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Insanity: Screening elements in the HV

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Re: Insanity: Screening elements in the HV
Post by penny   » Fri Dec 13, 2024 12:49 pm

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Jonathan_S wrote:You have to remember that the Junction is far more like a canal (or really confluence of canals) than it is a market.

Sure, some ships will be doing business at Landing and therefore will care about business hours of the businesses there. Others would have been doing business at Yawata Crossing (Sphinx) and instead care about business hours there. But most of them are just passing through and, at most, are interacting with the Junction warehouses -- they won't ever head in-system and couldn't care less whether it was business hours at any particular city across the MBS's three planets. And those Junction warehouses are almost certainly a 3-shift 22.45 T-hour a day operation (i.e. always open).

For example a ship carrying cargo from the western side of the League to Sol would pop out of the Junction from Lynx, u-turn and queue up to pop through to Beowulf - its arrival times wouldn't even be based on business hours on Lynx (as it would have little reason to even visit that system; and would instead head directly to the nearby uninhabited system where the terminus actually is)

So sure, of the ships that head in-system most are probably headed to Landing. And so you might well get more traffic coming back from there that departed during its day than its night. (But even then it'd be spread some since unless you're giving your crew extra shore leave it's unlikely that your cargo will finish getting moved at exactly the start or end of the local business day) But you'll have other ships headed to the other planets, or even cities on other parts of Manticore, and hence with different local business hours. And not all those ships have the same acceleration, so you also get differing transit times across the 7 LH from the hyper limit out to the junction will cause traffic to unpredictably bunch up or spread out from how it was when it left the planet.

So given the wild mix of through traffic, local traffic dealing with multiple cities across multiple worlds (so a wide mix of time zones that don't even have fixed offsets from each other), and differing speeds, I don't see you having any kind of fixed "rush hour" at the Junction. There will be busy times; but I don't think they'd be at predictable times of day -- more like when various hard to predetermine factors happen to line up to generate a traffic surge (and other times those factors will line up the other way and you'll get a traffic lull instead)




I posted this before. I will post it again to get one in the right mindset as far as cornering the market on trade as the MBS has done.

https://www.npr.org/sections/money/2013 ... ing-places


I don't think most people understand what happens in the MBS on a daily basis. Not to mention quarterly (or whatever schedule that preys on the MBS) when companies release their reports.

To take advantage of a market and to prevent the market from taking advantage of you, one must be properly poised and positioned to do so. At one point that meant having someone physically representing your interests on Wall Street. Which means having a man down in the trenches on the selling room floor. Physically.

There must be a physical presence there on Wall Street when the opening bell rings. You cannot be at a realtime remove from the trading. I do not know where the slogan “Time is money” originated, but Wall Street is a good guess. The Dukes were a powerful company, so they had some of the best seats in the house. Time is critical. At one point one could not efficiently take advantage of the data from across the globe. Time delays in intercontinental data and phone calls were just too limiting. The delay could cause one to go bust. Today, offices are located in major hubs in the US that are still poised in realtime.

Enter the HV. If you dabble in the market and you do not have representation physically located in the system to take advantage of realtime data and to prevent realtime data from taking advantage of you, then you are doomed. How many systems are in the HV? How many dispatch boats does that represent on a daily basis reacting to data and sprinting that data to and fro?

There should be so much traffic in the HV that it is mind boggling. I can bounce back from the boggling because I have some clue. But even I can't fathom the amount of trade going on in the HV. Where does that leave all of you?


Why Wall Street “Is” a Key Player in the World Economy

https://www.trade2win.com/articles/?prefix_id=22


The most important financial center in the world? A fabled place of silver spoons and golden parachutes? A hub of cut-throat capitalism? Or all of the above. Wall Street is many things to many people, and the perception of what it really is depends on who you ask. Although people’s views of Wall Street may differ widely, what is beyond dispute is its enduring impact not just on the American economy, but on the global one.

What Is Wall Street Anyway?
Wall Street physically takes up only a few blocks that amount to less than a mile in the borough of Manhattan in New York City; however, its clout extends worldwide. The term “Wall Street” was initially used to refer to the select group of large independent brokerage firms that dominated the U.S. investment industry. But with the lines between investment banks and commercial banks having been blurred since 2008, Wall Street in current financial parlance is the collective term for the numerous parties involved in the U.S. investment and financial industry. This includes the biggest investment banks, commercial banks, hedge funds, mutual funds, asset management firms, insurance companies, broker-dealers, currency and commodity traders, financial institutions, and so on.

