Thursday, 4 February 2016

Broader questions to be asked about the efficacy of capitalism...

Photographer: Jasper Juinen/Bloomberg
Goldman Sachs Says It May Be Forced to Fundamentally Question How Capitalism Is Working

The NIM force awakens ft
So what the hell is going on? Is capitalism broken? Or is the simpler answer that global capital availability isn’t what we thought it was?
Is the capital stock we think we have actually illusion? And does negative NIM represent not a capital glut …. but perhaps weirdly enough the exact opposite: a large liquid layer atop a very slim capital share?
Perhaps what’s really been happening is that the digitisation of the market since the 1980s has led to the creation of a Gosplan 2.0 mechanism for the world? Which is to say, market signals have been entirely contaminated by the digital sector’s obsession with “eco-systems” and conglomerisation — a Silicon Valley euphemism for cross-subsidisation.
If that’s true, it’s entirely possible the cost of essential goods (internet, telecoms, base foods, base clothes, base transport) has been massively underpriced for years versus their true cost of production at the same that the price of quality goods has been entirely overpriced versus their cost of production as well?

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