We could be into the last 10 days of the Euro according to the Financial Times...

Hayte

Its not about the money, is that what you are saying? I mean seriously?

K-9

Permabear wrote: »

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So the money is just a sideshow? Yeah?

If they earned minimum wage they'd still do it.

Scofflaw

Permabear wrote: »

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So someone who bets against the favourite in a race is "a heretic, a truth-teller, a dissenter"...

my other leg is jingling,
Scofflaw

Valmont

All of this criticism presupposes that wanting money is a bad thing. Considering you wouldn't have green subsidies, welfare programs, and gold plated civil service pensions without the money grabbers and business-people of the private sector "idealising" money in the first instance... well that's another argument.

I just can't see the Euro being destroyed within the next few days. My own prediction that nobody here seems to talk about is that they will probably hit the printing presses* sooner or later. I don't see any other option.

*or Eurobonds, quantitative easing, monetisation of debt, liquidity injections, and a host of other benign sounding synonyms.

Scofflaw

Valmont wrote: »

All of this criticism presupposes that wanting money is a bad thing. Considering you wouldn't have green subsidies, welfare programs, and gold plated civil service pensions without the money grabbers and business-people of the private sector "idealising" money in the first instance... well that's another argument.

I just can't see the Euro being destroyed within the next few days. My own prediction that nobody here seems to talk about is that they will probably hit the printing presses* sooner or later. I don't see any other option.

*or Eurobonds, quantitative easing, monetisation of debt, liquidity injections, and a host of other benign sounding synonyms.

No, it doesn't require that wanting money be a bad thing. But wanting money and dressing it up as some kind of noble fight against oppression is hilarious, sad, and more than a little nausea-inducing.

Wanting to eat a cake isn't a bad thing either - but if someone seriously tells me they're only eating cake because they're "a heretic, a truth-teller, a dissenter" then my response will be derisive. Cake is nice, money is nice - dressing up your liking for either of them as some kind of noble existential struggle is...well, hilarious, sad, and more than a little nausea-inducing.

cordially,
Scofflaw

Permabear

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Scofflaw

Permabear wrote: »

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If speculators always won, they wouldn't be speculators, though.

cordially,
Scofflaw

Permabear

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Liam Byrne

Scofflaw wrote: »

It also isn't perfect because it's possible for someone to professionally benefit from a situation that they personally dislike. The undertaker, if they like your mother, may be genuinely sad even though they professionally benefit form her death.

Cynicism isn't the same as scepticism.

Is that not what I said ? That's covered by the fact that I said that the undertaker isn't deliberately impacting on your mother; they are just doing their actual public service; a service we could not (excuse the pun) live without.

Speculation, on the other hand, is about impacting on others - in many cases very deliberately and consequentially - for no reason other than to make money, and are not interested in performing any worthwhile service other than lining their own pockets, regardless of the casualties.

So - as I said - speculation can involve injecting the cyanide needle in the hope of a quick buck, and feck the consequences for others.

Permabear

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Permabear

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Liam Byrne

Valmont wrote: »

All of this criticism presupposes that wanting money is a bad thing.

That's a serious simplification.

Wanting "enough" money isn't a bad thing; wanting too much is.

The problem is that very view people can define too much, and they don't care whose it was before they got their hands on it, or who foots the bill.

Permabear

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Liam Byrne

Permabear wrote: »

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Wrong.

As I have stated repeatedly, if you CONTRIBUTE to society or take a gamble on whether something is worthwhile, then you deserve a reward for that.

If, on the other hand, you buy up stuff in order to sell it at a profit later when the lack of supply - caused by your intervention - raises the price, then you are negatively impacting on society.

So my view is nowhere near as black and white as you're trying to imply.

Speculators who gamble on an oil field being viable and foot the bill for exploration are not a bad thing.

Speculators who restrict the availability of oil or currency are.

Liam Byrne

Permabear wrote: »

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Unless someone is printing money, then there is only so much to go around.

