Comment on $1.8 trillion was wiped out from the US stock market yesterday, where did it go?
foodandart@lemmy.zip 1 day ago
It only ends up being really “there” if the stake- and stockholders withdraw their shares and cash out. It’s all paper valuations.
Many billionaires are actually what is known as paper tigers in that their wealth assets aren’t real, (as in real estate) because the “wealth” is based on numbers on balance sheets and little else.
Yes, it’s something a lot of people don’t seem to understand. The “value” of a company is it’s stock price multiplied by all the shares and the stock price is pretty much just the last price someone was willing to buy a share at.
If everyone goes and sells all of their Tesla and SpaceX stock and nobody ever buys any again, Elon Musk might not even be a billionaire anymore.
Musk would definitely still be a billionaire.
He sold $1.2 Billion in SpaceX stock just 4 months ago. He sold $22.9 Billion in Tesla stock in 2022, partly to fund buying twitter.
He’s 100% diversified some of that at the very least, even if he’s just parked some of it in the S&P and bonds. He also owns a couple hundred million in real estate.
He wouldn’t be worth over $800 Billion, but he’d absolutely have at least $1 Billion.
Nobody even HAS to sell their shares, the second part is what does all the lifting here: “and nobody ever buys the shares again”.
If overnight, everyone just said “I have no interest in buying at any price” that’s the end of it. The shares are now worthless.
Every seller needs a buyer. If “everyone sold their shares”, all that happened is the share owners changed.
God, wouldn’t that be a dream!
I think it’s absurd the argument gets made that rich people aren’t rich because their assets aren’t real like cash, meanwhile they leverage those assets into loans that are absolutley real and tax-free.
The value is real. The absurdity needs to stop. You can’t say “tax the rich” out of one side of your mouth and then turn around and say “their wealth isn’t real” out of the other. This manipulation of terminolgy to obfuscate how wealth and assets work is pushed by the wealthy themselves to avoid anything that might increase their chances of being taxed. Seriously, if they came out and said “I’m rich as fuck thanks to my assets that I leverage into tax free loans!” How long do you think they’d last? Instead we argue over how “real” things are and say things like “The rich don’t actually have a lot of money…”
RememberTheApollo_@lemmy.world 17 hours ago
I think it’s absurd the argument gets made that rich people aren’t rich because their assets aren’t real like cash, meanwhile they leverage those assets into loans that are absolutley real and tax-free.
The value is real. The absurdity needs to stop. You can’t say “tax the rich” out of one side of your mouth and then turn around and say “their wealth isn’t real” out of the other. This manipulation of terminolgy to obfuscate how wealth and assets work is pushed by the wealthy themselves to avoid anything that might increase their chances of being taxed. Seriously, if they came out and said “I’m rich as fuck thanks to my assets that I leverage into tax free loans!” How long do you think they’d last? Instead we argue over how “real” things are and say things like “The rich don’t actually have a lot of money…”
foodandart@lemmy.zip 9 hours ago
Oh, you’ll get no disagreement from me on that.
If the stock valuation is enough that it can be leveraged to get loans that can be paid off with the accrued gains ON said value, yeah, it needs to be taxed as if it is earned income.
Just reading on how Elon Musk secured the capital to buy Twitter brought that one home.
The angle I was going for isn’t that they’ve poor, it’s that they are locked into a system that means they don’t use or need liquid capital - like you or I do - to get what they want.
Given that when one has billions, the banks charge YOU to hold it, this is why the private equity groups have become so pernicious.
All that untaxed wealth with nowhere to go, so it becomes a powertool for real estate investments to leverage more money out of the working and middle classes or to buy out publicly traded businesses and run them into the dirt.
We’re back to the 1980’s again, an echo of the Michael Milliken/Ivan Boesky scandals - only this time the targets are wildly larger and hitting main street.