Comments by "hedgehog3180" (@hedgehog3180) on "Investment Analyst Explains: The Big Short" video.

The reason why VPN ads talk about security is because they can't legally say that it's actually for piracy.
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Well in my very basic understanding of things shorts do kinda correct bubbles. Short sellers make money if the value of a security falls faster than the market expects it to, not just if the value falls in general since when you lend a security to a short seller you charge them a fee based on how quickly you expect the value to fall. This means that short sellers can only really make money if the market is overvalueing something and that means that simply by going short on a position you're communicating to everyone that you believe that this security is overvalued and you are willing to bet money on it. That simple act can cause the valuation to correct downwards and perhaps pop a bubble before it becomes catastrophic. Now that didn't happen in this case and y'know the short sellers did make money off of everyone's misery but tbf they didn't cause it. It was caused by the financial system and they just spotted it and used the opportunity, that makes them more morally grey than anything. But shorting definitely isn't evil since it's essentially the only self correcting mechanism that exists in capitalist markets, but it's clearly not a very functional one.
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@Hatchet-Jack How can you blame them when their bank advisors told them that they could afford it. This is like blaming the victim of medical malpractice for trusting the doctor.
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Imo VPNs are pretty harmless for youtubers to advertise. They overpromise sure but they aren't scams so that's just normal marketing.
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In capitalism everyone benefits from a bubble until the bubble pops so no one is ever going to stop it before it becomes catastrophic.
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@andrewmichieli1760 Well he can't really focus when he's being blurry.
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@TheBashar327 It's a bit insane to act like people lying on their mortage applications could actually be responsible for a crash. Banks have an extremely easy time investigating this kinda thing so even if some people did commit fraud it probably only succeeded because the banks were motivated to not investigate. Like it's simply not that hard to find out what someone earns, you literally just have to call their employer, and there's also credit ratings and bank balances that the banks can easily check. Blaming this on regular people commiting fraud is like leaving your car unlocked parked infront of some mall at night and then getting mad when your insurance won't pay you when it inevitably gets stolen.
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@freddy.st16 That's not really how this works, any company that's large enough will be “too big to fail” not just the banks. For example it's well known that US military contracts are in large part awarded to keep the various defense contractors alive and the quality of the offering isn't that important, especially since there's rarely a huge difference anymore. This is just the inevitable result of capitalism, the state is reliant on a mostly stable economy so that tax revenue stays stable and social issues don't get out of control and that means that the state can be forced to keep a large company alive to avoid chaos. The only real difference is that in the past when a large company failed it would get brought out by the state and become nationalized instead of being bailed out and allowed to keep running as a private company.
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@meneldal I don't really think that private credit ratings agencies can ever really work. It's simply impossible to correctly align their incentives when the ones they're rating are their customers. Regulations can only serve to curb this problem not fix it since it simply will always hurt the business of a private credit ratings agency to be honest and fair.
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I'd assume that the information is there but it just takes a lot of time and perhaps expertise to dig through so you won't do it unless you suspect something is wrong and you won't suspect that anything is wrong when all the rating agencies whose job it is to do exactly thar are saying that everything is fine. It perhaps sounds naive and weird but tbf we do this with the majority of things in our lives, we assume that our computers, cars, food, utilities, and the wiring in our house are all safe and secure because someone whose job it is to check that says they are. The difference with the stockmarket is that most of the things we interact with as consumers are either kept safe by a government agency or there simply is no perverse incentive, food ministries keep food and drugs safe and are kept seperate from the producer so they can be honest, and Apple and Microsoft have no real incentive to make unsafe software. So while it makes sense to trust that your food doesn't contain poison because it is FDA approved, the same logic doesn't really hold for ratings agencies especially when dealing with the products of large companies.
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@RideAcrossTheRiver What in the actual fuck are you talking about.
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At least with fish stew the end product is still tasty and deliscious.
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Yeah afaik shorts are basically the only correction mechanism against bubbles so they aren't an evil thing necessarily.
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So basically capitalism is built so that every second decade or so it will just self-sabotage and crash, causing untold suffering to millions of people who had no responsibility whatsoever.
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Capitalism is simply built in a way where it will always lead to bubbles since everyone benefits in a bubble until it collapses, thus no one will want to pop the bubble before it becomes large enough to cause a crash and at that point everyone who was in on the bubble will desperately try to offload their own losses onto everyone else and eventually it trickles down to the working class who due to their lack of pressence within financial makets will always have an information disadvantage and no ability to offload their own risk. And by that I don't mean that workers should just buy stock, because that does not get you in the door of financial companies and workers can never get in the door since the world cannot work like that. The majority of people have to be engaged in actual productive labor, they cannot all be part of the class that manages the output of said labor.
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I don't think Bloomberg terminals give you access to new data, they just give you access to all the data Bloomberg collects and analyzes. You aren't paying for insider information. That's why other companies offer similar services to Bloomberg and there are even some free sites.
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This made me realize how stupid “The Big Short” would sound to anyone who doesn't know what short selling is.
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I'd recommend watching “This Is Financial Advice” by Dan Olson, it does a really good job of explaining the most basic aspects of the stock market in a way that's understandable to someone who knows nothing. It's at least how I first learned some basics.
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@robertmittoniii5427 That seems like an obvious methodological weakness. Millionaires are not necessarily millionaires because they're good investors, firstly becoming a millionaire by investing is basically not possible at least according to Richard, secondly most people who became millionaires did so by making money in some other sector, and thirdly the majority of rich people became rich through inheritance. Therefore there's no reason to believe that millionaires are somehow more insightful when it comes to investing. It would have made way more sense to survey people who actually work as investors. Though what would have actually produced results is conducting a meta review of the literature, y'know the thing you usually do when doing science.
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I agree that it is objectional to make money on people losing their homes but tbf the people shorting the housing market didn't actually cause it to happen. The cause was the banks, financial institutions and ratings agencies who all created the bubble. The people shorting it merely saw that it was a bubble and by shorting made it publically known that they believed it was a bubble, which is basically the only way for the market to self correct in this situation. If this still sounds immoral to you then your problem is with capitalism not short sellers.
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