And I never implied "stolen", so do not put words in my mouth.

Neither am I "left"; extremes are not workable.

Permabear

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Liam Byrne

Permabear wrote: »

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I do. A perfect example being the property market here, where speculators bought up houses in order to make a quick killing., preventing families from buying them for a reasonable amount.

So there's no need to be - yet again - patronising towards people with different views to yours.

Permabear

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Liam Byrne

Permabear wrote: »

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Well, if they sold on the houses, they got paid.

Personally though I don't care what happened the vultures.

Although some of them apparently got cushy jobs "advising" NAMA - paid for by the taxes of the same people they screwed! Go figure!

Mr.Micro

Liam Byrne wrote: »

Well, if they sold on the houses, they got paid.

Personally though I don't care what happened the vultures.

Although some of them apparently got cushy jobs "advising" NAMA - paid for by the taxes of the same people they screwed! Go figure!

Nama has saved many of them and their lousy clients. Another big cozy club.

djpbarry

Permabear wrote: »

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You mean the success of the banking sector?

Permabear wrote: »

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Speculators and investors are not the same thing.

carveone

Interesting thread. I'd like to know the difference between speculators and investors in people's minds. Is an investor someone who puts money in and never expects it back? Or is an investor one who lives off, say, dividends and has no intention of selling?

My view of speculation is that of assuming a large risk in anticipation of a larger gain. In other words it's solely a matter of risk. That's not the way the extreme left like SF and ULA see it - they see any investment of any sort as some sort of bad thing.

There are many people out there who believe markets and capitalism and free trade are a good thing. Indeed, one could find it hard to argue that people living now are living better than at any time in history. But I think that explosion in living standards came about by attaching the capitalism jet engine to social equality (I read that in a book somewhere recently - can't remember where!). In the US, for the last 20 years, since Reagan in fact, that connection has been cut.

This allowed an unfettered capitalism to sive money upwards to the top 0.1% who, when it all went wrong, were allowed to switch to a temporary socialist model and avail of state funds. This is unacceptable. This is not free markets. This isn't even rampant speculation (whatever you think that means). This is socialism for the top 0.1% - assume whatever risk model you like, there are no consequences.

It's not speculation when the outcomes are predetermined.

View

carveone wrote: »

Interesting thread. I'd like to know the difference between speculators and investors in people's minds. Is an investor someone who puts money in and never expects it back? Or is an investor one who lives off, say, dividends and has no intention of selling?

I think it can be explained by the old trick of declining the verb "invest". It goes as follows:

• I invest,
• You speculate,
• He/She gambles recklessly (by loaning money to a "AAA-rated" bank such as Anglo)

Hayte

I work in law and I've seen the kind of investment schemes like land development partnerships where x individuals put in equity, builder throws up a shambolic collection of houses and then the sales rest on contract to avoid stamp duty. I've seen the terrible implications of it when they have been misrepresented, when there is conflict of interest issues, when its all just done like "put in money, get out money" and everything in between is cutting corners, skirting laws, dodging tax. And you know what? I don't see anything created in this. Only a five figure profit for people with enough money to pitch in a 5 figure sum if you gambled right.

I know it happens in the US too, on a much larger scale than in Ireland because it is facilitated by that fraudulent disaster of a system you call MERS - an industrial scale government stamp duty avoidance scheme to facilitate the transfer of large numbers of property (in big RMBS packages) without having to assign all the of the individual property rights as well.

All of those MERS mortgaged Florida sinkhole shacks are less than worthless. They are a blight on the land and none of them have clear title. I don't see anything created in this. I don't see any benefit or utility to it that isn't profit motivated by private interests. I don't see any skill in the structuring of these schemes, most of which cut so many corners in proper conveyancing practice that purchasers literally have no rights at all and sellers are incredibly exposed to litigious claims because there the paper title is so poorly established.

Maybe its because I work in an environment that every day sees the negative and failed consequences of investment schemes gone bad, that I find the whole John Galt/god's work thing so offensive.

