US Politics: Winning is Easy, Governing is Harder

[DMC]

5 minutes ago, Martell Spy said:

Most cult leaders are in it for the sex, not the money.

Same principle applies.

Just now, The Great Unwashed said:

Who says I have to choose?

Plus this.

1 minute ago, The Great Unwashed said:

They’re not marks, they’re true believers!

You say potato...

[Mlle. Zabzie]

1 minute ago, Kalbear Total Landscaping said:

Sure, and they're long-term gambling. They're still not (largely) making money off of dividends. They're not attempting to actually give that company money (what the normal definition of 'invest' means). 

The vast majority of people doing anything with the stock market are doing it as part of long-term gambling to sell those stocks at a later date. But it's certainly not investing in the company.

Right - long term gambling. Very little money is in dividends, and this is clear from, ya know, dividend announcements. It's far better for the company to buyback their stock to increase their stock price (which is also what the stock owners want) and that's exactly what we see. We see almost no dividends, but absurd amounts of stock buybacks. 

Sure, and none of that is the stock market, at least not directly. 

Oh, there's absurd amounts of ability to get mad at the stock market, but right now I don't want to get mad at  that - I want to get mad at the asshats who are freaking out about Gamestop because people other than them are gaming the markets and they find it unfair. Fuck those people right in the ear.

Yeah, you and I see the world completely and utterly differently.  There are two ways that a company can deliver value to shareholders from its earnings.  It can either return those earnings to its shareholders or it can invest those earnings to fuel growth.  In the latter case, because the assets of the corporation have increased, the value to the shareholders is higher.  I don’t view long term holds as any different than holding any other sort of asset for a long period.  If I hold in cash, I’m (1) stupid and (2) betting that inflation will remain low enough that I don’t net lose.  If I invest in real estate, I’m betting that the real estate market will go up.  Maybe I will also get the benefit of imputed rent if I live on the property.  If I invest in gold, I’m making a bet on commodity prices.  If I put my earnings under my mattress, I’m asking to get shot.  So, when I buy an interest in the company, I’m looking for a return that is greater than what I could get in less risky investment (e.g., I could loan my money to a company in exchange for interest, or I could buy Treasuries, etc.).  That means, yes, I’m taking on risk.  But RISK is different than gambling.  We all take risk for return every day.  

[Kalbear]

1 minute ago, Mlle. Zabzie said:

Yeah, you and I see the world completely and utterly differently.  There are two ways that a company can deliver value to shareholders from its earnings.  It can either return those earnings to its shareholders or it can invest those earnings to fuel growth.  In the latter case, because the assets of the corporation have increased, the value to the shareholders is higher.  I don’t view long term holds as any different than holding any other sort of asset for a long period.  If I hold in cash, I’m (1) stupid and (2) betting that inflation will remain low enough that I don’t net lose.  If I invest in real estate, I’m betting that the real estate market will go up.  Maybe I will also get the benefit of imputed rent if I live on the property.  If I invest in gold, I’m making a bet on commodity prices.  If I put my earnings under my mattress, I’m asking to get shot.  So, when I buy an interest in the company, I’m looking for a return that is greater than what I could get in less risky investment (e.g., I could loan my money to a company in exchange for interest, or I could buy Treasuries, etc.).  That means, yes, I’m taking on risk.  But RISK is different than gambling.  We all take risk for return every day.  

But none of that is using your money to make the company better, which is what @Fragile Bird was talking about. 

And holding any long term asset is gambling. And that's fine! But let's not pretend, like a lot of the talking heads out there, that it is some noble thing to give the company money or support companies that you think are good. Furthermore, let's not pretend like the valuation of a TON of companies out there isn't completely wacked out based on their P&E or actual growth or debt and that hasn't been the status quo for a very long time. Remember the valuation of Linux-based companies? The valuation of Tesla now? A whole lot of stock value has almost nothing to do with the actual profit of that company and far more to do with people betting and hoping that those companies will do better at some odd point in the future, or at least betting on other people thinking that.

But it isn't remotely some rational thing, and for a very long time hedge funds and the like would happily put out reports and diatribes and pay others to try and help their profits even when they were just gussied up opinion pieces with no basis in fact or reality. It's all manipulation, all the way down.

[Mr. Chatywin et al.]

