Comment by crpatino | Hacker News Reader

Comment by crpatino | Hacker News Reader

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No, money is only numbers.

If you cut down a tree, cut it in boards, cut the boards and nail the pieces into a bunch of chairs, that is value added. It did create wealth.

Same, if you write a bunch of code that did not exist before, and the code is compiled and linked into a program that allows users to do stuff they could not do before (or could, but much more slowly) then there is value added. Wealth was created, even if there is no physical representation of that wealth... but it has real effects on the real world.

But when people just place bets, and double-down bets, and triple-dare-you bets on whether or not some random guy is going to write a program that might or might not go viral and get a billion or eyeballs... that's not wealth creation. That is just toying with numbers. You just produce noise in the economy so that the real prices of real stuff cannot be discovered anymore.

Prediction markets are valuable.

Sure, but the stock market is not valuable as a prediction market.

That might be a sign that it's over-regulated.

Valuable for whom, or for what?

If those did what they claim to do, sure: They would help to allocate resources to invest in projects that created the most goods and services to raise everyone's standard of living. There is certainly value in that, since we all would get more and better capital goods for the same amount of investment.

Sadly, this is no longer the case. I don't really know about finances, but I have seen first hand great engineering companies that got bought by assholes that did not have any money themselves, but used their dark wizardry financial tricks to leverage themselves to the ears.

Then, they proceed to cut costs like there is no tomorrow, again, making the numbers in the accounting books look much better than the real health of the company, all this at the cost of gutting the mid-to-long term feasibility of the business. Finally, they go and use their lies and numbers to find a bigger sucker, and sell the company by a price even bigger than what they paid in the first place.

And you know what, the whole financial industry exist to enable those fuckers to go around dishing chaos and destruction, because earning an honest profit by servicing happy customers is almost never as profitable as dilapidating in months stores of wealth that took decades to build up in the first place. It does not matter if they sell below the real value, since they did not personally invest any time or effort in accumulating the wealth, getting pennies on the dollar suits just fine.

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