Valmont

Scofflaw wrote: »

No, it doesn't require that wanting money be a bad thing. But wanting money and dressing it up as some kind of noble fight against oppression is hilarious, sad, and more than a little nausea-inducing.

The productive members of society are taxed by some in the name of those who condemn the entrepreneurial urge as "greedy" whilst simultaneously trying to get a cut of the profits for their own ends. So—relatively speaking—these productive individuals are quite noble, heroic, and admirable; but only when compared to the parasites who castigate them and then have the cheek to reach into their pocket afterwards.

Quite like the rapist calling his victim a slut, really.

Now that's nausea-inducing.

Scofflaw

carveone wrote: »

Interesting thread. I'd like to know the difference between speculators and investors in people's minds. Is an investor someone who puts money in and never expects it back? Or is an investor one who lives off, say, dividends and has no intention of selling?

My view of speculation is that of assuming a large risk in anticipation of a larger gain. In other words it's solely a matter of risk. That's not the way the extreme left like SF and ULA see it - they see any investment of any sort as some sort of bad thing.

There are many people out there who believe markets and capitalism and free trade are a good thing. Indeed, one could find it hard to argue that people living now are living better than at any time in history. But I think that explosion in living standards came about by attaching the capitalism jet engine to social equality (I read that in a book somewhere recently - can't remember where!). In the US, for the last 20 years, since Reagan in fact, that connection has been cut.

This allowed an unfettered capitalism to sive money upwards to the top 0.1% who, when it all went wrong, were allowed to switch to a temporary socialist model and avail of state funds. This is unacceptable. This is not free markets. This isn't even rampant speculation (whatever you think that means). This is socialism for the top 0.1% - assume whatever risk model you like, there are no consequences.

It's not speculation when the outcomes are predetermined.

While I like View's version, I'd say dividing "speculators" from "investors" is a combination of intent, duration, and outcome, since in general 'speculator' is intended negatively while 'investor' is intended positively.

To take a very old definition from many Medieval city statutes - someone who puts money into a voyage to buy grain for a city, intending to make a profit thereby, is an investor. If the grain arrives at a time of scarcity, they will make a larger profit.

On the other hand, someone who buys up grain, intending to sell it for high prices during a time of scarcity, is a speculator. Someone who buys up grain before it reaches the city in a time of scarcity, intending to sell it at high prices in the city, is also a speculator. Either of these was often a criminal act under city statutes.

The difference here is that the investor has "added value" at a risk to themselves, the speculator hasn't.

Similarly, someone who buys land and puts capital into a goldmine during a gold rush is an investor. Someone who buys and sells plots of land during a gold rush is a speculator.

Again, the difference is that the investor has tried to create value, intending to profit from it, whereas the speculator adds no value - he simply uses capital to benefit from rising prices.

That's really the nub of it - and it's what Permabear's defence of speculators rests on, although in fact he's covering pure speculators with a defence appropriate to speculative (high-risk) investors. If you put money into the 19-year old who might be the next Bill Gates, you're speculatively investing, not speculating. If on the other hand you buy up the lad's patent intending to sell it when it's more valuable - through no effort of your own - then you're a speculator.

cordially,
Scofflaw

Scofflaw

Valmont wrote: »

The productive members of society are taxed by some in the name of those who condemn the entrepreneurial urge as "greedy" whilst simultaneously trying to get a cut of the profits for their own ends. So—relatively speaking—these productive individuals are quite noble, heroic, and admirable; but only when compared to the parasites who castigate them and then have the cheek to reach into their pocket afterwards.

Quite like the rapist calling his victim a slut, really.

Now that's nausea-inducing.

Both can be nausea-inducing, and for the same reasons - because they can cloak greed under a mask of worthier purposes, which cheapens the worthier purposes. But not all of those who want to tax the entrepreneurial are doing it for baser reasons, any more than many entrepreneurs are.

