#great financial crisis

[mostlysignssomeportents]

Wall Street Journal goes to bat for the vultures who want to steal your house

Tonight (June 5) at 7:15PM, I’m in London at the British Library with my novel Red Team Blues, hosted by Baroness Martha Lane Fox.

Tomorrow (June 6), I’m on a Rightscon panel about interoperability.

The tacit social contract between the Wall Street Journal and its readers is this: the editorial page is for ideology, and the news section is for reality. Money talks and bullshit walks — and reality’s well-known anticapitalist bias means that hewing too closely to ideology will make you broke, and thus unable to push your ideology.

That’s why the editorial page will rail against “printing money” while the news section will confine itself to asking which kinds of federal spending competes with the private sector (creating a bidding war that drives up prices) and which kinds are not. If you want frothing takes about how covid relief checks will create “debt for our grandchildren,” seek it on the editorial page. For sober recognition that giving small amounts of money to working people will simply go to reducing consumer and student debt, look to the news.

But WSJ reporters haven’t had their corpus colossi severed: the brain-lobe that understands economic reality crosstalks with the lobe that worship the idea of a class hierarchy with capital on top and workers tugging their forelacks. When that happens, the coverage gets weird.

Take this weekend’s massive feature on “zombie mortgages,” long-written-off second mortgages that have been bought by pennies for vultures who are now trying to call them in:

https://www.wsj.com/articles/zombie-mortgages-could-force-some-homeowners-into-foreclosure-e615ab2a

These second mortgages — often in the form of home equity lines of credit (HELOCs) — date back to the subprime bubble of the early 2000s. As housing prices spiked to obscene levels and banks figured out how to issue risky mortgages and sell them off to suckers, everyday people were encouraged — and often tricked — into borrowing heavily against their houses, on complicated terms that could see their payments skyrocket down the road.

Once the bubble popped in 2008, the value of these houses crashed, and the mortgages fell “underwater” — meaning that market value of the homes was less than the amount outstanding on the mortgage. This triggered the foreclosure crisis, where banks that had received billions in public money forced their borrowers out of their homes. This was official policy: Obama’s Treasury Secretary Timothy Geithner boasted that forcing Americans out of their homes would “foam the runways” for the banks and give them a soft landing;

https://pluralistic.net/2023/03/06/personnel-are-policy/#janice-eberly

With so many homes underwater on their first mortgages, the holders of those second mortgages wrote them off. They had bought high-risk, high reward debt, the kind whose claims come after the other creditors have been paid off. As prices collapsed, it became clear that there wouldn’t be anything left over after those higher-priority loans were paid off.

The lenders (or the bag-holders the lenders sold the loans to) gave up. They stopped sending borrowers notices, stopped trying to collect. That’s the way markets work, after all — win some, lose some.

But then something funny happened: private equity firms, flush with cash from an increasingly wealthy caste of one percenters, went on a buying spree, snapping up every home they could lay hands on, becoming America’s foremost slumlords, presiding over an inventory of badly maintained homes whose tenants are drowned in junk fees before being evicted:

https://pluralistic.net/2022/02/08/wall-street-landlords/#the-new-slumlords

This drove a new real estate bubble, as PE companies engaged in bidding wars, confident that they could recoup high one-time payments by charging working people half their incomes in rent on homes they rented by the room. The “recovery” of real estate property brought those second mortgages back from the dead, creating the “zombie mortgages” the WSJ writes about.

These zombie mortgages were then sold at pennies on the dollar to vulture capitalists — finance firms who make a bet that they can convince the debtors to cough up on these old debts. This “distressed debt investing” is a scam that will be familiar to anyone who spends any time watching “finance influencers” — like forex trading and real estate flipping, it’s a favorite get-rich-quick scheme peddled to desperate people seeking “passive income.”

Like all get-rich-quick schemes, distressed debt investing is too good to be true. These ancient debts are generally past the statute of limitations and have been zeroed out by law. Even “good” debts generally lack any kind of paper-trail, having been traded from one aspiring arm-breaker to another so many times that the receipts are long gone.

Ultimately, distressed debt “investing” is a form of fraud, in which the “investor” has to master a social engineering patter in which they convince the putative debtor to pay debts they don’t actually owe, either by shading the truth or lying outright, generally salted with threats of civil and criminal penalties for a failure to pay.

