{"id":17810,"date":"2021-02-04T14:47:01","date_gmt":"2021-02-04T21:47:01","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=17810"},"modified":"2021-02-04T14:49:34","modified_gmt":"2021-02-04T21:49:34","slug":"what-professor-alexander-kurov-gets-wrong-about-gamestop-and-bubbles","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17810\/what-professor-alexander-kurov-gets-wrong-about-gamestop-and-bubbles\/","title":{"rendered":"What Professor Alexander Kurov Gets Wrong About Gamestop and Bubbles"},"content":{"rendered":"

Let’s start here;\u00a0 overregulation creates bubbles, not speculators.\u00a0 West Virginia University Professor of Finance, Alexander Kurov, offers an op-ed<\/a> which comes to the conclusion that speculation from Reddit bros could wreak havoc on capital markets:<\/p>\n

So markets fail sometimes, and we need sensible regulation and enforcement to make such failures less likely.<\/em><\/p>\n

Taken in isolation, the GameStop craze is unlikely to trigger a disruption to the overall stock market, especially if its price continues to fall more in line with the company\u2019s fundamental value. Unfortunately, this was not an isolated case. Nor was GameStop the first sign of problems.<\/em><\/p>\n

In recent days, Reddit users have also driven up the\u00a0prices of silver\u00a0SI00,\u00a0-2.28%\u00a0\u00a0and\u00a0companies\u00a0such as BlackBerry\u00a0BB,\u00a00.25%\u00a0and movie theater giant AMC Entertainment\u00a0AMC,\u00a0-18.63%.\u00a0Popular trading apps like Robinhood\u00a0have made trading easy, fun\u00a0and basically free.<\/em><\/p>\n

The share price of Tesla\u00a0TSLA,\u00a0-1.16%,\u00a0for example,\u00a0skyrocketed 720% last year, in large part when investors bought the stock because it was already rising. This is called\u00a0momentum investing, a trading strategy in which investors buy securities because they are going up \u2014 selling them only when they think the price has peaked.<\/em><\/p>\n

If this continues, it will likely lead to more financial bubbles and crashes that could make it harder for companies to raise capital, posing a threat to the\u00a0already limping U.S. economic recovery. Even if the worst doesn\u2019t happen, large price movements and allegations of price manipulation could hurt public confidence in financial markets, which would make people more reluctant to invest in retirement and other programs.<\/em><\/p>\n

At face value, his theory makes sense, especially in this “everyone is out of step but my Jimmy<\/a>” world which government, academia, and rent-seeking businesses created (let’s call them them “the Technocracy”, just to give them a name).\u00a0 \u00a0 I might ask the Professor to read Bastiat and Hazlitt<\/a>, and look for the unseen consequences of his conclusion\u00a0 You don’t have to look far to wonder why Reddit bros are trading speculative stocks like baseball cards.\u00a0 I attribute this populist interest in day-trading to three things:<\/p>\n

1- The Federal Reserve Banking System<\/strong>.\u00a0 Artificially low interest rates encourage borrowing over thrift.<\/p>\n

2- Cheaper Trading Platforms.<\/strong>\u00a0 Fintech has virtually eliminated all costs for active traders<\/a>.\u00a0 The knee-jerk Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Let’s start here;\u00a0 overregulation creates bubbles, not speculators.\u00a0 West Virginia University Professor of Finance, Alexander Kurov, offers an op-ed which comes to the conclusion that speculation from Reddit bros could wreak havoc on capital markets: So markets fail sometimes, and we need sensible regulation and enforcement to make such failures less likely. Taken in isolation, […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[251,379],"tags":[],"class_list":{"0":"post-17810","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-big-mother","7":"category-innovation","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":17816,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17816\/overnight-news-if-an-ibuyer-talks-you-into-taking-a-lowball-offer-in-the-midst-of-a-market-frenzy-how-sued-should-they-be\/","url_meta":{"origin":17810,"position":0},"title":"Overnight News: If an #iBuyer talks you into taking a lowball offer in the midst of a market frenzy, how sued should they\u00a0be?","author":"Greg Swann","date":"February 5, 2021","format":false,"excerpt":"The world I live in is routinely selling at around 5% over market: If a house lists at or above its current Fair Market Value, when it closes it will turn out to have sold for ~105% of FMV. That's bidding wars, and it's less the agents' skills than the\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":17789,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17789\/overnight-news-feel-something-in-your-eye-it-could-be-the-big-fat-thumb-of-the-ruling-class\/","url_meta":{"origin":17810,"position":1},"title":"Overnight News: Feel something in your eye? It could be the big fat thumb of the Ruling\u00a0Class.","author":"Greg Swann","date":"January 30, 2021","format":false,"excerpt":"Yesterday, the putative \"elite\" struck back \u2013 twice. Not for Gamestonk and not even for Trump, specifically, but simply to put you in your place. So, first, in response for a four-year domestic espionage and political interference operation unparalleled in American history, precisely one person was tried and convicted of\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":17783,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17783\/overnight-news-it-turns-out-hate-speech-means-mocking-the-dull-witted-elite\/","url_meta":{"origin":17810,"position":2},"title":"Overnight News: It turns out \u201chate speech\u201d means mocking the dull-witted\u00a0\u201celite.\u201d","author":"Greg Swann","date":"January 28, 2021","format":false,"excerpt":"If you're not following the GameStop saga, the first link is a better summary than you will find in the mainstream media. The whole episode is yet another sweet opportunity for the Ruling Class to expose itself as the Predator Class: They prey on you, fair game, but if turnabout\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":17786,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17786\/overnight-news-understanding-oligarchy-its-a-big-club-and-you-aint-in-it\/","url_meta":{"origin":17810,"position":3},"title":"Overnight News: Understanding oligarchy: \u201cIt\u2019s a big club, and you ain\u2019t in\u00a0it.\u201d","author":"Greg Swann","date":"January 29, 2021","format":false,"excerpt":"I saw this on Facebook, and it sums the world up perfectly: Are the people who can get trading stopped in the middle of a trading day the same people who can get vote counting stopped in the middle of an election night? Wall Street is red-pilling America so well\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":17794,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17794\/overnight-news-scaling-our-efforts-makes-us-richer-but-its-making-the-effort-that-makes-us-rich\/","url_meta":{"origin":17810,"position":4},"title":"Overnight News: Scaling our efforts makes us richer, but it\u2019s making the effort that makes us rich.","author":"Greg Swann","date":"February 1, 2021","format":false,"excerpt":"Single people produce about as much wealth as they consume. Married fathers produce around five times as much wealth as they consume. The wealth of the West emerges not from scaled productivity \u2013 the Dc innovations the marketplace worships \u2013 but from the friendly Ds competition among fathers to better\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2543,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2543\/which-candidate-gets-subprime\/","url_meta":{"origin":17810,"position":5},"title":"Which Candidate “gets” Subprime?","author":"Jim Duncan","date":"January 28, 2008","format":false,"excerpt":"Stimulus programs.\u00a0 Health care.\u00a0 Subprime.\u00a0 Which candidate \"gets\" the subprime fix in which we find ourselves?60 Minutes did quite the story this evening on the subprime problem, summed up with this quote:If it sounds like a shell game or Ponzi scheme, it was in a way.Ron Paul says:\u201cIf you believe\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/17810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=17810"}],"version-history":[{"count":5,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/17810\/revisions"}],"predecessor-version":[{"id":17815,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/17810\/revisions\/17815"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=17810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=17810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=17810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}