Although many of these entities may have their headquarters in other cities such as Chicago, Boston, and San Francisco, the media still refers to the U.S. investment and financial industry as Wall Street or simply “The Street.” Interestingly, the popularity of the term “Wall Street” as a proxy for the U.S. investment industry has led to similar “Streets” in certain cities where the investment industry is clustered being used to refer to that nation’s financial sector, such as Bay Street in Canada and Dalal Street in India.

Why Wall Street Has Such an Impact
The U.S. is the world’s biggest economy, with 2019 gross domestic product (GDP) of $21.4 trillion, comprising 24.8% of global economic output. It is one and a half times the size of the second-biggest economy, China (2019 GDP = $14.14 trillion). In terms of market capitalization, the U.S. is the world’s biggest by some distance, comprising 40% of global market capitalization (as of August 2018). Japan’s market is a distant second, with just over 7.5% of the global market cap.

Wall Street has such a significant impact on the global economy because it is the trading hub of the biggest financial markets in the world’s richest nation. Wall Street is home to the venerable New York Stock Exchange, which is the undisputed leader worldwide in terms of average daily share trading volume and total market capitalization of its listed companies. The Nasdaq Stock Exchange, the second-largest exchange globally, also has its headquarters on Wall Street.

How Does Wall Street Have Such an Impact?
Wall Street affects the U.S. economy in a number of ways, the most important of which are as follows:
  • Wealth Effect: Buoyant stock markets induce a “wealth effect” in consumers, although some prominent economists assert that this is more pronounced during a real estate boom than it is during an equity bull market. But it does seem logical that consumers may be more inclined to splurge on big-ticket items when stock markets are hot and their portfolios have racked up sizable gains.

  • [b]Consumer Confidence: Bull markets generally exist when economic conditions are conducive to growth and consumers and businesses are confident about the outlook for the future. When their confidence is riding high, consumers tend to spend more, which boosts the U.S. economy since consumer spending accounts for an estimated 70% of it.

  • Business Investment: During bull markets, companies can use their pricey stock to raise capital, which can then be deployed to acquire assets or competitors. Increased business investment leads to higher economic output and generates more employment.[/list[



    Global Bellwether
    The stock market and the economy have a symbiotic relationship, and during good times, one drives the other in a positive feedback loop. But during uncertain times, the interdependence of the stock market and the broad economy can have a severely negative effect. A substantial downturn in the stock market is regarded as a harbinger of a recession, but this is by no means an infallible indicator.

    For example, the Wall Street crash of 1929 led to the Great Depression of the 1930s, but the crash of 1987 did not trigger a recession. This inconsistency led Nobel laureate, Paul Samuelson, to famously remark that the stock market had predicted nine of the last five recessions.

    Wall Street drives the U.S. equity market, which in turn is a bellwether for the global economy. The 2000-02 and 2008-09 global recessions both had their genesis in the U.S., with the bursting of the technology bubble and housing collapse, respectively. But Wall Street can also be the catalyst for global expansion, as is evident from two examples in the current millennium. The 2003-07 global economic expansion commenced with a huge rally on Wall Street in March 2003. Six years later, amid the biggest recession since the 1930s depression, the climb back from the economic abyss started with a massive Wall Street rally in March 2009.

    Why Wall Street Reacts to Economic Indicators
    Prices of stocks and other financial assets are based on current information, which is used to make certain assumptions about the future that in turn form the basis for estimating an asset’s fair value. When an economic indicator is released, it would usually have little impact on Wall Street if it comes in as per expectations (or what’s called the “consensus forecast” or “analysts’ average estimate”). But if it comes in much better than expected, it could have a positive impact on Wall Street; conversely, if it is worse than expected, it would have a negative impact on Wall Street. This positive or negative impact can be measured by changes in equity indices like the Dow Jones Industrial Average or S&P 500, for instance.

    For example, let’s say that the U.S. economy is coasting along and payroll numbers that are to be released on the first Friday of next month are expected to show that the economy created 250,000 jobs. But when the payroll report is released, it shows that the economy only created 100,000 jobs. Although one data point does not make a trend, the weak payroll numbers may lead some economists and market-watchers on Wall Street to rethink their assumptions about U.S. economic growth going forward. Some Street firms may lower their forecasts for U.S. growth, and strategists at these firms may also reduce their targets for the S&P 500. Large institutional investors who are clients of these Street firms may choose to exit some long positions upon receiving their lowered forecasts. This cascade of selling on Wall Street may result in equity indices closing significantly lower on the day.

