Has anyone thought that Trump is trying to run the economy like a crypto “pump and dump” scheme?
Genuinely curious.
He’s a buisinessman with a vendetta against multiple government agencies for trying to convict him. These are pure vengeance plays to humiliate the feds, destroy the peoples confidence in the country, dismantle what little power government had over corporations while making as much bank as possible.
America was already a corporatocracy in all but name but companies were willing to work with government to maintain the illusion that the old powers of federal government were still in control. Now trump is signalling that the mask need not be worn.
So much winning!
Can we please stop “winning” now?
When people sell their stocks, that value doesn’t vanish - it turns into cash.
So another way to look at is “rich people now have $1 trillion more in cash now than they did yesterday”.
And that cash will turn back in shares at the next opportunity…
It’s like a spring that gets pushed down and then released again later. All the energy used to push it down doesn’t go away, it is stored in the spring.
I don’t think it’s entirely true:
Let’s suppose there are 500shares trading at $10. The market capitalization is 5000$.
One person now trades one share for 9$. There are still 500 shares around (if the company didn’t do a buyback) and now the market capitalization is 4500$. Where did the $500 go? Nowhere. The market cap just represents the perceived value of the company
This is the correct take.
There are not $1.5T worth of cash sitting around. What happened was a bunch of people tried selling their stock for $10, and when nobody would buy it for that, they sold it for $9. And when nobody would buy for that, they sold for $8. The market cap just dropped by 20%, but only $17 was made, not the $1000 the market cap “lost”.