That certainly goes for zombie mortgages. Writing about the WSJ’s coverage on Naked Capitalism, Yves Smith reminds readers not to “pay these extortionists a dime” without consulting a lawyer or a nonprofit debt counsellor, because any payment “vitiates” (revives) an otherwise dead loan:

https://www.nakedcapitalism.com/2023/06/wall-street-journal-aids-vulture-investors-threatening-second-mortgage-borrowers-with-foreclosure-on-nearly-always-legally-unenforceable-debt.html

But the WSJ’s 35-paragraph story somehow finds little room to advise readers on how to handle these shakedowns. Instead, it lionizes the arm-breakers who are chasing these debts as “investors…[who] make mortgage lending work.” The Journal even repeats — without commentary — the that these so-called investors’ “goal is to positively impact homeowners’ lives by helping them resolve past debt.”

This is where the Journal’s ideology bleeds off the editorial page into the news section. There is no credible theory that says that mortgage markets are improved by safeguarding the rights of vulture capitalists who buy old, forgotten second mortgages off reckless lenders who wrote them off a decade ago.

Doubtless there’s some version of the Hayek Mind-Virus that says that upholding the claims of lenders — even after those claims have been forgotten, revived and sold off — will give “capital allocators” the “confidence” they need to make loans in the future, which will improve the ability of everyday people to afford to buy houses, incentivizing developers to build houses, etc, etc.

But this is an ideological fairy-tale. As Michael Hudson describes in his brilliant histories of jubilee — debt cancellation — through history, societies that unfailingly prioritize the claims of lenders over borrowers eventually collapse:

https://pluralistic.net/2022/07/08/jubilant/#construire-des-passerelles

Foundationally, debts are amassed by producers who need to borrow capital to make the things that we all need. A farmer needs to borrow for seed and equipment and labor in order to sow and reap the harvest. If the harvest comes in, the farmer pays their debts. But not every harvest comes in — blight, storms, war or sickness — will eventually cause a failure and a default.

In those bad years, farmers don’t pay their debts, and then they add to them, borrowing for the next year. Even if that year’s harvest is good, some debt remains. Gradually, over time, farmers catch enough bad beats that they end up hopelessly mired in debt — debt that is passed on to their kids, just as the right to collect the debts are passed on to the lenders’ kids.

Left on its own, this splits society into hereditary creditors who get to dictate the conduct of hereditary debtors. Run things this way long enough and every farmer finds themselves obliged to grow ornamental flowers and dainties for their creditors’ dinner tables, while everyone else goes hungry — and society collapses.

The answer is jubilee: periodically zeroing out creditors’ claims by wiping all debts away. Jubilees were declared when a new king took the throne, or at set intervals, or whenever things got too lopsided. The point of capital allocation is efficiency and thus shared prosperity, not enriching capital allocators. That enrichment is merely an incentive, not the goal.

For generations, American policy has been to make housing asset appreciation the primary means by which families amass and pass on wealth; this is in contrast to, say, labor rights, which produce wealth by rewarding work with more pay and benefits. The American vision is that workers don’t need rights as workers, they need rights as owners — of homes, which will always increase in value.

There’s an obvious flaw in this logic: houses are necessities, as well as assets. You need a place to live in order to raise a family, do a job, found a business, get an education, recover from sickness or live out your retirement. Making houses monotonically more expensive benefits the people who get in early, but everyone else ends up crushed when their human necessity is treated as an asset:

https://gen.medium.com/the-rents-too-damned-high-520f958d5ec5

Worse: without a strong labor sector to provide countervailing force for capital, US politics has become increasingly friendly to rent-seekers of all kinds, who have increased the cost of health-care, education, and long-term care to eye-watering heights, forcing workers to remortgage, or sell off, the homes that were meant to be the source of their family’s long-term prosperity:

https://doctorow.medium.com/the-end-of-the-road-to-serfdom-bfad6f3b35a9

Today, reality’s leftist bias is getting harder and harder to ignore. The idea that people who buy debt at pennies on the dollar should be cheered on as they drain the bank-accounts — or seize the homes — of people who do productive work is pure ideology, the kind of thing you’d expect to see on the WSJ’s editorial page, but which sticks out like a sore thumb in the news pages.

Thankfully, the Consumer Finance Protection Bureau is on the case. Director Rohit Chopra has warned the arm-breakers chasing payments on zombie mortgages that it’s illegal for them to “threaten judicial actions, such as foreclosures, for debts that are past a state’s statute of limitations.”