    Why Wall Street Reacts to Company Results
    Most medium to large-sized companies are covered by several research analysts who are employed by Wall Street firms. These analysts have in-depth knowledge of the companies they cover and are sought after by institutional “buy-side” investors (pension funds, mutual funds, etc.) for their analysis and insights. Part of analysts’ research efforts are devoted to developing financial models of the companies they cover and using these models to generate quarterly (and annual) revenue and earnings per share forecasts for each company. The average of analysts’ quarterly revenue and earnings per share (EPS) forecasts for a specific company is called the “Street estimate” or “Street expectations.”

    Thus, when a company reports its quarterly results, if its reported revenue and EPS numbers match the Street estimate, the company is said to have met Street estimates or expectations. But if the company exceeds or misses Street expectations, the reaction in its stock price can be substantial. A company that exceeds Street expectations will generally see its stock price rise, and one that disappoints may see its stock price plunge.

    Wall Street Criticisms
    Some criticisms of Wall Street include:
    • It is a rigged market: Although Wall Street operates fairly and on a level playing field most of the time, the convictions of Galleon Group co-founder, Raj Rajaratnam, and several SAC Capital Advisors on insider trading charges, reinforce the perception held in some areas that the market is rigged.

    • It encourages skewed risk-taking: The Wall Street model of business encourages skewed risk-taking since traders can make windfall profits if their leveraged bets are right, but do not have to bear the huge losses that would result if they are wrong. Excessive risk-taking is believed to have contributed to the meltdown in mortgage-backed securities in 2008-09.

    • Wall Street derivatives are WMDs: Warren Buffett warned in 2002 that the derivatives developed by Wall Street were financial weapons of mass destruction and this proved to be the case during the U.S. housing collapse when mortgage-backed securities went into free-fall.

    • Wall Street can bring the economy to its knees: As discussed earlier, and as seen in the Great Recession of 2008-09.

    • Too Big To Fail rescues need taxpayer funds: Giant Wall Street banks and firms that are deemed “Too Big to Fail” would need taxpayer funds if they are in need of a rescue.

    • Disconnect from Main Street: Many see Wall Street as a place where unnecessary middlemen abound, who are very well paid despite not generating value for the real economy like Main Street does.

    • Wall Street arouses envy in some and anger in many: Million-dollar payouts that are quite common on Wall Street arouse envy in some and anger in many, especially in the aftermath of the 2008-09 recession. For example, “Occupy Wall Street” claimed in its manifesto that it “is fighting back against the corrosive power of major banks and multinational corporations over the democratic process, and the role of Wall Street in creating an economic collapse that has caused the greatest recession in generations.”



In Summary
Wall Street consists of the largest stock exchanges, the largest financial firms, and employs thousands of people. As the trading hub of the world’s biggest economy, Wall Street has an enduring impact not just on the American economy, but also on the global one.


There are daily stock reports. There are weekly stock reports. The big companies release their earnings quarterly. You may recall such reports like, “Q3 earnings for company X down a certain percentage.”

There are thousands of workers who make their way to Wall Street every day. These people work for banks, brokerages, hedge funds, insurance companies and mortgage lenders. It is the largest single sector of the American economy. An industry that is almost double the size of America's manufacturing sector. A business with enormous power and global reach.

Banks exist to create the wealth. They hold in trust our collective worth. Promising to invest trillions of dollars streaming in from businesses, pension funds and savings accounts. That belong to all of us.

Data. Data runs the entire thing. Transparency is a must. There are people from all sorts of places that travel to the MBS to trade, buy and sell. One cannot afford not to do business in the MBS. Ones representative must be physically present in the MBS to represent. When those stock reports go out, a buyer, seller, etc., must be properly placed and poised to take advantage of such data. It's a market! There should be empty freighters waiting to buy or sell perishable goods.

I hardly think posters are aware of just how busy the MBS must be. A market cannot conceivably corner the market on trade without the telltale signs of this immense trade! There is a veritable gold rush in the MBS each and every day! It intensifies on a quarterly basis when companies release their reports. Analysts must get their hands on that data as soon as possible. An analyst just see acquisitions coming ahead of time. Or failures. Or weaknesses in companies that expose them to being the target of an acquisition. Friendly or otherwise. If you want to make a fortune for your business, planet or system, then you send your best broker to where the well is overflowing. Ask yourself how many systems are there in the HV being represented in the MBS just for daily stock reports! These people must relay that data back to their system daily!

