[ExI] very stimulating

[spike at rainier66.com]

It occurred to me today that we may have just witnessed in the last few days
the most effective government stimulus plan in history, even if the event
was not actually part of the plan.

 

Reasoning: what kind of people sit about scandalously idle reading Reddit
investment blogs?  Perhaps the first thing that comes to mind is. people
like us.  OK, do ignore us for just a moment, and think of what other
scandalously idle people do things like this?  I think of covid-idled
teenagers, unemployed from their meaningless minimum-wage starter jobs,
reading the blogs and Reddits in their parents' basement between marathons
with their Game Boys.

 

OK so this is deplorably judgmental of me, but for the sake of flimsy
argument, do indulge me please.

 

Suppose there really are hordes of these teenage wastrels sitting around
reading Reddit existing in the real world as they do in my fertile
imagination, and suppose their generous gumbit stimulus checks arrive for
600 dollars, suddenly enabling them to band together and chase the scavenger
masses of short sellers, gathered around the still-warm corpse of a clearly
dying company, such as GameStop.  

 

Perhaps with more than a trace of malice toward anyone who would short their
beloved but clearly distressed GameStop, the teenage hordes single out that
one to do a classic short squeeze, enabling the newly enriched corpse to
suddenly jump up and brutally whoop ass of the hapless scavenger horde,
devouring many, others escaping sans major body parts, such as an arm and a
leg.

 

We measure an economy by the amount of money changing hands.  It has been
plausibly estimated that the hedges were trimmed by as much as twenty.
billion. dollars.

 



 

Help me estimate please.

 

I can imagine anywhere between a thousand and ten thousand scandalously idle
teenagers, so let's go with the higher estimate, multiply by 600 gumbit
dollars each for about 6 million dollars.

 

For a cost of 6 million dollars of stimulus money supplied by. us. perhaps
as much as 20 billion changed hands, for a ratio of over three thousand to
one.  For each of our dollars, hedge funds handed over 3000 bucks.

 

But spike, they objected, trimming the hedges is not the same thing as
production.  No actual goods were produced in that transaction.  

 

Sure, he replied.  But all those idle teens with all that newfound cash will
certainly spur production of actual goods, such as new Game Boy modules
purchased at the newly-revived GameStop and help pay for the freighters to
haul them over the Pacific from China to markets newly flush with cash,
which does count as production.

 

We may have just witnessed the most effective economic stimulus program in
history.

 

spike

 

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