But there’s still plenty of room for more action. As Smith notes, the 2012 National Mortgage Settlement — a “get out of jail for almost free” card for the big banks — enticed lots of banks to discharge those second mortgages. Per Smith: “if any servicer sold a second mortgage to a vulture lender that it had charged off and used for credit in the National Mortgage Settlement, it defrauded the Feds and applicable state.”

Maybe some hungry state attorney general could go after the banks pulling these fast ones and hit them for millions in fines — and then use the money to build public housing.

Catch me on tour with Red Team Blues in London and Berlin!

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/06/04/vulture-capitalism/#distressed-assets

[Image ID: A Georgian eviction scene in which a bobby oversees three thugs who are using a battering ram to knock down a rural cottage wall. The image has been crudely colorized. A vulture looks on from the right, wearing a top-hat. The battering ram bears the WSJ logo.]

[arizariz00]

[ruvviks]

do people have money for commissions. stares at you blankly

[mostofthingsmostofthetime]

The rescent riots in the UK are despicable (but sadly not surprising).

Yes, what happened to those little girls is a tradgey, but the person who was responsible wasn't an asylum seeker, and even if he was, that would NOT excuse the racism displayed these past few weeks.

The people taking part clearly don't care about the safety of children as they're, scaring other people's & indoctrinationating their own into perpetuating racist acts.

Seven years is a lot, though! Then don't fucking join a hate group.

But the non white people are being violent too! Yeah, well, that tends to happen when you attack people. I'm not going to hate on people for standing up for themselves.

They're taking our jobs! Why do you believe that those jobs are YOURS? Are you actually qualified & able to make a good impression on bosses, or do you think just being white should be enough.

They don't work! Well Asylum seekers litrually aren't allowed to until their case gose through but plenty of other POC have jobs (I know you've seen them though it must be hard to make them out through that fog of hatred) & I've met plenty of white people who don't want to (no hate to those who can't because of disability or mental health issues) or loose jobs because they're just overall terrible employees (some of the shit I've seen middle aged white people do at their jobs is crazy).

They're all criminals! Well, that's just not true now is it plus it's been proven multiple times that the biggest factor in crime is poverty, NOT race & again I've encountered plenty of white people who've broken the law yet most didn't seem to get more than a slap on the wrist (if that). Strange, that isn't it?

Well, "those kinds" of men hate women! Ahh, yes, because there's never been white rapists, woman killers, stalkers or harrasers. Its been proven that hating women is a problem in all races & and sadly, the biggest threat to us is usually our own partners or family, not some random aylsum seeker (who if they do hurt women tend to go after the ones from their own community).

They're not from here! Ok, so I don't know if anyone told you, but you can actually be born here without being white and you can't ban people from a country just because of the colour of their skin. Also, neither was half my family, yet we never get told to go back to our own country. Hmm, I wonder if our white skin could possibly have anything to do with that.

They can't speak English! A lot of them are multilingual, actually (& you make fun of their accents) & for the ones who can't well you seem to hate them getting anything (such as English lessons) for free. Also, how many Brits go abroad despite refusing to learn absolutely anything about other countries (there's a reason we're known as disrespectful, violent, sex obsessed, drunks by most of the world).

Also sooner or later we are going to have to accept that a lot of the issues that make immigrants flee their home countries are caused (or at least made worse) by ours & other Western governments.

This country definitely has problems, but we should be taking them up with politicians & their rich mates. Who are the ones actually hording wealth made from the exploitation of the poor, not random people of colour who are just trying to live their lives.

[bitchesgetriches]

If you found this helpful, consider joining our Patreon!

[if-you-fan-a-fire]

"AND THE FLOODS CAME, AND THE WINDS BLEW"," A. G. Racey, Montreal Star. January 17, 1933. ---- The DEPRESSION STORM crashes against the rocks of the CANADIAN BANKING SYSTEM, atop which sits serenely CANADIAN BANKS

[spiral-wizard]

Currently at a crossroads with a lot of stuff I would really rather not be facing and this time in my life happens to coincide with a reunion of my dad's side of the family that has been planned for months. I have been mostly estranged from these folks for most of my adult life and have been trying to rebuild a bit in recent years... They all live very different (and successful) lives though and it's so hard for me to feel like a part of the family

[mostlysignssomeportents]

The seductive, science fictional power of spreadsheets

Tomorrow (Apr 30) at 2PM, I’ll be at the San Francisco Public Library with my new book, Red Team Blues, hosted by Annalee Newitz.