Over 50% of Americans own stock. These people are represented on Wall Street. There are 346M people in the US alone.


Taken off the net:

Canada ranks 7th in the world among countries that invest the most in the stock market

These results highlight the diversity of people's participation in stock markets around the world, reflecting the different economic, cultural and regulatory factors specific to each country. The United States clearly stands out as the country with the highest percentage of its population investing in the stock market, reaching 58%. In 7th place is Canada, with 39% of its population holding shares on the local stock market.


In case you missed the data:

The MBS = Wall Street

And just like Wall Street some systems hate it.
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The artist formerly known as cthia.

Now I can talk in the third person.
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Re: Insanity: Screening elements in the HV
Post by tlb   » Fri Dec 13, 2024 1:24 pm

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penny wrote:The MBS = Wall Street

Do we really know as true that Manticore houses the biggest financial center in the galaxy? It is true that the Manticore wormhole junction spans a large amount of the periphery of the Solarian League. But only the link to Beowulf actually penetrates into the heart of the SL (which is where the greatest amount of financial activity takes place), so why wouldn't the financial center of the SL be in the Sol System - the center of the League government?

It certainly would have been in Sol before Manticore hit its stride and the Core Worlds of the League (except for those closest to Beowulf) are not connected to Manticore, which mainly dominates trade outside the Core.
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Re: Insanity: Screening elements in the HV
Post by ThinksMarkedly   » Fri Dec 13, 2024 1:45 pm

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tlb wrote:Do we really know as true that Manticore houses the biggest financial center in the galaxy? It is true the the Manticore wormhole junction spans a large amount of the periphery of the Solarian League. But only the link to Beowulf actually penetrates into the heart of the SL (which is where the greatest amount of financial activity takes place), so why wouldn't the financial center of the SL be in the Sol System - the center of the League government?

It certainly would have been in Sol before Manticore hit its stride and the Core Worlds of the League (except for those closest to Beowulf) are not connected to Manticore, which mainly dominates trade outside the Core.


I think it might.

One reason a financial centre is relevant is that its self-perpetuating critical mass: that's where most of the trade had happened, so traders have set up their branches or head offices there, which means that's where they will conduct their trades. That's New York today and this was the main reason it remained the biggest financial centre through the early 90s and early 2000s, when the speed of information was irrelevant across our world. Now, with High Frequency Trading, location becomes important again.

And that's the other reason I can think of for a given location to be relevant: travel time. And for 400 T-years, the MBS has been the best location to get all of the financial trades done, for the same reason that it has been the best for freight traffic.

So the question is whether there was a pre-existing financial centre that Manticore had to and has been competing with since the discovery of the Junction. That's probably Old Earth, given the massive population that existed there and being the capital of the League. But it might not, if the Final Wars wrecked the Sol System economy sufficiently that by the time the League was formed, the financial system was elsewhere. So long as that other system wasn't Sigma Draconis, then the MBS has probably been gnawing at the prominence of whatever system that was.

And like New York before it, all travel is not equal. There was much more traffic in the North Atlantic, either by boat or by plane, or electronically via telegraphs and telephone, than anywhere else in the world. And so I think penny is right that conducting trades in the MBS gives traders first mover advantage (and time is money), so the financial centre of the HV should have moved there over those 400 T-years.

And if the financial centre prior to the MWHJ was Beowulf because the Republic of Beowulf's economy was in such a better state when George Benton launched his expedition to save the Sol System from itself, then there's absolutely no doubt that the HV financial centre is now the MWHJ itself, with access to all (now) 7 systems within the hour. Even more so with the Hermes Buoy system running.
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Re: Insanity: Screening elements in the HV
Post by tlb   » Fri Dec 13, 2024 2:17 pm

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tlb wrote:Do we really know as true that Manticore houses the biggest financial center in the galaxy? It is true the the Manticore wormhole junction spans a large amount of the periphery of the Solarian League. But only the link to Beowulf actually penetrates into the heart of the SL (which is where the greatest amount of financial activity takes place), so why wouldn't the financial center of the SL be in the Sol System - the center of the League government?

