A thought provoking article about a bet on American Malls heading towards a crash.
It's a good thing I didn't just blindly close the hundreds of tabs that I have open because I just read this beautiful, amazing and thought-provoking piece by Esquire (which has some amazing long reads BTW) on a wall street hedge fund betting that american shopping malls were going towards a crash.
It was amazing and fun to read but at the same time there's a deeper and sadder issue of the impact this has on the people. I'm not talking about the people impact of the bet itself but the fact that a bet can be made in the first place.
Two paragraphs nicely sum up the issue.
“A well-documented historical pattern is that fraud thrives in boom periods and is revealed in busts,” the university researchers wrote, adding that end investors were unaware of this hidden risk, a deception akin to buying a Ferrari secretly outfitted with a rusted-out Kia engine. It could be argued that CMBS had been a magic trick all along, with big banks one step ahead, luring investors to pick a card from a rigged deck. It took a global pandemic—an act of God—to reveal this financial sleight of hand.
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A righteous person would say that making money off the back of a global pandemic is at best opportunistic and at worst downright immoral—that the ghoulish deus ex machina that made short-sellers rich included hundreds of thousands of people dying and widespread economic devastation—but McNamara doesn’t see it that way, especially considering that MP placed their bet over a year before COVID-19 began.
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The world of modern finance is amazing and terrifying.