This week, John Scalzi was kind enough to let me write a guest-editorial for his Whatever blog about the themes in my new crime technothriller, Red Team Blues; specifically, about the ways that spreadsheets embody the power and the pitfalls of science fiction at its best and worst:

https://whatever.scalzi.com/2023/04/26/the-big-idea-cory-doctorow-2/

If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/04/29/gedankenexperimentwahn/#high-on-your-own-supply

Yes, spreadsheets. Marty Hench (the protagonist of Red Team Blues) is a 67-year-old forensic accountant who specializes in unwinding Silicon Valley financial frauds, a field he basically invented 40 years ago, when, as a PC-struck MIT dropout, he moved from Cambridge to San Francisco to recover the stolen millions hidden in spreadsheets.

Working through this book — and its two sequels, which travel back in time to the 1980s and Marty’s first encounters with VisiCalc and Lotus 1–2–3 — I was struck by the similarities between spreadsheets and science fiction.

While many people use spreadsheets as an overgrown calculator, adding up long columns of numbers, the rise and rise of spreadsheets comes from their use in modeling. Using a spreadsheet, a complex process can be expressed as a series of mathematical operations: we put these inputs into the factory and we get these finished goods. Once the model is built, we can easily test out contrafactuals: what if I add a third shift? What if I bargain harder for discounts on a key component? If I give my workers a productivity-increasing raise, will the profits make up for the costs?

These are the questions that anyone managing a complex system asks themselves all the time. Historically, the answers have sprung from intuition, from fingerspitzengefühl — the “fingertip feeling” of how a system’s components work and what their potential and limitations are. But intuition can calcify, become a rigid set of rules that increasingly diverge from the best strategy.

By contrast, spreadsheets yield a set of crisp, instantly tallied answers to any question you put to them. Change the input and watch as that change ripples through the whole system in an eyeblink. If you’re adding three more people to your camping trip, will the amount of additional water require renting another vehicle? No need to guess: just check and see.

This has a lot in common with science fiction, a genre full of thought experiments that ask Heinlein’s famous three questions:

What if?

If only, and

If this goes on…

These contrafactuals are incredibly useful and important. As critical tools, science fiction’s parables about the future are the best chance we have for resisting the inevitabilism that insists that technology must be used in a certain way, or must exist at all. Science fiction doesn’t just interrogate what the gadget does, but who it does it for and who it does it to:

https://pluralistic.net/2023/03/20/love-the-machine/#hate-the-factory

One of science fiction’s key methods comes from sf grandmaster Theodore Sturgeon: “ask the next question.” Ask a question, then ask “what happens next?” Do it again, and again, and again:

https://christopher-mckitterick.com/Sturgeon-Campbell/Sturgeon-Q.htm

This technique produces excellent, critical ways of interrogating technological narratives — check out this delightful example of the possible pipeline from self-driving cars to ransomware gangs to mutual aid societies to the reinvention of the train:

https://dduane.tumblr.com/post/715940904747352064/you-can-make-your-mercedes-ev-go-faster-for-60-a

The commonalities between sf and spreadsheets don’t stop there — sf and spreadsheets share pitfalls, too. A spreadsheet is a model and a model is not the thing it models. The map is not the territory. Every time a messy, real-world process is converted to a crisp, mathematical operation, some important qualitative element is lost.

Modeling is an intrinsically lossy operation. That’s why “all models are wrong, but some models are useful.” There is no process so simple that it can be losslessly converted to a model. Even the actions of the nanoscale transistors in a microchip, which toggle between “0” and “1,” are rarely in a state of “no voltage” and “voltage.” That clean, square-wave line that’s used to describe what happens in a chip is a lie — that is to say, it is a model.

The wave isn’t square, it’s a squiggly line that hovers around zero and around one. Under normal circumstances, “zero” and “zero-ish” is a distinction without a difference. But when computers go wrong, it’s sometimes because a sufficiently ambiguous “zero-ish” acts like a “one.” That’s true all the way up the stack. On engineering diagrams, the nanoscale lines that electrons travel along inside a chip are represented as sharp paths, the kind of thing a Tron-cycle would lay down. But in the real world, we get all kinds of weird effects at that scale — electrons sometimes tunnel through those lines, performing a spooky quantum trick that reminds us that Newtononian physics are also just a model.

