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SpaceX bond worth 10% less than issue price – heading for junk bond status

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Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#521

Post by quickthrowman »

shermantanktop wrote: post #118
tyre wrote: post #62

Earlier quoted context omitted.

I'm not an investor in SpaceX but I don't think shorting stocks at IPO should be allowed. The market should be given time to settle on a price, and it's unlikely that anyone needs to short it on day 1 for hedging. It's purely price speculation. Yeah, I know why people _want to_ (betting), but it doesn't serve a broader economic purpose.

“Broader economic purpose”? It’s all betting. If someone wants to dress it up in jargon or talk about beneficial second order effects, they can. But if putting money on an outcome you can’t control isn’t gambling, I don’t know what is.

Gambling is placing a wager with a negative expected value. If you can gain an edge and have positive EV, it’s not gambling. That’s the distinction between poker and slots. A skilled poker player can take advantage of positive EV positions while slots are programmed to have negative EV. There are traders that have positive EV bets.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#522

Post by yobutdude »

JumpCrisscross wrote: post #507
yobutdude wrote: post #490

Earlier quoted context omitted.

Colonies on Mars is a good story Super intelligence is a good story These companies are built on little more than "a good story" for politicians to sell to voters ..."i voted in Congress for that!" You're arguing semantics Economic math is being leveraged against innumerates as euphemism and obfuscation of same old avarice and political corruption. Biology is self selecting. There's no using rhetoric to wave off the…

> a minority of the total population ensuring their own lived experience is put above everyone else's That’s a new use of that term!

No it is not. Appeals to equality of condition have existed for centuries. Among them are that term used verbatim.

Ignored the other points and redirected to the least salient. Will take it as acceptance you realized how silly your carrying water for people who don't know or care you exist is.

Age of account makes it clear you need the social system to remain solvent as you're likely rich on paper. Nothing more.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#523

Post by quickthrowman »

wredcoll wrote: post #367
clickety_clack wrote: post #339

Earlier quoted context omitted.

Yes, because the guy buying your bananas is able to make banana-buying decisions for next week based on the price you give him. You’re not going to make up a silly low number because you actually have to buy the bananas yourself at some point, and you help price discovery because now that guy isn’t buying bananas at a higher price than someone is willing to sell them for.

Just as a thought experiment, would you say there are any (societal) negatives to the possibility of thr price of bananas (or the share price of spacex) being able to fluctuate wildly based on semi-abstract economic manipulations, like shorts and futures and such. What I'm getting at is when does it go from investing, "I think this entity is going to take my money and use it to build a profitable factory that will th…

Volatility should be lower with more market participants. More participants means that more information can theoretically be priced in.

Producers that use commodity futures to lock in a sale price need a buyer or speculator to take the other side of the transaction.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#524

Post by bit-anarchist »

thewebguyd wrote: post #385
wredcoll wrote: post #299

Earlier quoted context omitted.

The term "capitalism" was literally only created for the purpose of writing criticisms of the (then) current system of markets/trading/taxing/investing. Try actually defining capitalism in a way that doesn't apply to basically any random society since the dawn of agriculture. Stuff like people buying and selling items using a currency for a price the individual chooses has been common to basically every human society…

> Stuff like people buying and selling items using a currency for a price the individual chooses has been common to basically every human society we have written records for. That's a market economy, which may or may not be capitalist. Markets have existed for thousands of years under various economic systems. Agree on your other points though, 'capitalism' was coined to just describe and criticize the system they sa…

Apply it to reality, and things get muddy really quickly.

The major issue is the "private ownership of the means of production". While some argue it's a recent development, others (like me) argue it has been present since the dawn of civilization and, ignoring the "free market" and "voluntary transactions" part, one could argue both feudalism and socialism are capitalistic systems, with the latter often receiving the term "state capitalism", instead.

And then there's the issue of "wage workers". Workers who own their means of production (i.e. freelancers) are still often considered "capitalists" themselves, as under the umbrella of "small capitalists", even if they rely more on their labor than their ownership.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#525

Post by runarberg »

infecto wrote: post #435
runarberg wrote: post #105

Earlier quoted context omitted.

So you are saying it could have been worse, and therefor it is not that bad. I feel like this may be a logical fallacy. It is like saying that the worst thing about twin earthquakes in Venezuela was not the fact that there were two of them, because there could have been three.

Defend your position instead of comparing to earthquakes. The Nasdaq 100 is already quirky in that it’s the largest 100 non-financial companies listed on Nasdaq. So it’s a large-cap growth/tech play or for Nasdaq a showcase piece. I don’t think it’s great they remove the 3 month criteria but also knowing the specific slice of potentially unprofitable companies it highlights does not make it as concerning as the SP500…

To clarify: I am not comparing anything to these horrible earthquakes. I am comparing the above rhetoric to a hypothetical rhetoric about the earthquakes.

Nobody would actually say this about these earthquakes, and that is my point.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#526

Post by runarberg »

wredcoll wrote: post #373
danudey wrote: post #344

Earlier quoted context omitted.

