New ask Hacker News story: Tell HN: Musk doesn't "have" a Trillion, he has the leverage
Tell HN: Musk doesn't "have" a Trillion, he has the leverage
4 by ggm | 1 comments on Hacker News.
I wish a competent economist could blog that Musk (and the other uber rich) don't have liquid cash to pile up on their yacht the way the graphics imply. Even the act of selling his stake in tesla and X and spacex would alter the value of the holdings, alter the tax income for some nation state, the act of printing the money would in turn demand time and effort, shipping the money would incur costs. Having the effective influence over investment disposition of $1T is amazing but it isn't actually the same thing qualitatively as "one trillion dollars" nor is it just a quantitative function over "1 million dollars". Because it's 1/30th of the entire US economy (around $30t) and so materially alters 3% of the value of the US working capital, and a little over 1% of the entire US stock market at $75t) In order to have the money he'd create an instant liquidity crisis. He'd hoover up all the share trading cash, and so would instantly devalue all the other stocks. It would be a massive event. A billionaire liquidating their shareholdings is 1,000th the impact. It would be notable but not an earthquake except in the narrow space they sold in. Billion dollar trades are done carefully. Million dollar trades are unremarkable. His net worth is calculated in a sub multiple of actual sales, which are also huge, but it's not the trillion either. He didn't stake a trillion and sell a trillion. The trillion is a mutable legal fiction.
4 by ggm | 1 comments on Hacker News.
I wish a competent economist could blog that Musk (and the other uber rich) don't have liquid cash to pile up on their yacht the way the graphics imply. Even the act of selling his stake in tesla and X and spacex would alter the value of the holdings, alter the tax income for some nation state, the act of printing the money would in turn demand time and effort, shipping the money would incur costs. Having the effective influence over investment disposition of $1T is amazing but it isn't actually the same thing qualitatively as "one trillion dollars" nor is it just a quantitative function over "1 million dollars". Because it's 1/30th of the entire US economy (around $30t) and so materially alters 3% of the value of the US working capital, and a little over 1% of the entire US stock market at $75t) In order to have the money he'd create an instant liquidity crisis. He'd hoover up all the share trading cash, and so would instantly devalue all the other stocks. It would be a massive event. A billionaire liquidating their shareholdings is 1,000th the impact. It would be notable but not an earthquake except in the narrow space they sold in. Billion dollar trades are done carefully. Million dollar trades are unremarkable. His net worth is calculated in a sub multiple of actual sales, which are also huge, but it's not the trillion either. He didn't stake a trillion and sell a trillion. The trillion is a mutable legal fiction.
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