Every real-world phenomenon contains qualitative and quantitative elements, but computers can only do math on the quantitative parts. This creates a powerful temptation to incinerate the qualitative and perform operations on whatever dubious quantitative residue is left in the crucible, often with disastrous results.

Remember during lockdown, when a pair of University of Illinois at Urbana-Champaign physicists produced a model of covid spread that predicted that the campus could safely reopen, predicting no more than 500 cases over the entire semester and no more than 100 cases at any one time? The physicists were openly contemptuous of their epidemiologist peers, saying that this kind of model making lacked the “intellectual thrill” of real science.

UI was so swayed by the crisp, precise model that they invited students back to campus — only to shut down again in a matter of weeks, with 780 active cases on campus and more rolling in every day.

The model reduced qualitative factors — like the propensity of undergrads to get drunk, take off their masks, and lick each others’ eyeballs — to a quantitative probability, using the highly precise, scientific technique of taking a wild-ass guess. That guess was wrong. The campus reopening was a super-spreader event.

Any model runs the risk of hiding the irreducible complexity of qualitative factors behind a formula, turning uncertainty into certainty and humility into arrogance.

Think of how we replaced contact tracing with exposure notification. Contact tracing has a qualitative foundation: public health workers establish rapport with infected people, win their trust, and get them to fully enumerate the places they’ve been and the activities they participated in.

By contrast, exposure notification measures whether two Bluetooth radios were within range of each other for a predetermined interval. It substitutes signal strength for a person’s own understanding of their experience. Now, people can be wrong about their own experience — we lose track of time, we misremember emotionally charged events, and so on — but that doesn’t mean we can substitute Bluetooth measurements for personal experience.

That’s why, despite all the clever privacy-preserving math and interesting analysis, exposure notification was a bust, something between a distraction and a false-confidence-generating disaster. Contact tracing ended the 2014 ebola outbreak. Exposure notification just wasted a lot of time:

https://locusmag.com/2021/05/cory-doctorow-qualia/

It’s just too easy to forget which parts of a model are based on guesses and which parts are based on ground truth. And even if you can keep track of those differences, it’s even harder to re-check the model’s ground truth to determine whether the underlying factors have changed. That’s how we got into so much trouble with collateralized debt obligations, which were supposed to be “risk-free” mortgage derivatives that could be safely insured and invested in.

The formulas behind CDO hedging were designed by some of the world’s smartest mathematicians and physicists, who simply assumed that market actors — from loan-originating bank officers to insurance underwriters — would act in reliable, predictable ways. They were so very wrong that they brought the world economy to the brink of ruin:

https://www.wired.com/2009/02/wp-quant/

This is also science fiction’s failure-mode: any science fictional “ask-the-next-question” exercise represents a series of guesses or speculations or maybe possibilities — but when you combine that guesswork with the deceptive certainty that comes from inhabiting a cracking story, it’s easy to mistake “guessing” for “prediction.”

Prediction is hard, especially about the future. The assumptions that go into a prediction are always incomplete, not least because human beings have free will and agency and can change the circumstances that go into the assumptions. The very best science fiction embodies this principle. I’m thinking here of the likes of Ada Palmer, an historian and sf writer whose deep historical knowledge informs her sf and her pedagogy at the University of Chicago:

https://pluralistic.net/2022/02/10/monopoly-begets-monopoly/#terra-ignota

Palmer is famous — even notorious — for her annual four-week undergraduate LARP in which students re-enact the election of the Medicis’ Pope. It’s four weeks of alliances, betrayal and skullduggery by the students, each of whom is enacting the agenda of a real-world Cardinal or other power-broker.

The final investiture is done in full costume at the university’s massive faux-gothic cathedral, and going into that climax, of the four candidates, two are always the same, because the great forces of history are bearing down on that moment to ensure that the champions of the two dominant power-blocs are in the running. But the other two? They’re never the same — because the agency of the actors jockeying for power change the outcome, every single time, in absolutely unpredictable ways.

Like any other model, sf is wrong, but sometimes useful. Thinking about jetpacks and flying cars is “useful” insofar as it gets us to interrogate how we think about cities, about mobility, about privilege and geography. But it’s not a prediction. Worse, the endless tales in which flying cars are presented a fait accompli is a gift to grifters raising money for the objectively stupid idea of flying cars. After all, we all know flying cars are inevitable, so it’s basically a risk-free investment, right? With flying cars just around the corner, wouldn’t it be irresponsible to build a city with mass-transit instead of helipads?