It certainly would have been in Sol before Manticore hit its stride and the Core Worlds of the League (except for those closest to Beowulf) are not connected to Manticore, which mainly dominates trade outside the Core.
ThinksMarkedly wrote:I think it might.

One reason a financial centre is relevant is that its self-perpetuating critical mass: that's where most of the trade had happened, so traders have set up their branches or head offices there, which means that's where they will conduct their trades. That's New York today and this was the main reason it remained the biggest financial centre through the early 90s and early 2000s, when the speed of information was irrelevant across our world. Now, with High Frequency Trading, location becomes important again.

And that's the other reason I can think of for a given location to be relevant: travel time. And for 400 T-years, the MBS has been the best location to get all of the financial trades done, for the same reason that it has been the best for freight traffic.

So the question is whether there was a pre-existing financial centre that Manticore had to and has been competing with since the discovery of the Junction. That's probably Old Earth, given the massive population that existed there and being the capital of the League. But it might not, if the Final Wars wrecked the Sol System economy sufficiently that by the time the League was formed, the financial system was elsewhere. So long as that other system wasn't Sigma Draconis, then the MBS has probably been gnawing at the prominence of whatever system that was.

And like New York before it, all travel is not equal. There was much more traffic in the North Atlantic, either by boat or by plane, or electronically via telegraphs and telephone, than anywhere else in the world. And so I think penny is right that conducting trades in the MBS gives traders first mover advantage (and time is money), so the financial centre of the HV should have moved there over those 400 T-years.

And if the financial centre prior to the MWHJ was Beowulf because the Republic of Beowulf's economy was in such a better state when George Benton launched his expedition to save the Sol System from itself, then there's absolutely no doubt that the HV financial centre is now the MWHJ itself, with access to all (now) 7 systems within the hour. Even more so with the Hermes Buoy system running.

It is precisely because of the so-called trade advantage that I question this point. We know from the author that the Core Worlds of the League are massively wealthy and the Manticore Wormhole Junction offers zero trade advantage for transactions between the Core Worlds.

I think you are going too far back to say that the financial center would move from Beowulf (during the Final Wars) to Manticore, because the Solarian League was already massive at time the junction was first found. So no matter where the center might have been immediately after the Final Wars, it would still have moved to Sol (based on the financial power of the Core Worlds) as the League grew in power.

You may be correct that there is now financial power in the Grand Alliance and that will increase what financial resources Manticore already has. But Sol is still the center of the Core Worlds and their financial power might still be orders of magnitude greater (we just pay less attention to it because it has not been germane to the stories).

From Ashes of Victory:
Chapter 9 wrote:The League was the biggest, wealthiest, most powerful political unit in the history of humankind. It had its own internal problems and divisions, and its central government was weak by Havenite or Manticoran standards, but it was enormous, self-confident, and almost completely insulated, as a whole, from events in Pierre's neck of the galaxy. Specific components of the League, like merchants, arms makers, shipping lines, and investment firms, might have interests there; for the Solly man on the street, the entire sector lay somewhere on the rim of the universe. He felt no personal concern over events there, and his ignorance about the sector and its history was all but total.


From War of Honor:
Chapter 34 wrote:The Solarian League was the largest, most powerful, wealthiest political entity in human history. On a per capita basis, the Star Kingdom's economy was actually somewhat stronger, but in absolute terms Manticore's entire gross domestic product would disappear with scarcely a ripple into the League's economy.
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Re: Insanity: Screening elements in the HV
Post by Jonathan_S   » Fri Dec 13, 2024 6:08 pm

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tlb wrote:
penny wrote:The MBS = Wall Street

Do we really know as true that Manticore houses the biggest financial center in the galaxy? It is true that the Manticore wormhole junction spans a large amount of the periphery of the Solarian League. But only the link to Beowulf actually penetrates into the heart of the SL (which is where the greatest amount of financial activity takes place), so why wouldn't the financial center of the SL be in the Sol System - the center of the League government?

It certainly would have been in Sol before Manticore hit its stride and the Core Worlds of the League (except for those closest to Beowulf) are not connected to Manticore, which mainly dominates trade outside the Core.

I can't recall anything in the books about that.

Planets will certainly have their own local stock markets -- but I strongly suspect that the Honorverse has gone back to the pre-telecommunications markets for any interstellar investing. If you want to day trade, or run high frequency trading in a given market you'll have to there (or have a trusted agent there); it's the only way to cut the latency down to something usable.

