Chamath Palihapitiya Is Absolutely Correct

[g5000]

An investment fund billionaire was on CNBC a month ago, and he went on a rant about how we should let companies fail during the pandemic. This interview went viral in financial circles.

The CNBC interviewer was shocked to hear this billionaire say these things, but Chamath Palihapitiya is absolutely correct.

Here is a link to the most important part of the interview: Chamath Palihapitiya: US shouldn't bail out hedge funds, billionaires during coronavirus pandemic

Here is a link to the entire interview:




I will flesh out my thoughts in the next post.

Here is a wiki link about this guy: Chamath Palihapitiya - Wikipedia

This is a classic rags to riches, pull yourself up by your own bootstraps, story. This guy is no slouch.

 

[Dont Taz Me Bro]

An investment fund billionaire was on CNBC a month ago, and he went on a rant about how we should let companies fail during the pandemic. This interview went viral in financial circles.

The CNBC interviewer was shocked to hear this billionaire say these things, but Chamath Palihapitiya is absolutely correct.

Here is a link to the most important part of the interview: Chamath Palihapitiya: US shouldn't bail out hedge funds, billionaires during coronavirus pandemic

Here is a link to the entire interview:




I will flesh out my thoughts in the next post.

Here is a wiki link about this guy: Chamath Palihapitiya - Wikipedia

This is a classic rags to riches, pull yourself up by your own bootstraps, story. This guy is no slouch.

Yep, I saw this interview back when it took place. Absolutely agree with him. These bailouts are a massive transfer of wealth to the rich from the middle class

 

[g5000]

Our government and the Federal Reserve keep bailing out failed businesses. Because the government and the Fed don't allow nature to take its course, each succeeding bailout has to be bigger than the last.

The Great Recession was not the first bailout. Not even LTCM was the first bailout. But those were the first to be big enough to grab the public's attention.

And now we have the biggest bailout of all time.

The next one will be so bad that not even the government and the Fed will be able to stop the economy from crashing. In fact, because they have not allowed nature to take its course, they have ensured the crash will be far, far bigger than it would have been if they had let nature take its course.

You can defy gravity for only so long. And the longer you try, the harder you will fall when that inevitable day comes.


The argument our hero is making is that because corporations and investors have become dependent on government and Fed bailouts if the going gets rough, they have stopped taking prudent measures to prepare for a rainy day. Instead of setting money aside for downturns, they have used their cash instead for things like stock buybacks to artificially drive up their stock price. Now that we are in a down cycle, their cupboards are bare and they come begging to the American taxpayer to bail them out.

Fuck. That. Shit. That's Palihapitiya's argument. We need to let them fail so they never act so stupidly again.

A central tenet of capitalism is that when you invest in a company, you are taking a risk. If that company wins big, you win big. But the other half of the equation is that if the company flops, YOU LOSE.

That's how capitalism works.

Our government and the Fed have broken capitalism. They are not allowing investors to fail.

What happens when you are never allowed to fail? You start taking insane risks, that's what.

If your daddy is rich and he keeps rescuing you from your mistakes, you keep making bigger and bigger mistakes.

We need to allow investors to lose. We need to restore capitalism.

 

[g5000]

An investment fund billionaire was on CNBC a month ago, and he went on a rant about how we should let companies fail during the pandemic. This interview went viral in financial circles.

The CNBC interviewer was shocked to hear this billionaire say these things, but Chamath Palihapitiya is absolutely correct.

Here is a link to the most important part of the interview: Chamath Palihapitiya: US shouldn't bail out hedge funds, billionaires during coronavirus pandemic

Here is a link to the entire interview:




I will flesh out my thoughts in the next post.

Here is a wiki link about this guy: Chamath Palihapitiya - Wikipedia

This is a classic rags to riches, pull yourself up by your own bootstraps, story. This guy is no slouch.

Yep, I saw this interview back when it took place. Absolutely agree with him. These bailouts are a massive transfer of wealth to the rich from the middle class

Exactly.