There’s a whole range of thought-experiments that got transformed into predictions and then certainties: self-driving cars, “general artificial intelligence,” infinite life-extension, space colonization, faster-than-light travel, cryptocurrency, etc etc.

Spreadsheets don’t just lead their users astray — they also trick their creators. The very same people who transform wild-assed guesses about hairy, unknowable outcomes into neat mathematical relationships are perfectly capable of acting as if those relationships are based on fact, rather than supposition. The Great Financial Crisis wasn’t just about people who didn’t understand the uncertainty in the hedging algorithm going all-in — the people who made those models were also fooled by them.

It’s very easy to get high on your own supply. I’ll never forget the sf convention panel I was on with Robert Silverberg about sf’s supposed predictive value, where the subject of Robert A Heinlein came up, and Silverberg sniffed, and, in that trademark bone-dry way of his, said, “Ah yes, ‘Robert A Timeline.’”

Sf isn’t just full of writers who mistake their suppositions for predictions — the canon is full of tales in which brilliant people can and do predict the future, with near-perfection. Think of Hari Seldon, the hero of Asimov’s Foundation series, who is able to forecast the future several millennia out. Or Heinlein’s first-ever story, “Life-Line,” in which a genius inventor destroys the insurance industry by creating a computer that can predict your exact date of death using statistical methods.

There’s something wild about this phenomenon, in which writers make stuff up and then assume that anything that cool must also be accurate. One tantalizing explanation for this comes from EL Doctorow’s (no relation) essay “Genesis,” from his 2007 collection “The Creationists”:

https://www.penguinrandomhouse.com/books/41520/creationists-by-e-l-doctorow/

Doctorow tells the history of the Genesis story, which the Hebrews plagiarized from the Babylonians. In Doctorow’s telling, the Babylonian mystics who made up the Genesis story assumed that it had to be true, because they considered themselves to be nowhere near imaginative enough to have come up with something as great as Genesis. An idea that amazing had to be divinely inspired.

I like this because it’s a story of being led astray by humility, rather than hubris.

Imaginative exercises — whether or not they are assisted by mathematical models and self-updating digital spreadsheets — are powerful tools for thinking about the future we want, and to guide our attempts to make that future come true. All models are wrong but some models are useful, of course!

I’m on tour with Red Team Blues right now — I’m writing this post while waiting for my flight to San Francisco, where I’m appearing at the public library with Annalee Newitz tomorrow (4/30) at 2PM:

https://sfpl.org/events/2023/04/30/author-cory-doctorow-and-annalee-newitz-conversation-red-team-blues

One especially fun stop on this tour will be on May 5, at the Books, Inc in Mountain View, where I’ll be talking about the book with Mitch Kapor, the creator of Lotus 1–2–3, who knows a thing or two about spreadsheets:

https://www.booksinc.net/event/cory-doctorow-books-inc-mountain-view

The tour is bringing me to Berkeley, Vancouver, Calgary, DC, Gaithersburg, Toronto, PDX, Nottingham, Hay, London, Manchester, Edinburgh and Berlin — I hope to see you!

https://craphound.com/novels/redteamblues/2023/04/26/the-red-team-blues-tour-burbank-sf-pdx-berkeley-yvr-edmonton-gaithersburg-dc-toronto-hay-oxford-nottingham-manchester-london-edinburgh-london-berlin/

Catch me on tour with Red Team Blues in Mountain View, Berkeley, San Francisco, Portland, Vancouver, Calgary, Toronto, DC, Gaithersburg, Oxford, Hay, Manchester, Nottingham, London, and Berlin!

[Image ID: A Lotus 1-2-3 spreadsheet with green-on-black, low-res type; its center has an irregular vignette revealing a space station.]

[lurkiestvoid]

yeahhhhh pretty much, except the only thing is it's less individual investors and more Hedge Funds.

Hedge funds use algorithms to maximize profits by any means necessary, up to and including certain tactics that will deliberately tank a stock. If it's not performing well or if they just don't want it to, they can bet against it and whip out a variety of bullshit of varying legality to push the share price down, which causes other HFs to sell to stay ahead of the market, which leads portfolio managers and accountants and regular folks to sell, and then when the selloffs are done the original HFs make fucking bank off strangling the stock. (This also works in reverse: betting a stock will rise, baiting others to buy in, profit, then bet against it again)

So a "strong" company is one with lots of gains and very few/short losses (harder to break/less room to manipulate, generally Big Name stocks like Disney/Apple/etc) whereas a "weak" company with more losses than gains or lots of volatility is a prime target for the piranhas. The people running companies are terrified of stagnation, let alone losses, because it can very, very easily be taken advantage of and even outright kill the company in just a few weeks or months. Perpetual growth is virtually required to survive the market as it is today.

