Is making easy money out of thin air on the forex market immoral? - page 8

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Igor Makanu:

I think I wrote about the first slogan.

Your example is probably '90s marketing, I think there was that or anecdotes from those years.

Used to be.

Few people know that Adidas trainers were "gifted" to the Soviet Union by the legendary Olympics-80. As you know, the Politburo of the CPSU Central Committee in 1972, deciding on the equipment of the Soviet Olympic team, chose this label. In this way, the triple-striped boots not only came into fashion, but also became a truly iconic item in the USSR...

The best advertisement for Adidas were our victorious Olympians, dressed head to toe in the "three stripes" label. It was these clothes, which became synonymous with sports victories in the vast USSR, that Soviet viewers most often observed on daily television broadcasts.

For the common Soviet man, "Adikis" became more than just a comfortable shoe for sport, it was also a status. Even our paratroopers in Afghanistan traded in their army boots for Adidas.

 
Реter Konow:
Traders earn ONLY each other's money in the process of redistributing it. No beggars' money is taken by them. It is impossible in principle.

this is a misconception :)

Even if a person who honestly works in a factory has never traded in his life, he is just as exposed to market fluctuations (and not just currencies)

Economic mechanisms are much more complex than it may seem at first sight

for example, a seller-importer who imports new iPhones covers market risks in the price of goods

the buyer pays this premium when he buys the phones (or he has no other choice) and it becomes part of the regional revenue which is then repaid at the end of the reporting period

furthermore, it will be difficult to trace how and in which areas the premium is distributed, but it will obviously vary according to changes in market conditions

similarly in any contract there is a currency and settlement terms which at the moment of execution may differ from those initially assumed

I do not mean to say that a trader steals a part of the salary of a specific factory worker, because this process is very blurred in the mass of redistribution

especially pensioners: pension fund managers are usually very conservative and sometimes simply do not earn or earn very little

thus the final consumer- pensioner loses out to the average market return and to aggressive managers

Even if we assume that profits of an aggressive manager are strictly equal to losses of a conservative one, then even in this case, the trader takes away a part of future pensioners' income.

There are more complicated examples with the bond market and corporate financing.

the factory does not exist in a spherical vacuum :)

But if the above was not convincing, then you may ask yourself this question:

if traders weren't earning at least something (on average) would this activity even exist?

I mean, would there be such a class/group of people as traders if they didn't earn anything?

Having thought about this, we can move on to the next thesis:

if traders earn something, where would the profit come from? hehe

Isn't it obvious that traders (in their totality) feed on a part of the aggregate social product?

However, we cannot say that traders produce nothing.

they create market liquidity

 
transcendreamer:

This is a misconception :)

Even if a person who honestly works in a factory has never traded in his life, he is still exposed to market fluctuations (not only in currencies).

economic mechanisms are much more complex than it may seem at first sight

for example, a seller-importer who imports new iPhones covers market risks in the price of goods

the buyer pays this premium when he buys the phones (or he has no other choice) and it becomes part of the regional revenue which is then repaid at the end of the reporting period

furthermore, it will be difficult to trace how and in which areas the premium is distributed, but it will obviously vary according to changes in market conditions

similarly in any contract there is a currency and settlement terms which at the moment of execution may differ from those initially assumed

I do not mean to say that a trader steals a part of the salary of a specific factory worker, because this process is very blurred in the mass of redistribution

especially pensioners: pension fund managers are usually very conservative and sometimes simply do not earn or earn very little

thus the final consumer- pensioner loses out to the average market return and to aggressive managers

Even if we assume that profits of an aggressive manager are strictly equal to losses of a conservative one, then even in this case, the trader takes away a part of future pensioners' income.

There are more complicated examples with the bond market and corporate financing.

the factory does not exist in a spherical vacuum :)

But if the above was not convincing, then you may ask yourself this question:

if traders weren't earning at least something (on average) would this activity even exist?

I mean, would there be such a class/group of people as traders if they didn't earn anything?

Having thought about this, we can move on to the next thesis:

if traders earn something, where would the profit come from? hehe

Isn't it obvious that traders (in their totality) feed on a part of the aggregate social product?

However, we cannot say that traders produce nothing.

they create market liquidity

The question "where does the profit come from" has the simplest answer:
Profit ensures the counterparty's loss in the transaction. This is the basis of redistribution of funds.

The traders' profits are formed from the losses of their counterparties, who are also traders. That is, the traders provide each other profits with their deposits.

Bring retirees here...))) If they are traders, they must be willing to lose, and if they are not - the speculative market does not affect them in any way.

The specific trader trades on his deposit, and where he gets it from is another matter.


The funny thing is that modern traders do not know that they make deals with each other and do not understand where the profit comes from and where their deposit goes when they lose.))))
 
Реter Konow:

such an interpretation would be equivalent to saying that the whole financial market is just a casino

but any educated person would understand that this is a watered down definition of a market separate from economics.

 
transcendreamer:

such an interpretation would be equivalent to saying that the whole financial market is just a casino

but any educated person understands that this is an emasculated definition of the market apart from economics.