1 hour ago, Mlle. Zabzie said:

Most American humans own managed portfolios either through mutual fund investments or through 401K plans.  

Look @Myshkin, put your  on! They're already here, and this one has stated a dictatorship will soon emerge under her rule!!!

[all swedes are racist]

1 hour ago, Fragile Bird said:

Lol, let me unlike your post!

Sorry, in the world I live in people also set up portfolios for investing purposes. People also trade stocks to make money as fast as they can. I’m talking about individuals, Wall Street and the very rich is another world. The 80/20 rule applies, 80% of stocks are owned by 20% of the people.

it’s more like the wealthiest 10% own close to 85% percent of stock

[Mlle. Zabzie]

12 minutes ago, Tywin et al. said:

Look @Myshkin, put your  on! They're already here, and this one has stated a dictatorship will soon emerge under her rule!!!

Benevolent dictatorship.  Very benevolent.  

[DMC]

7 minutes ago, Mlle. Zabzie said:

Benevolent dictatorship.  Very benevolent.  

The 2021 version of "compassionate conservatism."

So Vox has a writeup on the battle over voting rights throughout statehouses that was bound to blow up.  However, I'd encourage all to look at the Brennan Center report, as the Vox piece is mostly dependent on their work.  From the latter:

Quote

In a backlash to historic voter turnout in the 2020 general election, and grounded in a rash of baseless and racist allegations of voter fraud and election irregularities, legislators have introduced three times the number of bills to restrict voting access as compared to this time last year. Twenty-eight states have introduced, prefiled, or carried over 106 restrictive bills this year (as compared to 35 such bills in fifteen states on February 3, 2020).

Of course, other state lawmakers are seizing on an energized electorate and persistent interest in democracy reform (which is likewise reflected in Congress). To date, thirty-five states have introduced, prefiled, or carried over 406 bills to expand voting access (dwarfing the 188 expansive bills that were filed in twenty-nine states as of February 3, 2020). Notably 93 such bills were introduced in New York and New Jersey.

 

[Morpheus]

All these butthurt, monied, chicken little dipshits

 

[Larry of the Lawn]

2 hours ago, Martell Spy said:

Most cult leaders are in it for the sex, not the money.

No, they aren't mutually exclusive (see Scientology, Jonestown, Nexium).  It's moneh for nothing and the chicks for free.

re:rest of the GME/stonks/shorts

 

The stock market isn't about investing.  If it was the market wouldn't be doing great while most people are hurting.  Lol everyone's just looking to make a buck on an increase in price. No one gives a shit about someone making a new technology or a really good product beyond what it does for their own bottom line.  This is like one of things dually held as an axiom of american self-interest conservatism and corporate liberalism.

[Fury Resurrected]

I don’t understand the stock market and I have no interest in it. But I do hope the GameStop story does demonstrate to people the power of the collective, something that most young people don’t seem to believe in. Take this lesson an unionize your workplace, kids

[Mr. Chatywin et al.]

2 hours ago, Mlle. Zabzie said:

Benevolent dictatorship.  Very benevolent.  

Psh, that would only happen if we gave you unlimited credit at Zappos.

[IheartIheartTesla]

The eviction moratorium, set to expire January 31 (i.e. this weekend) has been officially extended to March 31. This isnt preventing landlords from evicting tenants for other spurious reasons, but it is an important protection.

The part that confused me was it became official after the CDC director signed it. I didnt know she had that kind of power, but yeah, I guess some laws can be put in place for public health reasons and it requires official approval from the CDC (in terms of its legality).

[Mindwalker]

The Biden administration has halted an effort to install several Trump loyalists on Defense Department advisory boards, Pentagon officials said, as the new administration considers a series of unusual appointments that were made in the waning days of the Trump administration.

(...).

At least temporarily, the halt affects appointees who include Corey Lewandowski and David Bossie, both of whom served as campaign managers for Donald Trump. They were named to the Defense Business Board in December, as the Trump administration also abruptly dismissed other members with a form letter from what historically had been a nonpartisan panel advising the defense secretary.

Defense Secretary Lloyd Austin is now weighing his options, Pentagon press secretary John Kirby said. Neither Lewandowski nor Bossie had been sworn in on the business board yet. But others on the boards also serve at the pleasure of the defense secretary, allowing Austin to oust anyone with whom he is not comfortable.