There's simply no way, even if dispatch boats left every 10 seconds (so completely monopolized all transits through the Junction) to do quick reaction trading (like parts of Wall Street does today) between systems in the Honorverse.



The shortest possibly round trip latency from the closest pair of systems would be Manticore and Beowulf. FTL comms to the Junction (7 minutes), dispatch boat through to Beowulf (at least 10 seconds, but more like 60-120), then another 7 minutes of FTL comms to get to Beowulf. So you're looking at more than half an hour for someone on Beowulf to see a stock moved, issue a buy (or sell) order, and that order to return to Manticore and get executed. And that's the very, very, fastest lag possible.

Manticore and Sol would be more like 14-15 days round trip by dispatch boat. At that point, from that time delay remove, you can only really trade on fundamentals because by the time you hear and can react the market has long, long, finished moving. So if you want to ability to react then you trade in just your local planet's market, you move to the market you care about trading in, or you have a trusted agent trade in that market for you.


So, no, I don't think there are even hundreds of dispatch boats a day heading through the Junction carrying stock information and orders. The data transmission delays mean the market trades simply can't work like they do now and traders would have had to long ago adapted to that.
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Re: Insanity: Screening elements in the HV
Post by Brigade XO   » Fri Dec 13, 2024 7:28 pm

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Manticore had developed into a financial powerhouse but it is not operating in an analog of Earth in the 21st century with almost global electronic transaction capability between major cities---your looking at more in the frame of late middle of the 19th century and before the advent of telegraph communications and certainly before trans-oceanic telegraph cables.

Why? Because the movement of any data was depending (before trans-oceanic cables and telegraph on land) on horse mounted couriers or mail services on land and shipping on oceans. If you were in London before underwater cables and various European telegraph coverage, you could trade in the London stock market on non-English stocks but you were behind the curve on anything not in London. Oh, you could buy and sell securities issued from anywhere in the world but you bought or sold based on what the LONDON MARKET knowledge of prices were and that could be days to weeks or months behind what was happening in Paris, Berlin, China etc. Or in the US which was a sailing trip across the North Atlantic until steam powered vessels got into the mix. Reuters was a pioneer in moving data across the English Channel using Carrier Pigeons to take very important information across the Channel as well as between various European cities- for breaking news and for at least some customers important financial data.

Depending on Manticorian Law and the rules of the Manticorian Stock Exchange, someone in another star system might be able to buy and sell shares of companies originating in the League (or anywhere else) BUT you are automatically constrained by the age of financial data and "news" that could impact the price of those issues. You might buy a stock for $100 Manticor Credits a share when it was actually trading at the equevenlt of 50 (or 10) Manticore Credits in New Chicago and have lost 90 cr a share when the trade settled on Manticore. The reverse is true so you see why hyper-current (and private knowledge) information is critical.

Manticore has a LOT of money and people who are making more. Just the Junction fees is massive income. But if your buying securities were any news is a few days or weeks (or longer) away from reaching you, you just have to live with the market risks.

Wall Street "derivatives". When you take a financial obligation (like a mortgage loan or a 2nd mortgage loan) and bundle it up with a whole bunch of similar obligations, you can sell an ownership interest in that bundle as an investment to people. What you are selling is SHARING of the repayment over time of the principal and interest ON THE THE DEBT OBLIGATION(S) INVOLVED. Lenders will do this to get back the principal on the loans (having gotten them off their books) to be able to keep lending---[Bank capitalization and loan to equity/captial rations by Federal Government Banking System) So....say 3000 mortgages at an average of $150,000 each and an average interest rate of 7% made by 20 banks in a 6 month period. The packaging organization [doesn't have to be the originating bank and this was being done by 3rd parties) typically pays a serving fee for handing the mortgage payment and applying them agains the loans in bookkeeping plus sending out the appropriate repayment on the investment to the holders of the shares of these packaged loans. One (or two or three) tiny problems- loans can have late payments, get delinquent and the borrower(s) may go bankrupt...."POOF", no repayment of principal and interest. And since this is real estate, various towns, Counties and States have TAXES that are do to them on said properties and if those don't get paid----they foreclose on the property for delinquent taxes and there NOTHING (even if you can identify a particular property) that you could get that had any value as collateral.
Now.... some brite (or perhaps devious) sparks split the packaged loans into segments based on downpayment (and so loan to value) breakdowns of loans so they are not selling one set of shares on the "new" investment instrument but several- of varying degrees of risk (said loan to value of collateral and credit worthiness of original borrowers) and suddenly you have a lot of investment offerings that CAN become essentially worthless because the housing market and also the economy is downturned or crashing. And you as the holder of "derivatives" have exactly nothing that might be sold (like a house) as actual collateral and you loose your investment. Sound like a bad deal? Yup. You create something, sell it and if it becomes worthless the buyer looses.
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Re: Insanity: Screening elements in the HV
Post by tlb   » Fri Dec 13, 2024 8:18 pm