Saw an interesting discussion on how capitalism has existed for as long as markets have existed, including ancient Greece, and how it inevitably leads to wealth inequality, monopolistic behavior, unsustainable resource extraction, and all the other negatives we see today. The only difference is that in Greece, all of these negatives would have been applied locally but now they're all being applied globally. Instead o…

I would more simply define that as "wealth inequality" rather than capitalism (or more broadly, power inequality) and perhaps go on to say that the real problem is that, while you can't realistically prevent/remove all inquality, most systems do a poor job of preventing the people with more money/power from using that to consistently increase their own share.

No need to do that, Capitalism—just like feudalism and mercantilism before it—is about how power is distributed. Both feudalism and mercantilism also had extreme wealth (and power) inequality (feudalism arguably had more), as did communism for that matter.

What makes capitalism different is that the power is distributed along capital (as opposed to handpicked by the king under feudalism; or embedded in government monopoly under mercantilism).

In other words, in capitalism, the owners of capital (or the owners of the means of production; i.e the rich; the aristocracy; etc.) are the ones who get to dictate the living conditions of the rest of society. The rulers (be it democratically elected government; an absolute monarch; a military dictatorship) will legislate in order to maintain the interest of the owners of capital. The police (or military) will fight for the interest of the owners of capital, and will suppress any resistance against the interest of the rich, etc.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#527

Post by phil21 »

timacles wrote: post #445
phil21 wrote: post #271

Earlier quoted context omitted.

No. This is how crony-capitalism works. You could make a decent argument that capitalism will very likely end-game devolve into crony-capitalism as it's typical failure mode, but I don't think it's written in stone. It's funny to me. Everyone rails about Atlas Shrugged being some libertarian fantasy story. I always read it as an allegory warning about crony capitalism and how it ruins society along with a story about…

Socialism capitalism, history shows basically all human systems devolve into corruption regardless of how sound the underlying concepts are. Which I’m surprised people don’t point out more. What does it matter which system is the best when at the end of the day the powerful people are going to make back room deals to subvert it and that always leads to a feedback loop

Yep. This is how I view the world these days too. All systems will inevitable devolve into corruption and centralized power. The best system I suppose is the one that starts with the most distributed means of power possible, and then that gives the most quality of life years out of anything before it's time for a horrific reset again.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#528

Post by dofm »

blargey wrote: post #499
dofm wrote: post #415

Earlier quoted context omitted.

> But anything you and I are aware of, they probably are too. This is something that seems like it should be true but the subprime crisis (which didn't at all come out of the blue — anyone with any instinct at all should have understood when they first saw someone get given insane mortgages) argues against.

The subprime crisis was a story of perverse financial incentives causing the industry to play along with a fig-leaf statistical excuse for overrating derivative products, not bond raters botching ratings or missing "common-knowledge" info about specific mortgages. If you want to suggest the subprime crisis as a mechanism for SpaceX bonds getting mispriced, you need to propose a model for how bond evaluators could be…

> If you want to suggest the subprime crisis as a mechanism for SpaceX bonds getting mispriced

I don't? I'm just observing that the bond market got something wrong — through an absolutely industry-wide blindness - that was indeed observed, years beforehand, by non-experts. Not my example, even. Just responding.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#529

Post by sebastiennight »

wredcoll wrote: post #520
idiotsecant wrote: post #457

Earlier quoted context omitted.

plows and mill stones and spinning wheels are excellent examples of exactly what a feudal lord owned. They owned the land, the major structures on that land, and the major implements on that land. If you wanted to use them you paid the lord in fees via goods, labor, etc. It's basically the gig economy - you will own nothing, your labor will be for his benefit, and if you want to keep participating you'll make it wort…

That did occasionally happen but I don't think it was the majority case by any means. That being said, if we're talking about the lord owning the mill you labor at, how is that different than tesla owning the car factory you work at?

Tesla does not, AFAICT, also own the land you live on. They pay you in fiat currency that can be exchanged for other goods sold by any provider.

A better comparison to support your "capitalism = feudalism" argument would actually be the era of company stores and truck wages: https://en.wikipedia.org/wiki/Sixteen_Tons

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#530

Post by fc417fc802 »

JumpCrisscross wrote: post #474
tavavex wrote: post #463

Earlier quoted context omitted.

My comment never says the rules are set in stone permanently - only that every stock needs to abide by the current set, unless there's enough money in play in which case the rules are edited then and there to specifically accommodate that company.

> unless there's enough money in play in which case the rules are edited then and there to specifically accommodate that company The Nasdaq 100 rule change covers multiple companies. Like, there is so much wrong with the SpaceX IPO. It’s kind of weird, as someone who’s spent time in both the equity capital markets and private markets, to see this being the thing finance Twitter has fixated on.

> The Nasdaq 100 rule change covers multiple companies.

I don't think that's relevant to the point you're responding to there. A rule change can apply to many parties while the content and timing nonetheless target a single player. The two things aren't at odds.

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