Comment by MarkusQ
4 hours ago
Reminds me of the Egg Greed Graph.
https://pbs.twimg.com/media/HFa2bQlWcAARYNB.jpg
Why is it people have such a hard time understanding that this is what we want markets to do? If there is a scarcity of some resource, the prices rise and this motivates producers to produce more and consumers to consume less, until an equilibrium is found. On net, this means that we can have more of what we want for less effort over time. Yes, the people doing this profit from it. That's why they do it.
Collusion is not a market force and is actually highly illegal and corrupting of markets, so this doesn't seem relevant at all.
Having now read the actual complaint / emails, I'd like to revise my position (if anyone cares).
Prices go up in response to shortages in a properly functioning market, but these clowns were clearly over the line and trying to manipulate the prices in addition to that.
https://www.justice.gov/atr/media/1450281/dl
Greed isn’t “forgotten” its reined in by regulation.
Consumers don't want to understand it because they don't want to consume less.
I mean no. The LIBOR analogy is appropriate. Large, long-term egg supply contracts are fixed to an index and that index was manipulated. That's criminal conspiracy and price fixing, not just a liquid market.
That's notably different from say the current scrum for HBM where the demand truly came as a surprise and scarce supply gets bid up.
Micron's windfall is justified and natural as these things go. The egg windfall was manufactured and criminal.
LIBOR didn't triple the rate. I don't doubt that they screwed around at the margins but the extreme volatility in egg prices were predominantly caused by the underlying economic factors.
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As the article says, people have a hard time understanding it because it turned out not to be what's happening. I was on the other side of the debate, I thought it was absurd, but it turns out egg company executives really were sending each other messages saying "let's manipulate the price upwards so that we can make more money".
The chart is meant to show how absurd the conspiracy theory is, but it turns out it’s literally what happened this time around at least. Well they didn’t forget their greed of course, they just temporarily lost the ability to exercise it.