- anime was right
- Jun 27, 2008
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death is certain
keep yr cool
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doomsday economics
https://i.imgur.com/BtgZ6Ce.mp4 (sound on)
https://i.imgur.com/kRrGiRv.mp4
old thread:
https://forums.somethingawful.com/showthread.php?threadid=3826121&userid=0&perpage=40&pagenumber=1
good content:
michael roberts: https://thenextrecession.wordpress.com/blog/
naked capitalism: https://www.nakedcapitalism.com/
https://www.youtube.com/user/RichardDWolff
good random poo poo:
https://www.youtube.com/watch?v=GI7sBsBHdCk
GAMESTONK:
IF YOU WANT TO GAMBLE ON REDDIT MEME STONKS DO NOT PUT IN MORE MONEY THAN YOU CAN AFFORD TO LOSE!!!!
someone explained this to me earlier today and im gonna give you an even dumber explanation than the one i was given
its basically a collective pump and dump. around social media people have collectively decided to but and subsequently pump up the stock price of gamestop. this screw over vampiric hedge funds that bet against gamestop. from the sounds of it one hedge fund is gonna go bankrupt.
now people are moving on to stocks like AMC and Nokia with the same plan.
It's exactly like a pump and dump, except you're pulling the car over and, kidnapping the worst loving people in the world off the street, and forcing them to pay your gas money as you drive around randomly at insane speeds before gunning it off a cliff, either walking away after bailing in time and lighting a cigarette without even looking back or going over the loving thing and exploding along with your kidnapped passengers.
READ THIS BEFORE YOU DO SOMETHING loving STUPID WITH YOUR MONEY, IDIOTS
like seriously anyone getting into this you have multiple financial professionals in this thread who you can ask questions of. to reiterate some stuff:
-youre gambling right now. this is not a regular buy and hold stock investment.
-do not let hindsight influence your decisions. you didnt lose anything by not placing a larger bet. its no different from thinking, "i would have bet more last hand if id known id be dealt a blackjack"
-dont be afraid to realize gains. nobody ever lost money realizing gians. they lost money by thinking there were further gains to be had. you dont have to sell all your shares at once
-you will never know the peak price until its all over. do not kick yourself if you sold $30 below peak price. with a sizable position theres not even a guarantee that every share would sell for that much
-dont gently caress with options unless you 100% absolutely know what youre doing. reading the investopedia article will not help you understand your brokerage's option trading interface
right after I finished Norfield, I went straight into Cedric Durand's "Fictitious Capital: How Finance is Appropriating our Future", which is also quite good:
right after I finished Norfield, I went straight into Cedric Durand's "Fictitious Capital: How Finance is Appropriating our Future", which is also quite good:
quote:Marx’s judgement on the credit system was very different to Hayek’s. For him, far from running up against the limits of the available resources, credit could overcome the barriers constituted by self-financing and the production of precious metals. It thus ‘accelerates the material development of the productive forces and the creation of the world market’.17 The idea of resource constraints was not completely missing here, but it was limited to those situations where the credit system ‘appears as the principal lever of overproduction and excessive speculation in commerce’ because here it forces ‘the reproduction process, which is elastic by nature … to its most extreme limit’.18
The credit system has a dual character immanent in it: …. it develops the motive of capitalist production … and restricts ever more the already small number of the exploiters of social wealth … On the other hand however it constitutes the form of transition towards a new mode of production. It is this dual character that gives the principal spokesmen for credit …. Their nicely mixed character of swindler and prophet.
Consistent with what was commonly accepted in the nineteenth century, for Marx fictitious capital does indeed result from the development of the credit system.20 The exchange of loan-capitals is a means of valorisation de-correlated from the productive activity that gives rise to fictitious capital. Its constituent parts are the making available of loanable funds, repayment deadlines, and the corresponding interest. Nonetheless, fictitious capital is not reducible to the credit system alone. Marx’s main original intuition was that the creation of fictitious capital proceeds from a more general logic of anticipating the capital valorisation process. Fictitious capital thus appears as a claim and a projection made by capital-holders; its failure leads to financial crises and social and political battles over the distribution of the resulting fallout.
In its various institutional incarnations, finance is essentially reducible to the advance of a certain monetary value in exchange for a promise of reimbursement or, indeed, a property title over activities that will create values as they play out. Finance thus establishes a mode of capital valorisation that seems to give money magical faculties. What Marx says about interest-bearing capital is also true of finance in general: ‘it becomes as completely the property of money to create value, to yield interest, as it is the property of pear-trees to bear pears.’21 The comforting idea that it is possible to separate the valorisation process from the production process and the exploitation of labour is a chimera, but it sustains what are for capital powerful mechanisms of domination.
