A serious outsider question - are shorts an essential part of capital markets? Or do they at least provide some valuable service to the markets?

They aren’t essential, but they are actually useful. There have been some experiments with banning shorts, but they lead to larger spreads on longs because market participants have to hedge by going risk-off on longs instead of shorting affirmatively. Shorts can create moments of volatility, but they improve overall trading liquidity and reduce frictional cost of capital.

Yes. A short is a way to tell the market you are wrong about value, and by doing so push the value down to more reasonable levels.

Of course they are. If you believe a stock is undervalued, you buy it. If I believe the same stock is overvalued, I sell it. That's how price discovery happens. If only people who already hold the stock are allowed to sell it, then price discovery is impeded.

No, we don’t.

We need to let people build their communities without tethering agency to outsiders who control the flow of imaginary capital.

Pretending a value in a database is real ownership of something is insane and continues to lead humanity towards fascism to protect the oligopoly at the top of the meme pyramid.

You’re selling an appeal to authority that is a complete mirage, only existing in your head because of years of reinforcement.

People can seek capital from whomever they want. But it’s also true that outside capital is useful. If my community has lots of resources and no ideas about how to use them, then the world is better off if I take my resources and find an under-resourced entrepreneur in a less wealthy part of the world to invest in. That’s what capital represents.

...and then you have a bunch of money and resources, and your community has nothing because you took it all out. Then your community wants to redistribute the wealth (because they see how unfair the results were to them), you and your followers scream "COMMUNIST!" at them, and we wind up in a right-wing authoritarian situation instead.

That's what happens when capital runs amok.

Please stop believing you are telling me something that I do not already know.

I’ve been following finance for decades.

American communities are under financed because of capital extraction to improve margins. It’s a mathematical fact which carries far more weight than your hand wavy generalizations.

The extraction has decimated US communities, empowered slave labor across the globe, and entrenched power in hedge funds.

Do the actual research instead of parroting cable news sound bites.

The same pattern happened when manufacturing was pulled from cities to rural areas 100 years ago. This time the capital was pulled from rural areas and sent overseas simply to improve profit. We can decimate the planet on any continent. We do it in Asia to externalize real costs and boost financial margins.

You’re talking in a pure emotional abstract.

Please don't post flamewar comments like this and particularly don't cross into making personal swipes.

https://news.ycombinator.com/newsguidelines.html

> "I’ve been following finance for decades."

But apparently not HN community. Your user was created 1d ago. :P

Building rep with you all is not a priority of mine

I’ve got positions in stocks that go back to the 90s, AAPL @ $5/share, etc.

I’m doing fine in real world terms. Rep in a database that can be shutdown whenever is not something to protect

Ok. Loook . If you have something constructive to share, then share it and everyone will benefit and discuss the merits of your opinions and facts.

.. What the point of being a poser? Applesauce for 5$ — don’t mean a hhhhill of beans to me.