is just an economics game at that point precisely because its not doing something productive. Companies are supposed to be productive in the real world but now all companies spend more of their money playing economic games over making prducts or providing services. This is the classic complaint and the reason for the late stage capitalism thing. When money is the goal everything increasingly is setup to make money but not actually do the thing the money is supposed to incentivize.
Something something when a metric becomes a target something something it ceases to be a useful metric. Only in this case the metric is fungible and can be traded for almost anything else in the world. No wonder it became the target.
The older I get, the more I think Tolkien and Herbert had it right (despite disagreeing with much of their politics); gift economies, subsistence farming, and self-reliance are the way to go to prevent us from destroying ourselves.
AI is essentially a meme stock now. I’m pretty sure that a lot of investors know that but they don’t care because they can still make money with a bubble. This will make the collapse all the more spectacular, but once again, they don’t care because they can still make money from it on the short run.
As a bare minimum the stock market needs to be reformed because the forces at play do not incentivize a productive or efficient use of investment money and everyone will suffer from it as a result.
i think the difference this time is that the us govt salivates over AI for its use in spying/surveillance over the entire online universe–i feel like they’ll make sure AI doesn’t implode no matter the cost to everyone and everything else
I agree with you, and that’s why I think the US government specifically will let the AI bubble burst - so that the feds can buy up all those data centers for pennies on the dollar (and a promise to look the other way at all the pumping and dumping and insider trading the hyperbillionaires did to come out ahead in the AI crash).
If only trumps veiled threats of annexing Canada, hostilities toward Venezuela and attempt to reignite local manufacturing weren’t the foreshadowing of global market collapse 😅
The AI pump and dump may well be the vessel that breaks our status quo but it’s one of a number of fuses lit. If you want an interesting take on the market https://rationalreminder.ca/podcast/302 check out Michael Greens opinion.
The tldr on our current shit show is families went from large amounts of children to few or none in one generation. Our retirement investment vehicle props up every publically traded market valued billionaire with their net contribution through passive market participation. They’re aging out of contribution and into withdrawal despite collective efforts to kick the can down the road by raising retirement ages and pensionable year requirements but the bill comes due.
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