How does the creation of fictitious capital work? ‘The formation of fictitious capital is known as capitalization’:22 that is, it produces debts or securities whose value results from the capitalisation of the anticipated revenues.23 As such, the central problem fictitious capital poses is not – as the Austrian school approach has it – the existence of prior savings sufficient to allow the creation of supplementary capital. The problem is that fictitious capital pre-empts the future valorisation process even as it makes it invisible. If, according to the Austrian approach, fictitious capital is synonymous with failure and wastage, in the Marxist analysis its fictitious character is not synonymous with the success or failure of the future valorisation process, even though it does indicate its fragility. In short, it poses the present valorisation of money-capital as a stake in future economic and political processes.
Marx identifies three forms of fictitious capital: credit money, government bonds and shares. On this point as with others – think, for example, of the Manifesto’s prophetic pages on globalisation – Marx displayed staggering capacities of foresight. For while credit money and financial markets occupied only a limited place in his era, today they are at the very heart of the functioning of economies.
Credit money may seem the form most difficult to identify as a species of fictitious capital. Is it not interest-bearing capital, rather than fictitious capital? A matter of idle funds whose owners want to lend them in exchange for interest? The correct answer is that credit money shares characteristics with both these types of finance capital.24 It begins with a bank loan, which, having been a simple monetary sign, becomes money through circulation. But this circulation itself largely results from an ex nihilo creation, in that it is an advance on a future revenue and essentially does not come from previously saved funds. The generalisation of credit money since the mid-twentieth century implies ‘the a-priori canonisation of private labour as social labour’.25 Firms’ production and the labour of worker-borrowers is pre-validated by money before commodities are actually sold or wages actually paid. The generalisation of this type of credit, which has long sustained economic growth, is made possible by a certain regularity of economic activities. Indeed, deposits rely on the promise that it will be possible to withdraw them in the form of notes issued by the central bank; yet no bank is able to keep to this promise if a large number of depositors want to withdraw their money simultaneously (a bank run). After all, except for reserve funds, all deposits are nothing but numbers, without any immediately available counterpart. If there is a lack of confidence in a particular bank, and even more so when there is a lack of confidence in the banking system in general, only the central bank – which has the supreme monetary power of issuing the money that serves as the banks’ reserve fund – is able to prevent or contain the financial panic. This evidences both the hierarchical nature of money as an institution and the political regulation associated with fictitious capital.26 Credit money’s fictitious dimension and its political anchoring are both accentuated by the fact that the government bonds that commercial banks sell to central banks under repurchase agreements constitute a sizeable part of the raw materials serving private banks’ creation of credit money. In 2010–12, the banking/public-debt-crisis spiral in the countries of the European periphery forcefully illustrated the destructive power of such an imbrication. Here, the important question was the European Central Bank’s refusal to commit to any unconditional automatic repurchase of the various countries’ public debts. This not only cut off the peripheral countries’ access to financial markets but simultaneously led to a rapid devalorisation of government bonds. This in turn massively weakened the banks who held large volumes of these titles. The lack of any such guarantee brutally demonstrated the single currency’s fundamental policy shortfalls. Politics is credit money’s guarantor of last resort. It alone can allow the controlled expansion of credit money and prevent it from abruptly contracting in turbulent periods.
The fictitious character of public debt is more immediately apparent. Indeed, it does not have any counterpart in capital valorised through production processes. Even if the expenses financed by debt do relate to investment in infrastructure or the education system, they have no direct monetary return to which the repayments correspond. Certainly, the state holds financial assets (debts, shares) and a physical estate, but essentially the latter is not supposed to be ceded. Ultimately, even though the financial management of state assets is becoming increasingly important in the current context – in particular through the selling off of the family jewels in the context of austerity plans – it is claims on the amount of future taxation that dominate public debt. Moreover, the principal on the debt is never repaid, because new issuing is constantly used to compensate the payment of securities reaching maturity. The fact that government bonds are tradeable further perfects their fetish character. For the individual bondholder, the fiction becomes a reality when he finds a buyer for his bonds. But these bonds do not in themselves have any direct counterpart in the valorisation process: they are advances on tax receipts.
This singular characteristic of liquidity, mentioned at the beginning of the chapter, is just as essential to market-listed stocks and corporate bonds exchanged on the financial markets. Unlike public debt, these latter do indeed represent a real capital – that is, capital invested by firms or used in their operations. Here, it is the duplication implicit in the financial mode of valorisation that is at the origin of the fiction:
But the capital does not exist twice over, once as the capital-value of ownership titles, the shares, and then again as the actual capital invested or to be invested in the enterprises in question. It exists only in the latter form, and the share is nothing but an ownership title, pro rata, to the surplus-value which this capital is to realize.27
The same is true of company bonds, albeit with the difference that here it is a matter of credits and not property titles, and the capitalised revenues are thus interest, not dividends or really accumulated capital.
Table 1 offers a simple presentation of the basic forms of fictitious capital. It underlines the various bases of this fiction and the different modalities through which it is constituted as an economic object. In the case of bank credit, and more precisely the credit issued by banks beyond their reserve funds, the fiction rests on the fact that no revenue has been received in advance and on the anticipation of a future accumulation process. Nonetheless, this fiction is regulated in so far as the foreseen repayments are meant to be compatible with what is considered the normal development of business. With traditional bank credit, the banks hold onto the debts so they are not subject to a re-evaluation process.28 This broad category of bank credit also includes commercial credits that banks acquire from companies in transactions discounting inter-company debts.
