They say you can't cheat an honest man. WSB users were trying to take advantage of shorts by creating a short squeeze; instead they themselves got taken advantage of.
It was obvious. I giggled when a journalist asked a Robinhood executive "how could you dare grey out the buy button, you re scamming investors", and he replied befuddled "how is it a scam to prevent them to buy at the peak of a bubble?".
The disconnect between the short squeeze amateurs and the reality of any market was painful to witness, myself working at a large stock broker. Stocks are worth their dividend over time: stock with no dividend and with only a speculative future value are always a trap. It's ok to be conservative and expect a regular payment related to performance, it's very risky to speculate on other market participants' behavior: they have agency too, and sometimes are competent.
And it created new inflated reality. That's what current baseline is and nobody ain't going back, money are simply worth less... I do expect this trend to continue on medium to large time scale
From a practical standpoint, there's little difference between these things. It's all more money in the pool. It's not like wages are tied to productivity.
Unfortunately it's a fever dream that, as an individual, you have no choice but to buy into. In a world with 7% annual inflation, putting your money in a traditional savings account is tantamount to hiding it under your mattress.
A high yield savings with Discover has a 4.3% APY right now. That's higher than both the mortgage I took out in 2016 and the loan I took out a few years later for new windows on said house.
Don't discount credit unions. If you or a family member is or was in the military you can get into Navy Federal which even offers interest on their checking accounts (!!). And more importantly, a serious lack of fees and add-on charges.
The problem is, eventually there will be a correction, there has to be, as every bubble will pop sooner or later. And then, a lot of people will be left holding really fucking large bags, like the Detroit housing market post-2008 where people were completely underwater with their mortgages, and communities/society at large would be left with the fallout of urban blight.
Meanwhile, those profiting from the bubble all the time have long since cashed out.
And what their shareholders borrow against the value of their inflated shares and never have to pay income taxes? Seems almost like a national bust out based on the article definition.
Either I'm missing your point, or you are missing mine.
Any loans that the ultra-rich take out against their assets to fund their lifestyle, are going to have an associated interest rate, and a payment schedule. If they don't want to default, they'll need another source of funds to make those payments.
IF that source of funds for load servicing is a salary, they'll be paying income tax (income) + interest payments (loan).
IF that source of funds is dividends, then they may be cap-gains or income, depending on qualification status.
In either case: there is..
* A limit to how much can be borrowed, before the loan payments outstrip the loan-funding income or qualifying dividends
* In the case of income, they are still generating an income tax liability to service that loan, and also paying interest on top of it. Paying 124K/year for 10 years to pay off $1M at 4.5% means they fell into the 24% bracket for 10 years ($297.6K tax total) , rather than 37% in 1 year ($370K tax total). So while it does appear to create a tax savings -- even with the 4.5% loan interest -- funding life with loans is not the absolute "never have to pay income taxes" that my PP described it as.