(WaPo on Instagram)

[Clueless Northman]

6 hours ago, Fragile Bird said:

The GME situation is quite bizarre, because there is this large group of people who want to screw the shorts. I have never looked at that Reddit page, but I have heard people were saying things like, "you may lose money, but it's in a good cause! Screw the shorts!" If you have a million people all willing to spent $500 or $1000 or more and who are willing to blow that money to achieve a purpose, then it's very difficult to figure out what to do. For one thing, what if they are willing to keep it up for months? Short sellers are in there, thinking it can't last long, but I'm certainly not willing to either buy the stock or sell it short. Maybe it will end in a week, maybe it will end in a month, maybe longer. Someone will eventually be left holding the bag, but in a Good Cause, right?

Well, let the whole thing go until it's over. If people are playing by the rules to destroy a few hedge funds, they should be allowed to do it, there's need to "do something." Do something after it happened, if it turns out that what happened was overall bad and damaging to society. And people who willingly spend 1K when stocks are already that high know they will lose money and will be the ones left holding the bag, it's just they want to see some Wall Streeet billionaires shit bricks and suffer. The current shenanigans are only convincing more of them that fighting Wall Street and funds is the way to go, it's definitely a bad idea, a self-defeating one.

[Zorral]

6 hours ago, Fragile Bird said:

Someone will eventually be left holding the bag, but in a Good Cause, right?

"GameStop madness isn't David vs Goliath. It's Goliath vs. Goliath, with David as a fig leaf"

https://marketsweekly.ghost.io/what-happened-with-gamestop/

6 hours ago, Fragile Bird said:

If you have a million people all willing to spent $500 or $1000 or more and who are willing to blow that money to achieve a purpose, then it's very difficult to figure out what to do.

Like making a war of rebellion and overthrowing the government, right?  If a million + people are willing to spend anywhere up to and past $10,000 of their own money to buy military grade weapons, it's pretty hard to figure out what to do then, too!   Especially if they've been doing this for about 50 years already.    But we have been seeing this coming out of that for equally as long, if not longer.

[Kalbear]

Yeah, there's some more data on that, but basically other hedge funds decided to fuck over Melvin, it looks like:

https://www.bloomberg.com/opinion/articles/2021-01-29/reddit-traders-on-robinhood-are-on-both-sides-of-gamestop?sref=qStSw5ze

Quote

 

What do you make of that? One reading would be: “Retail investors on Reddit might have started the GameStop rally, but they’re not piling into this stock now, and the price action this week is coming from professionals.” Or as one Twitter user put it, “past the retail ignition, the rocket ship was mostly intra-fast money warfare.” This story doesn’t exactly tell you who the professionals are, whether they’re traditional Wall Street (hedge funds, etc.) or algorithmic high-frequency traders or just semiprofessional crews of day-traders who don’t access the market through traditional retail brokers. Someone other than Robinhood traders, anyway. 2  

You could tell a related story like: “Retail investors on Reddit started the rally to squeeze professional short sellers, and then this week the professional short sellers capitulated and started buying the stock at even higher prices from those redditors, who claimed victory and took profits.” This is probably true, at least in part. It also matches the popular story reasonably well, except that in the popular story the short squeeze is in the future, and the Reddit traders are supposed to be holding firm so that short sellers can’t cover even at recent high prices.

 

 

[Martell Spy]

American fascism isn’t going away
A conversation with Yale’s Jason Stanley about the latent pathologies in American politics.

https://www.vox.com/policy-and-politics/2021/1/29/22250294/trump-american-fascism-jason-stanley

Quote

 

And let’s be clear about who Ted Cruz and Josh Hawley are. I may be a Yale professor, but I went to a public school in Syracuse, New York, at a state university. I didn’t meet Ivy League grads until I was in grad school. They were very intimidating to me. Ted Cruz is my age, went to Princeton. And when I was cleaning the floors of bus stations to put myself through college, he went to Princeton, was a top debater, and then went to Harvard Law School. Josh Hawley went to Stanford and then Yale Law School. These are not just the elite. These are the elite of the elite of the elite. And they are destroying our democracy. They have joined this movement, and enough oligarchical elites have seen that they can use this movement.