In the case of public debt, the fiction derives from the fact that bonds do not correspond to any real capital accumulation process, but simply to advances on future tax receipts – receipts that themselves depend on the revenues that economic agents will draw from future economic activity. However, the tradability of these debt titles, like the tradability of shares and bonds, introduces a new dimension that gives fictitious capital its full power: its liquidity. A tradable equity simultaneously represents both access to earnings flows and a wealth that can at any instant be converted into real money at prices corresponding to the financial community’s self-referential estimation of expected future returns.
The fictitious character of capital in the form of tradable equities brings us back to the paradox of liquidity. While banking crises correspond to a lack of a posteriori validation of credit money and manifest themselves in bank runs, financial crises translate into the stock-market collapses that occur when too many agents try to offload their securities simultaneously.
In sum, fictitious capital is an incarnation of that capital which tends to free itself from the process of valorisation-through-production. According to the Marxist approach, capital is fictitious to the extent that it circulates without production yet having been realised, representing a claim on a future real valorisation process. Today this fictitious capital can rely on public authorities’ support, in particular the support of central banks. As they take action in favour of financial stability, these latter effect a social pre-validation of the accumulation process by way of fictitious capital. As Marx understood, fictitious capital plays a profoundly ambivalent role. On the one hand, it is a factor favouring capitalist development, to the extent that this anticipation operation allows the acceleration of the rhythm of capital accumulation. Here, we have the spirit of the nineteenth-century ‘banking school’, for whom the creation of money should respond to agents’ needs, as well as the spirit of the Keynesian approach, which considers that the full employment of economic resources does not happen all by itself. On the other hand, fictitious capital’s anticipation of future accumulation implies a radical form of fetishism liable to mutate into unsustainable phantasmagoria. The mass of accumulated fictitious capital can, then, assume proportions incompatible with the real production potential of economies. This reasoning is closer to that of the first theorists of fictitious capital, and indeed to Hayek. If this is indeed the case, then the over-accumulation of fictitious capital will inexorably lead to crisis.
Doomsday economics / climate change thread crossover:
Doomsday economics / climate change thread crossover:
quote:Figure 10 concerns a third type of fictitious capital: the stock-market capitalisation of listed domestic companies, whose value reflects the market valorisation of anticipated profits. The graph presents the pattern of stock-market capitalisation relative to GDP since 1975 for the main rich economies and since 1979 for our eleven-country average. Japan once again shows an atypical trajectory. After hitting a record level of 130 per cent in 1989, this ratio plunged to 53 per cent in 2002, after the bursting of the dotcom bubble. Conversely, the respective profiles of the other countries are relatively similar. The 1980s and 1990s saw a two-stage rise in the ratio, which reached its maximum in 2001, before falling in two further stages following the 2001 crunch and the crisis of 2008–9. Despite this partial reflux, the long-term rise is considerable. The mean ratio passed from 24 per cent in 1979 to 85 per cent in 2015, peaking at 111 per cent in 1999. This development was most impressive in the US and the UK, rising from 40 per cent and 35 per cent respectively in 1975 to 146 per cent for the US in 2014 and 112 per cent for the UK in 2012, after having peaked at 146 per cent and 171 per cent respectively in 2001. There was the same tendency in Germany, albeit at a much lower level: having stood at 10 per cent of GDP in 1975, stock-market capitalisation reached a level of 64 per cent by the millennium, before settling down at 47 per cent in 2014.
Crucially, the contemporary accumulation of fictitious capital on the stock markets is closely connected to the addiction to fossil fuels. Current market trends show capital’s projections for a future still based on carbon. Indeed, the hydrocarbon reserves claimed by the major oil companies very largely determine their valorisation, because they constitute the basis for forecasting future profits. However, according to IPCC estimates, if we are to keep the temperature rise beneath the 2°C limit, then we will have to leave somewhere between two-thirds and four-fifths of these reserves unused. Companies in the energy sector, together with those in the directly affected industrial sectors, represent close to one-third of worldwide stock-market capitalisation. Taking the political measures necessary to halt fossil fuel extraction would immediately result in a knock-on destabilisation of the financial markets. Bank of England governor Mark Carney warned as much in autumn 2015, when he evoked the ‘tragedy of the horizon’. He was referring to a ‘tragedy’ resulting from the fact that the likely effects of these changes lie beyond decision-makers’ own temporal horizons:
A wholesale reassessment of prospects, especially if it were to occur suddenly, could potentially destabilise markets, spark a pro-cyclical crystallisation of losses and a persistent tightening of financial conditions. In other words, an abrupt resolution of the tragedy of horizons is in itself a financial stability risk.5
Here, the preservation of fictitious capital on the stock market directly impedes the fight against global warming.
anime was right has issued a correction as of 06:25 on Aug 31, 2022
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Jan 4, 2021 00:16