I'd be an entrepreneur even if it didn't pay better than whatever full-time job I could get - indeed, am an entrepreneur even though it doesn't. And I don't object to being taxed on what I make for the benefit of others, either. If I received a citizen's wage identical to that received by everyone else, I would still prefer to spend my time self-directed.

cordially,
Scofflaw

Blowfish

Scofflaw wrote: »

On the other hand, someone who buys up grain, intending to sell it for high prices during a time of scarcity, is a speculator.

The difference here is that the investor has "added value" at a risk to themselves, the speculator hasn't.

The thing is though, that's only looking at it from the perspective of the grain company.

If you look at it from the grain consumers perspective (i.e. the ordinary citizens), the speculator buying up surplus in a 'boom crop' and selling it during scarcity results in prices actually falling during scarcity. In other words, the supposed 'negative' speculators have actually provided a benefit to the ordinary people.

This is precisely why assuming that speculation is automatically bad is ludicrous.

Liam Byrne

Scofflaw wrote: »

That's really the nub of it - and it's what Permabear's defence of speculators rests on, although in fact he's covering pure speculators with a defence appropriate to speculative (high-risk) investors.

Interesting that you've picked that up, Scofflaw, because I've repeatedly and clearly stated that anyone who adds value is entitled to a profit, reserving my venom for those who simply hoard to force prices and exchange rates and the like upwards due to scarcity.

And yet Permabear still objects to my views.

Maybe that's what you mean by the second part of your sentence ?

Scofflaw

Blowfish wrote: »

The thing is though, that's only looking at it from the perspective of the grain company.

If you look at it from the grain consumers perspective (i.e. the ordinary citizens), the speculator buying up surplus in a 'boom crop' and selling it during scarcity results in prices actually falling during scarcity. In other words, the supposed 'negative' speculators have actually provided a benefit to the ordinary people.

This is precisely why assuming that speculation is automatically bad is ludicrous.

Well, no, not really in this case, because you're making the mistake of presuming modern large market conditions and applying the reasoning to small medieval markets. A speculator wouldn't be driving prices down in this case, because the amounts involved would be small, the sale quick, the people desperate, and the information poor.

However, your point in principle is fine, because at least the speculator is providing some grain, but I didn't say that speculation was automatically bad, or even that speculators are. I'm just trying to describe where the line is, not establish that it's right. People in general feel it's right.

Speculators, if people denounce them, will usually claim in some way to be providing a service - that is, adding value - and if they can successfully persuade people that's what they're doing, then they won't be considered 'speculators'.

There are obviously borderline cases, and indeed there are relatively few clear-cut ones, but in general buying up things and selling them on at higher prices simply by taking them out of circulation until prices rise through no effort of the speculator is generally considered a bad thing. That the price increases through no effort of the speculator is important - if you make the effort to take the goods somewhere they're valued more highly you're not 'speculating' in the pejorative sense.

cordially,
Scofflaw

Scofflaw

Liam Byrne wrote: »

Interesting that you've picked that up, Scofflaw, because I've repeatedly and clearly stated that anyone who adds value is entitled to a profit, reserving my venom for those who simply hoard to force prices and exchange rates and the like upwards due to scarcity.

And yet Permabear still objects to my views.

Maybe that's what you mean by the second part of your sentence ?

Pretty much - Permabear's defence is one of someone who undertakes speculative investment - that is, high-risk investment where the chances of profit seem relatively slight. It's still investment, though, if you're providing the capital wherewithal to allow his 19-year old to get started on the next DOS. You may not be adding value directly, but that value (DOS!!) would not have been added to the economy without you choosing to take that risk.

cordially,
Scofflaw

Liam Byrne

Scofflaw wrote: »

Pretty much - Permabear's defence is one of someone who undertakes speculative investment - that is, high-risk investment where the chances of profit seem relatively slight. It's still investment, though, if you're providing the capital wherewithal to allow his 19-year old to get started on the next DOS. You may not be adding value directly, but that value (DOS!!) would not have been added to the economy without you choosing to take that risk.

cordially,
Scofflaw

Again, no major issues with that.