But in a year or two, can the Democrats possibly deflate this movement? It’s going to be extremely difficult. We have people who have watched what Trump has managed to do, who are extremely good at this kind of politics, like Tucker Carlson, who I think is a likely future president.

Sean Illing
Oh, man, I’m going to pass over that Carlson prediction and instead just ask: What do you think the biggest lesson people like Cruz or Hawley or Carlson will have learned from the past four years?

Jason Stanley
That there are no restraints, no punishments, no accountability. That you can go much further than you ever thought possible in seizing power in the United States.

 

 

[Varysblackfyre321]

https://www.usatoday.com/story/news/politics/2021/01/28/aoc-slams-ted-cruz-tweet-robinhood-gamestop/4297204001/
Cortez reminds the public Cruz almost got her killed when he says he agrees with her about Robinhood.

Shes being very divisive for not doing a performance of unity to help repackage his image.

[Myshkin]

10 hours ago, Tywin et al. said:

Look @Myshkin, put your  on! They're already here, and this one has stated a dictatorship will soon emerge under her rule!!!

Don’t you mean “we’re”? Or are you one of those warm-bloods?

[OldGimletEye]

On 1/29/2021 at 1:52 PM, KalbearAnon said:

Sure, and they're long-term gambling. They're still not (largely) making money off of dividends. They're not attempting to actually give that company money (what the normal definition of 'invest' means). 

The vast majority of people doing anything with the stock market are doing it as part of long-term gambling to sell those stocks at a later date. But it's certainly not investing in the company.

Right - long term gambling. Very little money is in dividends, and this is clear from, ya know, dividend announcements. It's far better for the company to buyback their stock to increase their stock price (which is also what the stock owners want) and that's exactly what we see. We see almost no dividends, but absurd amounts of stock buybacks. 

Sure, and none of that is the stock market, at least not directly. 

Oh, there's absurd amounts of ability to get mad at the stock market, but right now I don't want to get mad at  that - I want to get mad at the asshats who are freaking out about Gamestop because people other than them are gaming the markets and they find it unfair. Fuck those people right in the ear.

Its true of course that most the time companies finance new investment projects out of their retained earnings. Its not true, that changes in security prices has nothing to do with how those funds are used. If company management is doing its job (which may not always be the case. The corporate finance/governance literature talks quite a bit about agency problems), it will estimate the cost of its capital, and use that to estimate whether the NPV of the new project is at least 0. If a whole bunch of people decide suddenly to hold a firm's stock, its cost of capital should come down, making more projects worthy of consideration. If its cost of capital is too high, particularly compared to the probable cash flows of a new investment project, then it should return those funds back to the investors via stock buybacks (though some of these purchased with lots of debt are questionable) or dividends. In short, those retained earnings are the shareholders money and the shareholders signal if the company should hold those funds, and invest them, by holding the company's securities.

I do not care particularly if a company doesn't pay dividends, particularly if funds could be put in profitable investment projects. Its true of course when I sell a stock, I'm mainly concerned with its price, but that price depends largely on the future cash flows the business is generating. And if the business is successful, at some point will likely start paying dividends as it matures and profitable investment projects become harder to find.

The problem with your definition of "gambling" is that it could apply to activities that most people would consider investing. When a company invest in a foreign country (as in building a new plant) it face a number of risk. The country could be involved in war, or there could be political trouble, or exchange rates might move adversely etc. A small business owner who decides to expand his business faces a risk. The expected demand for his product could not materialize, there could be a recession next year, a fire might burn down his store.

All investments, except for maybe "safe" assets involve  risk. Good investors try to understand the risk and 1) try to mitigate it in some fashion, or) decide they can live with it because of their personal risk preferences, their age, and their financial goals. When a fundamental investor tries to estimate the present value of a companies cash flows or dividends he adjust for risk.

And just because a company pays dividends doesn't mean there may be no trouble down the road for the company. Even a dividend paying company has a variety of risk. Even if I estimated the value of company with a simple Gordon Growth Model, I'm still going to take a look at their financials to understand how much debt they are carrying, whether they have enough liquidity, what their cash flows look like, potential competitors etc.

Note, I'm not denying that assets can be mispriced, or Irrational Exuberance (as Robert Schiller puts it) doesn't happen. What I'm disputing is the idea that if there isn't dividends, then there is no investment and only "gambling".