Nah, not a casino. A trade between two traders opens two opposing positions, the balance of which is reversed by other traders who trade afterwards. The price movement comes from the absorption of volumes of market liquidity and is directed towards the most active buying or selling at the market price.

That is, the side that is more active and agrees to the market price wins. Predicting/finding/explaining rationality in the decisions of the market crowd is not flipping a coin. Therefore, not a casino.

As for the links between the global market and the speculative market - it's a complex topic, but you've drawn hasty conclusions. The global market affects the speculative one much more than the speculative one affects the global one. You've got it all upside down.)))
 
Реter Konow:

Perhaps this "gaming" understanding of the market exists because of a lack of economic education... I can assure you that the market is not just about speculative capital... and the market is not only a place for private gambling traders with their deposits, there are institutional players and the market does not live in isolation from the rest of the world... I recommend you to read Braley and Myers, Alexander and Sharp to gain general understanding of interrelations in the financial world...

I see no point in continuing this discussion, because you are not ready yet (no offense)...


P.S. And I do not deny that there is always a winning side and a losing side

but it does not cancel out that the market is a superstructure over the producing economy

the specific mechanics of trading has nothing to do with it.

 
transcendreamer:

Perhaps this "gaming" understanding of the market exists because of a lack of economic education... I can assure you that the market is not just about speculative capital... and the market is not only a place for private gambling traders with their deposits, there are institutional players and the market does not live in isolation from the rest of the world... I recommend you to read Braley and Myers, Alexander and Sharp to gain general understanding of interrelations in the financial world...

I see no point in continuing this discussion, because you are not ready yet (no offense)...


P.S. And I do not deny that there is always a winning side and a losing side

but it does not cancel out that the market is a superstructure over the producing economy

the specific mechanics of trading has nothing to do with it.

Well, with all my lack of education, I saw no real reason to consider the speculative market to be a source of material harm to anyone other than the traders themselves.
 
khorosh:

...

For the common Soviet man Adidas became more than just a comfortable shoe for sport, it was also a status. Even our paratroopers in Afghanistan traded their army gloves for Adidas.

What were berets like in those days? They were short boots.

 
Dmitry Fedoseev:

What kind of boots were there in those days? Short boots were.

Probably not in the know. The text is from the Internet. Personally, I served 1968-1971 in boots, as head of radio engineering on a ship of 2nd rank.

 
Реter Konow:
With all my lack of education I see no real reason to believe that the speculative market is a source of material harm to anyone except the traders themselves.

Hehehe... Yeah... in most cases the trader is the biggest enemy of himself :)

... but speculators are not the same as speculators (!)

hedge funds are speculators too, but more experienced (usually) than retail unprofessional speculators and novice financial addicts

a non-professional investor turns around a conditional zero, while a fund systematically earns something

and this earnings are not only the amount of the losers' deposits, but also a certain economic component

a piece of the total social product redistributed through complex interconnections...

through the forward market, insurance products, short- and medium-term debt market, interest rate swaps, securitized debt...

for example, a real supplier (let it be oil, wheat... whatever) has the goal of simply insuring a future transaction

A professional speculator has a smarter and more accurate model and sees an undervalued or overvalued option or forward and will use it immediately

if the model turns out to be true, the speculator takes something from the provider's income - from the real economy - not from the windjobbers.

that's the important thing to understand

and speculation in the shares of troubled companies close to bankruptcy?

And the existence of $12 trillion in sovereign bonds with negative yields?

and the capitalisation of American Airlines higher before the coronavirus pandemic? with airline traffic down all over the world?

there are those who have conservatively exploited seasonal trends in commodity markets

and some who bought tons of oil pouring into every available storage facility when the price was good.

It's not just economics, it's even playing on geopolitics.

finally, yesterday-two days ago there was a correction in the high tech sector - should it not have happened after the massive influx of liquidity?

another week actively buying tail risk protection (options) and this is easy to find in the news feed

central banks can make money and they can also screw up

strong stimulus measures can distort market indicators which undermines the role of the market as an efficient allocator of the economy (fair value disconnect)

it is the FV detachment that is the profit for the systematic speculator , I'm telling you

it would be VERY naive to believe that the speculative market consists only of losers who come home from the factory after the second shift and start trading as if they were playing cards

the current state of the economy is highly abnormal and for monetary reasons as well

and when the ratio of calls and puts becomes abnormally high - professional speculators understand what will happen next :)

and when the capitalisation starts to reach almost 200% of GDP :)

And who buys the same calls? The ordinary people who can get them as a structured product, for example in their bank (because deposit rates have become obscenely low).

ordinary people may be shareholders without any speculative purposes, but with dividend aims.

treasuries are increasingly being replaced by corporate bonds not for the good

the investors who would otherwise take short positions because of market overvaluation are afraid to go against the liquidity flow (and are getting what they deserve hehe)

the aggregate scale of risks is actually hard to quantify

to a large extent what is happening now is a global belief in favourable and predictable liquidity (and what if it isn't? hehe)

To say that speculators only take money out of each other's hands is the greatest delusion and a lack of understanding of the very basics of modern world order :)

<graphomania mode off

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