In recent years, there has been this shift on social media. I believe that this trend has been targeting more men than women. This is the trend of trading and investing. The aesthetics are always similar, it is almost always a muscular guy with either an expensive car or Dubai in the background and him preaching how easy it is to make money nowadays day trading only if you follow his course in which he will reveal his secret formula. News flash everyone, just a very tiny minority of traders make money day trading, that is why many of them resort to making courses to get a better income.
Though this is just a subset of the broader financialization trend in the world. Digital technology has led to the democratization of investing and trading through platforms like Robinhood. This is yet another symptom of our collapsing civilization because it has become a large scale gambling operation that now you can join in on the action by just downloading an app, then you can start speculating on the world economy. Each year, more and more millions of people are using the global economy as their own casinos that they have on their apps. These types of services lead to massive economic bubbles, which collapse the economy every once in a while. We are seeing this on a large scale with companies not even being profitable and receiving hundreds of billions of dollars.
I cannot just blame users for this behaviour, you need to look at the state of the world economy and factors which determine this kind of behaviour. If we take a deterministic lens like McLuhan does, what do we find? Well, many obvious things pop out.
Goodbye Pension…Hello Investing & Trading
Look, if you are my age, early twenties, I doubt whether we will receive a liveable pension if we do not take our pension into our own private hands. What does this mean?
Let us go back to the time of my grandparents who were born in the 40s and 50s. The expectation back then was to work and pay social security, then when retirement came along people’s pensions would be enough. This, however, has collapsed. Now it is up to you to save up money for your retirement. The funny thing is, I know U.S. financial terms like Roth IRA or 401k because they have been shoved down my throat, but I do not know the equivalent EU terms. This just goes to show you that the situation in the U.S. is much worse than in Europe.
In the U.S., people’s real wages have remained stagnant since the 70s. All the while, wealth inequality is ripping their society apart, with immigrants currently taking the blame. I do not blame people for wanting to get into the action of gaining wealth. Environmental pressures are funneling desperate people down this path, with only the winners being showcased.
https://hbr.org/2017/10/why-wages-arent-growing-in-america.com
People are always touting the U.S. stock market as this miracle investment. The deal goes, on average the market keeps growing at 10%. Adjusted for inflation, it is around 6–7%. Logically, looking at it from the perspective of an individual, it would make sense to do a long-term investment in the S&P 500. Money is in itself worthless and prone to lose its value over time, so it is better to buy appreciating assets. However, there is a problem with this system; the disconnect of capital and the real economy, and that all this money that is being invested in the stock market is not doing anything productive. Side note, these people benefits from people buying stocks because it increases their worth.
Let us say you want to buy Tesla stock, you are usually going to buy it from a private person selling the stock, you are not buying it from Tesla itself. The value of these stocks is determined by speculation and market forces. Tesla does not directly get anything from your purchase, rather they benefit from their market capitalization, meaning what investors think the company is worth.
How do investors determine the worth of the company?
God only knows, because look at this… I think this will illustrate my point of the growing discrepancy between the real and the financial economy. This goes to show you how we have not learnt that much from the 2008 financial collapse.
In 2024, Toyota had the most earnings in 2024, around $38.91 billion, whereas Tesla had around $8.05 billion. Surprisingly, Tesla stock is 5–6× higher than Toyota. This means investors believe that Tesla is 6× more valuable than Toyota. This is basically saying that investors believe they will see a greater return on their investment if they invest in Tesla. However, we are in dangerous territory here. Once the perceived worth of a company is disconnected from reality and now derives its value through hype or fantasy, money can be made or lost very rapidly. Once there is a rift between the real economy and the financial one, speculation about price takes over. It is not about profit, revenue, cars, or long-term sustainable growth, it is more about what people think about Elon Musk right now through his tweets on social media. People, especially in the U.S. but arguably everywhere on earth, are basing value off these fantasies.
Let me illustrate this to you all: a lot of the stock market has devolved into just gambling. Let us say you want to invest €10,000. You can do either the boring investment of 6–7% return year on year or you can speculate and get €90,000 in return. There is a whole community for this. If you want r/Wallstreetbets, if you want to see the current madness in our financial system, check it out.
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