The American people can see what is going on. They lose their jobs, their kids are going hungry, and yet the rich are not suffering the consequences of the risks they took which caused the man in the street to lose his job.

That's why demagogue assholes like Bernie Sanders and AOC and Trump are so popular.

 

[g5000]

It's a snake swallowing its own tail.

An investment/hedge fund makes a bad investment. The Fed steps in to bail out that fund by lowering interest rates so the hedge fund can borrow money at cheap rates so the fund can then turn around and invest in the market again to recover its losses.

But because the Fed has lowered interest rates, the funds have to lever up yet again and they have to invest in bigger risks to get any returns of any value.

Bigger risks means bigger losses when there is a downturn.

And round and round we go.

 

[JustAGuy1]

Had we let it happen the first time round we wouldn't be in this mess.

 

[Blaine Sweeter]

Our government and the Federal Reserve keep bailing out failed businesses. Because the government and the Fed don't allow nature to take its course, each succeeding bailout has to be bigger than the last.

The Great Recession was not the first bailout. Not even LTCM was the first bailout. But those were the first to be big enough to grab the public's attention.

And now we have the biggest bailout of all time.

The next one will be so bad that not even the government and the Fed will be able to stop the economy from crashing. In fact, because they have not allowed nature to take its course, they have ensured the crash will be far, far bigger than it would have been if they had let nature take its course.

You can defy gravity for only so long. And the longer you try, the harder you will fall when that inevitable day comes.


The argument our hero is making is that because corporations and investors have become dependent on government and Fed bailouts if the going gets rough, they have stopped taking prudent measures to prepare for a rainy day. Instead of setting money aside for downturns, they have used their cash instead for things like stock buybacks to artificially drive up their stock price. Now that we are in a down cycle, their cupboards are bare and they come begging to the American taxpayer to bail them out.

Fuck. That. Shit. That's Palihapitiya's argument. We need to let them fail so they never act so stupidly again.

A central tenet of capitalism is that when you invest in a company, you are taking a risk. If that company wins big, you win big. But the other half of the equation is that if the company flops, YOU LOSE.

That's how capitalism works.

Our government and the Fed have broken capitalism. They are not allowing investors to fail.

What happens when you are never allowed to fail? You start taking insane risks, that's what.

If your daddy is rich and he keeps rescuing you from your mistakes, you keep making bigger and bigger mistakes.

We need to allow investors to lose. We need to restore capitalism.

"If your daddy is rich and he keeps rescuing you from your mistakes, you keep making bigger and bigger mistakes.""

Have anybody in mind when you wrote this line? ;0

 

[Seawytch]

Had we let it happen the first time round we wouldn't be in this mess.

No, we would still be in this mess, but it would be a smaller, easier to clean up mess.

 

[Blaine Sweeter]

Yep, when I saw the LA Lakers and Marriott and hedge fund managers scoop up the PPP money, it set my hair on fire.

 

[C_Clayton_Jones]

“…allow nature to take its course…”

Needless to say, that’s not going to happen.

 

[Bootney Lee Farnsworth]

Chamath Palihapitiya

Who...the fuck???


He's right. I just don't know who he is.

.

 

[g5000]

Chamath Palihapitiya

Who...the fuck???


He's right. I just don't know who he is.

.

That's why I provided a wiki link to his biography. He's a classic rags to riches story.

 

[g5000]

The Federal Reserve has created a pretend economy and a pretend stock market.

Fed Buys $305 Million of ETFs at Launch of Historic Program

The Federal Reserve bought $305 million of exchange-traded funds on the first day of its historic intervention into U.S. corporate debt markets, according to data published Thursday.

www.bloomberg.com

The Federal Reserve bought $305 million of exchange-traded funds on the first day of its historic intervention into U.S. corporate debt markets, according to data published Thursday.

The figures were revealed in the central bank’s weekly balance sheet update, which also showed that total assets rose to a new record of $6.93 trillion in the week through May 13.