The Great Divergence

[Zenda]

But this is silly. It's like saying that heart attacks don't kill people, only lack of oxygen to the brain does.

It's more like saying that eating lots of fat food doesn't kill people, but heart attacks do. Knowing there is a relation doesn't mean I should give up all fat food. Some degree of income spread is beneficial to our economies and consumers (someone has to make those cheap reeboks, not?). At what point is the divergence too large? When does it become a problem?

But, no matter. I didn't state the growing divergence is a problem, regardless how obvious it may seem to you, and I don't care to discuss it.

Starting up the process with "no capital" involves shorting, and shorting involves credit - a type of capital.

Credit is not a 'phantom' type, you say?

Arbitrage is not about selling something *later*, nor did I ever say it was.

True, but you made a more general remark that didn't exclude selling at a later time. Just making that clear.

Arbitrage is about taking a gap between a known buying and selling price, and making a profit from closing it.

Yes, the profit is made by making the gap between market prices smaller. The actual buying and selling of the underlying goods (whatever they are) is only a technicality (if it even really happens).

Anyway, this is as much as I will say on the subject, here. Economy is way too boring to spend my free time on