The NYT is such garbage these days. Some speculators lost money to other speculators. That's how speculation works. Nobody is being 'preyed' upon. This article is unbelievably disingenuous.
Isn't that how all investment assets are sold?
> the seller not disclosing & misrepresenting the fact that they intended to glut the market and thereby drive down the price
I mean, the seller wasn't trying to crash the price. They just had a bunch of medallions to offload. It doesn't seem like it's incumbent upon a seller to inform the market that it has other medallions to sell. Certainly no other financial markets work this way.
> It's technically not securities fraud, but it has a similar flavor, so I wouldn't characterize this as a market working as intended.
It really doesn't, though. This is how all markets work. Nobody informs buyers of AAPL stock that they are trying to sell a billion dollars worth. They sell little chunks at a time to minimize their impact. That's just good order execution.
The movie Margin Call makes an excellent depiction of what is just good order execution. Skilled sellers know if they're selling at the top. Should the buyers in the movie not have been upset at the sellers because that's how markets work? Yes and no. The buy/sell relationships in the movie worked because there had been years of trust built up, which the Kevin Spacey character was worried about destroying. He warned that they'd never be able to buy/sell in the market again if they offloaded their position in the manner they did, that nobody would trust them anymore. When there's a salesperson involved, people who buy investments typically trust the salesperson, or else they wouldn't buy.
You can argue that buyer beware should be the default defense. And this is not wrong, but if the salesperson is good enough, they break down that defense anyway. More importantly, taking the trust out of the transaction also takes the humanity out of the transaction. I don't think we should blame buyers if they were sold something on deeply human emotions (trust, camaraderie) and then have opposite deeply human emotions (betrayal, anger) if they find they were played. The sellers knew what they were doing from the beginning, according to the article. Hence, the buyers felt played. That's not something where I'd blame the buyer for being unsophisticated. I blame the seller because when one side has significantly asymmetrical information, that is preying.
https://marginalrevolution.com
And in general, finance journalism is good too (e.g. bloomberg/wsj/economist). It has its own biases, of course, but they're often more transparent. The bias of finance journalism is in favor of money. Anything that threatens people's money, they're against. But that bias is fairly easy to understand and correct for.