It's the "buying up the commodities that people need" (houses, oil, currency, etc) in order to make a CONTRIVED demand and profit that wrecks my head.

Not to mention the vultures who have no issues destroying a currency through predatory actions, giving no thought whatsoever to those whose lives depend on it.

beeftotheheels

Blowfish wrote: »

The thing is though, that's only looking at it from the perspective of the grain company.

If you look at it from the grain consumers perspective (i.e. the ordinary citizens), the speculator buying up surplus in a 'boom crop' and selling it during scarcity results in prices actually falling during scarcity. In other words, the supposed 'negative' speculators have actually provided a benefit to the ordinary people.

This is precisely why assuming that speculation is automatically bad is ludicrous.

But that's why all morality ought to be left out of it. Morality. Right and wrong. This has nothing to do with the issue. Investors, of all sorts, seek to profit for their investors, indeed are obliged by law to seek such returns on their investments.

Their actions may be beneficial or detrimental to society as a whole when viewed in the longer term, but they too are complying with laws and rules which require them to maximise the returns for their investors who are likely to include pension funds, and health insurance providers and the banks we expect to keep our current accounts safe. They are obliged, by law, to generate returns in the shorter term.

So, leaving moral judgement aside and dealing with logic alone we should seek to regulate them to mitigate the negative longer term consequences for society (acknowledging that most institutional investors' mandate requires short term, rather than longer term consequences be taken into account, and also acknowledging that absent global agreement we cannot regulate the mandate under which they work)

Not knee jerk regulation like banning shorting of banking stocks during a banking crisis which can make matters worse. But general, well thought out, principles based regulation capable of achieving the desired consequences.

But I must agree with both Scofflaw and View. For either side, governmental or speculator, to claim a moral high ground, to fail to acknowledge that a compromise must be reached, to fail to acknowledge that the other side's arguments are not without merit, is risible.

Chuck Stone

Liam Byrne wrote: »

It's the "buying up the commodities that people need" (houses, oil, currency, etc) in order to make a CONTRIVED demand and profit that wrecks my head.

If they're buying them up because there's a need i.e. scarcity they are moving scarce goods from a place of less demand to a place of more demand (and creating incentive for people to expand the supply of a scarce good) so that is not necessarily a bad thing - perhaps not at all in that it serves a discernible function.

Your problem is with manipulation of the market.

SupaNova

Scofflaw wrote: »

There are obviously borderline cases, and indeed there are relatively few clear-cut ones, but in general buying up things and selling them on at higher prices simply by taking them out of circulation until prices rise through no effort of the speculator is generally considered a bad thing. That the price increases through no effort of the speculator is important - if you make the effort to take the goods somewhere they're valued more highly you're not 'speculating' in the pejorative sense.

cordially,
Scofflaw

So in your view someone who buys grain in a city where there is abundance and sells in a city where there is scarcity is an investor and is providing a service. And in the context of a single city, someone who buys up grain in a time of abundance and sells in a time of scarcity is a speculator and provides no service?

The investor takes grain out of circulation in one city and releases it in another. The speculator takes grain out of circulation in one city and releases it in the same city. Both are taking grain from where it is abundant to where it is scarce, so both provide the same service, but the speculator is doing so across time. So calling the investor good and speculator bad here for providing the same service is wrong.

carveone

Chuck Stone wrote: »

If they're buying them up because there's a need i.e. scarcity they are moving scarce goods from a place of less demand to a place of more demand (and creating incentive for people to expand the supply of a scarce good) so that is not necessarily a bad thing - perhaps not at all in that it serves a discernible function.

Your problem is with manipulation of the market.

Indeed. The Nymex is a pretty good example of that. People expect oil to be high because, well, oil is high. But I think the price of oil should be about $70 (the CEO of Exxon himself said that) and it's $100.