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Brigade XO wrote:Manticore had developed into a financial powerhouse but it is not operating in an analog of Earth in the 21st century with almost global electronic transaction capability between major cities---your looking at more in the frame of late middle of the 19th century and before the advent of telegraph communications and certainly before trans-oceanic telegraph cables.

Why? Because the movement of any data was depending (before trans-oceanic cables and telegraph on land) on horse mounted couriers or mail services on land and shipping on oceans. If you were in London before underwater cables and various European telegraph coverage, you could trade in the London stock market on non-English stocks but you were behind the curve on anything not in London. Oh, you could buy and sell securities issued from anywhere in the world but you bought or sold based on what the LONDON MARKET knowledge of prices were and that could be days to weeks or months behind what was happening in Paris, Berlin, China etc. Or in the US which was a sailing trip across the North Atlantic until steam powered vessels got into the mix. Reuters was a pioneer in moving data across the English Channel using Carrier Pigeons to take very important information across the Channel as well as between various European cities- for breaking news and for at least some customers important financial data.

Depending on Manticorian Law and the rules of the Manticorian Stock Exchange, someone in another star system might be able to buy and sell shares of companies originating in the League (or anywhere else) BUT you are automatically constrained by the age of financial data and "news" that could impact the price of those issues. You might buy a stock for $100 Manticor Credits a share when it was actually trading at the equevenlt of 50 (or 10) Manticore Credits in New Chicago and have lost 90 cr a share when the trade settled on Manticore. The reverse is true so you see why hyper-current (and private knowledge) information is critical.

While I expect that you were right about the rules and procedures governing a financial marketplace in the Honorverse; the question is not whether Manticore was A financial powerhouse. Instead, it is whether it was THE financial powerhouse. The quotes show that Manticore's wealth was insignificant compared to that of the League's Core Worlds; therefore why wouldn't the primary financial market that services the Core Worlds be closer to them?
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Re: Insanity: Screening elements in the HV
Post by Jonathan_S   » Sat Dec 14, 2024 11:08 am

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tlb wrote:While I expect that you were right about the rules and procedures governing a financial marketplace in the Honorverse; the question is not whether Manticore was A financial powerhouse. Instead, it is whether it was THE financial powerhouse. The quotes show that Manticore's wealth was insignificant compared to that of the League's Core Worlds; therefore why wouldn't the primary financial market that services the Core Worlds be closer to them?

I would think the information delays are such that any core world's primary financial market would be its own domestic one. (as Brigade XO pointed out, pre underwater cables the main market for England was London, for France it was Paris, for the Netherlands it was Amsterdam).

Their economy is more than large enough to capitalize their own domestic firms -- and their (large pool of) domestic investors wouldn't want to be trading at a time disadvantage if those domestic companies stocks were instead primarily trading on the MBS market - where investors on Manticore had a couple days lead time. (The only advantage the domestic core investors would have is if local news broke about the local company their buy or sell orders might be riding on the same courier boat that carried that news to Manticore)

Now I could see Manticore becoming the primary financial market for some of the surrounding verge systems. Access to the vastly greater capital, and therefore better chance to attract outside investment, could be well worth subjecting your domestic companies' stock to the vagaries of a market that's days away from you.
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Re: Insanity: Screening elements in the HV
Post by tlb   » Sat Dec 14, 2024 11:49 am

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tlb wrote:While I expect that you were right about the rules and procedures governing a financial marketplace in the Honorverse; the question is not whether Manticore was A financial powerhouse. Instead, it is whether it was THE financial powerhouse. The quotes show that Manticore's wealth was insignificant compared to that of the League's Core Worlds; therefore why wouldn't the primary financial market that services the Core Worlds be closer to them?
Jonathan_S wrote:I would think the information delays are such that any core world's primary financial market would be its own domestic one. (as Brigade XO pointed out, pre underwater cables the main market for England was London, for France it was Paris, for the Netherlands it was Amsterdam).

