Announcing a pension-fund boycott could crash its share price before it even happens.
Evidence
Another campaign could involve inviting nominations from all over the world for companies with the worst record of zero-hours contracts or low pay, big carbon footprints or poor working conditions, or those that are in the habit of ‘downsizing’ to boost share prices – and then organising a mass withholding of pension contributions to the pension funds that own shares in those companies. Merely announcing the targeting of a pension fund would be enough to send its shares crashing and to cause an exodus of worried investors from equity funds related to it. — Yanis Varoufakis, Technofeudalism, 762
Categorization
- QUESTION: Is the reflexive expectation effect — markets crashing on announcement alone before any actual withholding — economically plausible or wishful?
- corroborated: 2 independent passages support this claim — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 762
- XREF: connects to: Market beliefs about a fund’s portfolio can be wrong yet still drive fire-sale pricing. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1061
Broader Connections
- Market beliefs about a fund’s portfolio can be wrong yet still drive fire-sale pricing.
#corroborates(0.85) — Donald MacKenzie, An Engine, Not a Camera, 1061