If you look you can see things like 300 mbbls for Jan delivery to Cushing (which can handle 40 mbbls/month). They then cancel or roll the contracts over and then deliver 20mbbls of oil. This fakes high demand and low supply. The big guys actually have tankers overshore to take oil and fake scarcity. They then go on TV and shout about $200 oil to fan the flames. This is common behaviour in commodities and it has really has to be stopped.

Some guy on a blog somewhere (forget where) suggested the US President should screw these guys over. He happens to have 700 Million barrels of oil in the Strategic Petroleum Reserve. These guys want 300 milllion barrels of oil for January? No problem. And no you can't cancel the contracts. Bye bye Goldman Sachs!

The point of all that waffle is that the government sets the stage, sets the limits and the rules. When the government opts out with "light touch regulation" you get anything goes type behaviour which takes out the world. Has happened before...

beeftotheheels wrote:

Not knee jerk regulation like banning shorting of banking stocks during a banking crisis which can make matters worse. But general, well thought out, principles based regulation capable of achieving the desired consequences

Couldn't agree more. People forget that banning shorting has undesirable consequences - ie: the inability to take a leveraged short side in order to reduce risk. If you cannot reduce your exposure, especially in a completely bananas market like the current one, then you might opt out of taking the long side too. Which seems to be the case...

Liam Byrne

Chuck Stone wrote: »

Your problem is with manipulation of the market.

Absolutely 100% correct.

Scofflaw

SupaNova wrote: »

So in your view someone who buys grain in a city where there is abundance and sells in a city where there is scarcity is an investor and is providing a service. And in the context of a single city, someone who buys up grain in a time of abundance and sells in a time of scarcity is a speculator and provides no service?

The investor takes grain out of circulation in one city and releases it in another. The speculator takes grain out of circulation in one city and releases it in the same city. Both are taking grain from where it is abundant to where it is scarce, so both provide the same service, but the speculator is doing so across time. So calling the investor good and speculator bad here for providing the same service is wrong.

The distinction, as far as I can see, is based on the effort put in by the speculator/investor. Real effort is required to identify somewhere where grain is cheap and bring it to where it is scarce. Buying during a glut and waiting for a scarcity requires no real effort, and in an era of regular scarcities, involves little risk.

So in the one case people accept the merchant's profit as a reward for their effort - in the other case, not. It's not about whether they're performing a service.

And human beings make this kind of distinction all the time. Say we have a situation where a guy is being held hostage. Somehow he manages to escape. There's a van, which contains, as it happens, a couple of children who have just been taken hostage - and some other vans.

Now, if our guy deliberately takes the van containing the children because it contains the children and successfully escapes with it, he's a hero. If he grabs the van because it's the easiest van to take, without realising it has children in it, he's not. The more effort/risk involved in deliberately picking the van with the children over other vans, the greater the heroism. In both cases, the children are rescued - so as far as you're concerned the cases are equivalent. Most people would disagree.

cordially,
Scofflaw

SupaNova

Scofflaw wrote: »

The distinction, as far as I can see, is based on the effort put in by the speculator/investor. Real effort is required to identify somewhere where grain is cheap and bring it to where it is scarce. Buying during a glut and waiting for a scarcity requires no real effort, and in an era of regular scarcities, involves little risk.

Sorry but the effort required is not much different in this case. The speculator/investor has to identify whether there actually is a glut now, and if there actually will be scarcity in the future, and the investor/speculator runs the risk of being wrong. This form of speculating/investing is far from the low risk, no effort form, you are proclaiming.

Scofflaw

SupaNova wrote: »

Sorry but the effort required is not much different in this case. The speculator/investor has to identify whether there actually is a glut now, and if there actually will be scarcity in the future, and the investor/speculator runs the risk of being wrong. This form of speculating/investing is far from the low risk, no effort form, you are proclaiming.

Again, you're applying modern rationales. I deliberately picked the medieval city example because it helps illustrate the point. The merchant lives in the city, he knows when there's a glut in the city, he knows that there will be scarcity because it was an era of regular scarcity. The likelihood of a relative scarcity during the storage period of the grain would be very high - the main risk is of expropriation.