Their economy is more than large enough to capitalize their own domestic firms -- and their (large pool of) domestic investors wouldn't want to be trading at a time disadvantage if those domestic companies stocks were instead primarily trading on the MBS market - where investors on Manticore had a couple days lead time. (The only advantage the domestic core investors would have is if local news broke about the local company their buy or sell orders might be riding on the same courier boat that carried that news to Manticore)

Now I could see Manticore becoming the primary financial market for some of the surrounding verge systems. Access to the vastly greater capital, and therefore better chance to attract outside investment, could be well worth subjecting your domestic companies' stock to the vagaries of a market that's days away from you.

That is interesting; but why would the Core Worlds each go their own way, when there is a shared economy in the League and there is trade between those worlds? We definitely know there are interstellar companies, so how does that affect the supposed local markets?

Both England and France had colonies in the period before the telegraph, but the primary financial market in each was still in the capitol city of the home country.
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Re: Insanity: Screening elements in the HV
Post by Jonathan_S   » Sat Dec 14, 2024 5:42 pm

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tlb wrote:
tlb wrote:While I expect that you were right about the rules and procedures governing a financial marketplace in the Honorverse; the question is not whether Manticore was A financial powerhouse. Instead, it is whether it was THE financial powerhouse. The quotes show that Manticore's wealth was insignificant compared to that of the League's Core Worlds; therefore why wouldn't the primary financial market that services the Core Worlds be closer to them?
Jonathan_S wrote:I would think the information delays are such that any core world's primary financial market would be its own domestic one. (as Brigade XO pointed out, pre underwater cables the main market for England was London, for France it was Paris, for the Netherlands it was Amsterdam).

Their economy is more than large enough to capitalize their own domestic firms -- and their (large pool of) domestic investors wouldn't want to be trading at a time disadvantage if those domestic companies stocks were instead primarily trading on the MBS market - where investors on Manticore had a couple days lead time. (The only advantage the domestic core investors would have is if local news broke about the local company their buy or sell orders might be riding on the same courier boat that carried that news to Manticore)

Now I could see Manticore becoming the primary financial market for some of the surrounding verge systems. Access to the vastly greater capital, and therefore better chance to attract outside investment, could be well worth subjecting your domestic companies' stock to the vagaries of a market that's days away from you.

That is interesting; but why would the Core Worlds each go their own way, when there is a shared economy in the League and there is trade between those worlds? We definitely know there are interstellar companies, so how does that affect the supposed local markets?

Both England and France had colonies in the period before the telegraph, but the primary financial market in each was still in the capitol city of the home country.
In part their economies aren't so integrated. The books seems to say that while interstellar trade is quite extensive each core world is essentially self-sufficient -- they don't need interstellar trade and it doesn't seem to make up a significant fraction of their economy. So there doesn't seem need to integrate their stock markets.

Also history would have driven their markets apart. Even today the core worlds are weeks or more round-trip apart, but they developed when they were vastly more isolated than that. From the end of the final war until the Warshaski invented the grav detector (and shortly aftewards the sail) which combined finally made hyperspace travel safe enough for commercial use was about 300 years. And for at least another couple hundred years after that (up past the point the Junction was discovered) even the fastest dispatch boat was (IIRC) limited to the Beta bands -- so over 6x slower than the modern Honorverse. So even Core systems would have been months round trip time from each other back then.

Their stock markets would have grown up and evolved in that environment of economic and market isolation; and I don't think the transit times have yet dropped sufficiently to significantly change that situation. Yes that will have changed some; for example I expect that major interstellars are listed on multiple system's exchanges to facilitate the trade of their stock between occupants of each of those systems -- but the linkages between those disparate systems' markets seem like they'd be far more tenuous. And some daughter colonies might be close enough to their parent system that most of their businesses might wish to be traded on said parent's markets (the advantages of access to more capital and liquidity possibly outweighing the disadvantages of having such delayed access to the market where your shares are traded)

And like their economies also would have matured in an era where self-sufficiency was at first required, and even afterwards still quite beneficial. The Core worlds would have had diverse and well established economies centuries before it even became possible to routinely ships goods between the stars -- and being self-sufficient likely resisted losing significant share to foreign imports. (But even a tiny fraction of a Core world's economy is more than large enough to let fortunes be made in interstellar shipping; even while it might remain almost insignificant to the economy as a whole)
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