Individual, casual/hobbyist investors with at most a couple dozen shares in a handful of companies don't have the numbers/margins to seriously affect a stock price. Even hobbyist/semipro "traders" who obsess/hoard and attempt to imitate The Big Guys are comparitively few in number and just don't have the weight to affect much more than their own account balance. But hedge funds do have MASSIVE weight in the market, throwing around thousands of shares at a time, several times a day, for dozens of different tickers, in multiple markets and across multiple industries.

And then there are "market makers." These are giant companies whose SOLE purpose is to manipulate the market ensure "market liquidity," or, "a buy for every sell, a sell for every buy." What this means is that if demand is high but there aren't enough shares available to sell, they make more by "borrowing" them, potentially infinitely. If these market makers feel a stock is too "overvalued," they can dump loads of those borrowed shares to saturate the market and drive the price back down. There is extremely little regulation on this, which leads to situations where the same one share can have dozens or hundreds of "owners."

This can happen because regular everyday investors don't actually "own" stock at all. Like, very literally, their "shares" are 1) not real and 2) can be liquidated by their brokers at any time, because, as the go-between third party, their brokers own the shares "on their behalf," and brokers essentially just "deliver" digital IOUs. All Actual Real Shares are held in the DTCC by a company called Cede & Co, and everything else is traded on credit.

If you buy a "share" in a company through a broker, it's not your name on the company shareholder list, it's your broker's. If you're submitting paperwork to your broker for voting for that company's policies at their annual meeting, your broker is pooling aaaaall the votes and "proportionally" voting "on your behalf." And your broker can decide to lend out your shares without telling you (to their own profit) and you may or may not ever get them back -- this is called "failure to delivers" or FTDs and there is a massive backlog of them that just ... never get addressed.

this is hella over-summarized and sloppy but the tl;dr is that supply and demand economics are beyond broken, the entire stock market is more fake than you ever imagined, it's propped up entirely by computer programs trading IOUs-of-IOUs-of-IOUs, and is easily manipulated at the literal whim of bank-and-billionaire proxies.

companies really have got to be okay with stagnant profits. what is wrong with earning the same amount every year? why does it always have to be more? it's not sustainable. there are only so many people on the planet you can profit from 😭

[vanillabat99]

It has been 8 months since I lost insurance coverage, after the insurance people said there shouldn't be a lapse, and it has been complete radio silence from them. I have been put on generic government coverage, which really isn't much when you're not able bodied 🙃

The next time I hear someone say Canada has "✨Free Universal Healthcare✨" they're gonna have to pay my medical expenses.

[madigoround]

I’m literally just venting below to get it out of my head feel free to ignore

[peachmuffinsquish]

Here's the thing: imagine if we fixed the housing market, so that the price of housing only increased to match inflation. That would be great, right? Except, homeowners typically spend $2000-$10000 per year on maintenance. So homeownership would go from an investment to an endless money pit, just like renting. The idea of a house as an investment, a house as a way to build wealth, requires that housing prices increase faster than inflation forever, which means that the burden of housing costs on working people must keep increasing forever, and the number of homeless people must keep increasing forever.

The housing crisis isn't just a result of greedy landlords and investors. It's an inevitable result of social policies that encourage people to treat their houses as in investment. Because once a homeowner internalizes the idea that their financial future depends on housing prices going up, they start favoring policies (such as NIMBYism) that make housing prices go up.

Conversely, if we want to end homelessness for good, we need to accept that housing is someone we'll all have to continuously pour resources into, because buildings are complex physical objects that break a lot.

[soon-palestine]

[peppers-ghost-posts]

Banks are predatory scum

[if-you-fan-a-fire]

“THIS IS HOW SCRIP WILL LOOK,” Toronto Star. March 7, 1933. Page 2. ---- This one dollar scrip that has been in use for some time in Atlantic City, N.J.. gives an idea of the new scrip in all parts of the country now that President Roosevelt has proclaimed notes of exchange that will be used a national bank holiday.