You also seem to be assuming I'm trying to ascribe some kind of specific blame to this specific set of circumstances, which is completely wrong - as if I have some major issue with hypothetical medieval grain merchants. I'm trying to describe what makes the essential difference between being perceived as a speculator or being perceived as an investor, so there's no real point in you trying to defend the putative merchant in the example.

On the other hand, I'm glad you've taken it up wrong, because your defence, if you look at it, revolves around exactly the distinction I'm trying to highlight. You're defending the behaviour of our notional grain speculator by saying that there is a real effort, and a real risk, and on that basis he's not a "speculator" in the pejorative sense.

So, while you appear to be taking me up entirely wrong, you're helping me make my point.

cordially,
Scofflaw

Killer Pigeon

[MOD]Video only post deleted. Also, this isn't AH.[/MOD]

SupaNova

Scofflaw wrote: »

On the other hand, I'm glad you've taken it up wrong, because your defence, if you look at it, revolves around exactly the distinction I'm trying to highlight. You're defending the behaviour of our notional grain speculator by saying that there is a real effort, and a real risk, and on that basis he's not a "speculator" in the pejorative sense.

So, while you appear to be taking me up entirely wrong, you're helping me make my point.

cordially,
Scofflaw

While i did defend the notional grain speculator based on effort and risk, if the speculator had the wonderful ability to forecast the future with great accuracy and performed the exact same task with little to no effort or risk, he should not be considered a "speculator" in the pejorative sense. The results of the grain speculation are beneficial regardless of peoples estimates of the efforts and risks undertaken by the speculator. Although i do see your distinction as reasonably accurate as to how a lot of people currently view it.

Scofflaw

SupaNova wrote: »

While i did defend the notional grain speculator based on effort and risk, if the speculator had the wonderful ability to forecast the future with great accuracy and performed the exact same task with little to no effort or risk, he should not be considered a "speculator" in the pejorative sense. The results of the grain speculation are beneficial regardless of peoples estimates of the efforts and risks undertaken by the speculator. Although i do see your distinction as reasonably accurate as to how a lot of people currently view it.

Have always viewed it, I think. And I think people do factor in risk - if there had never been a scarcity, and someone laid in a stock of grain, people would view their "fair profit" as being higher than if the scarcity were entirely predictable.

I also feel that, as per the above, people do acknowledge that a service is provided. Essentially, there seems to me to be a "fair profit" which people are OK with - the determination of what is fair depends on a number of factors such as effort, risk, ingenuity. Take more than that fair profit and people consider it "speculation" (negatively) - take a fair profit and they don't.

Obviously, people will also vary in their estimation of a fair profit - there are people who will consider almost anything fair, there are people who will consider almost anything unfair. Most people will fall somewhere in the middle. In turn, if the authorities expropriate the grain (or whatever) at a reduced price people will see that as more or less fair depending on the reduction, the need, the effort and risk borne by the expropriated merchant. Even if people are starving, the total expropriation of a merchant who risked his life to bring grain at great effort to the city is going to be seen as an unfair act - whereas breaking open the stores of someone who did no more than buy up local surplus last year won't be to anywhere near the same extent.

cordially,
Scofflaw

SupaNova

Scofflaw wrote: »

Have always viewed it, I think. And I think people do factor in risk - if there had never been a scarcity, and someone laid in a stock of grain, people would view their "fair profit" as being higher than if the scarcity were entirely predictable.

I also feel that, as per the above, people do acknowledge that a service is provided. Essentially, there seems to me to be a "fair profit" which people are OK with - the determination of what is fair depends on a number of factors such as effort, risk, ingenuity. Take more than that fair profit and people consider it "speculation" (negatively) - take a fair profit and they don't.

The negative view based on the amount of profit made by the speculator is because of a poor understanding of profit and what the speculator does. The speculator that makes the greatest profit possible is one who buys at a time of highest abundance and sells at a time of the highest scarcity. So having grievances with the amount of profit made is having a grievance with a speculator performing his task as best possible.

Scofflaw

SupaNova wrote: »

The negative view based on the amount of profit made by the speculator is because of a poor understanding of profit and what the speculator does. The speculator that makes the greatest profit possible is one who buys at a time of highest abundance and sells at a time of the highest scarcity. So having grievances with the amount of profit made is having a grievance with a speculator performing his task as best possible.

That's as maybe, but it doesn't change people's views, I think. And again, I'm making observations here, not laying down what should be.

cordially,
Scofflaw

Liam Byrne

SupaNova wrote: »

Scofflaw wrote: »

Have always viewed it, I think. And I think people do factor in risk - if there had never been a scarcity, and someone laid in a stock of grain, people would view their "fair profit" as being higher than if the scarcity were entirely predictable.

I also feel that, as per the above, people do acknowledge that a service is provided. Essentially, there seems to me to be a "fair profit" which people are OK with - the determination of what is fair depends on a number of factors such as effort, risk, ingenuity. Take more than that fair profit and people consider it "speculation" (negatively) - take a fair profit and they don't.

The negative view based on the amount of profit made by the speculator is because of a poor understanding of profit and what the speculator does. The speculator that makes the greatest profit possible is one who buys at a time of highest abundance and sells at a time of the highest scarcity. So having grievances with the amount of profit made is having a grievance with a speculator performing his task as best possible.

You could possibly argue that point if the resulting profit didn't involve screwing the people who have to pay for it.

If you were a taxi driver making a decent wages of 200 a day, and then you are called out to someone who is desperately stuck, do you double your rate ?

Now imagine that they're badly stuck because you manipulated the availability by some means - say buying up every taxi licence.

Do you think that's appropriate business, or despicable ?

I'd charge the standard rate that I had already determined was a fair price / wage.

But that's why I'm not involved in this ethically-challenged area or business.

blahfckingblah

6 days since this article, whats the verdict lads and lassies buy a tonne of tinned beans or not?

SupaNova

Liam Byrne wrote: »

You could possibly argue that point if the resulting profit didn't involve screwing the people who have to pay for

In our example, on the surface the grain speculator might be viewed as screwing people as he will be selling grain at a high price, but this is again forgetting that without the speculation, grain would have been more scarce, and the price even higher.

If you were a taxi driver making a decent wages of 200 a day, and then you are called out to someone who is desperately stuck, do you double your rate ?

No i wouldn't double my price if i was a taxi driver in that situation, but if i as a taxi driver could only offer my services to 20 customers on average per day, and 50 people wanted my service i would raise the price. Lots of people vying for an inadequate supply of taxis, would mean my profits would soar, large increases in profits usually don't go unnoticed for long and this attracts more people into that line of work. Prices will fall again and more customers can gain the services of a taxi again. Without my increase in price, i could have only serve 20 customers, 30 would be left without a taxi. With the increase in price and profits i made, that incentivised more people to become taxi drivers, it became possible for all 50 customers to have access to a taxi again.

Now imagine that they're badly stuck because you manipulated the availability by some means - say buying up every taxi licence.

Taxi Licenses are not very free market and have the effect of restricting supply, to different degrees depending on stringency of gaining a license. I don't want to open that can of worms though.

Blowfish

Liam Byrne wrote: »

Now imagine that they're badly stuck because you manipulated the availability by some means - say buying up every taxi licence.

In that case, the cause of the issue is the regulation that limits the amount of licenses issued as this allows people to manipulate the market by buying up the licenses. If licenses were deregulated, the market couldn't be manipulated in that fashion.

North_West_Art

blahfckingblah wrote: »

6 days since this article, whats the verdict lads and lassies buy a tonne of tinned beans or not?

would like to know the answer to this too, but the experts here are too busy arguing over their analogies.. we may as well be in the European Parliament itself