Peter Knight
I am a Professor of American Studies at the University of Manchester. My research is on conspiracy theories, and the stock market in American culture.
Activity
-
Glad you are enjoying it so far, Richard.
-
Glad you are finding our approach interesting, Claudio.
-
Money as a strange form of science fiction -- great way to put it, @tommann !
-
Thanks for joining us, Andy.
-
Buy everything, but buy the orange properties first. If only actual investment was that easy!
-
That's a really interesting question you raise, Edith: what happens if the robo advice all convergences on the same theme? In theory it is based on sensible advice for most people (a diversified portfolio, holding for the long term etc), but I'm wondering what it would mean for the stock market's allocation of resources and discovery of prices if the vast...
-
Although it might be thought a good thing to make stock trading seem ordinary, this is surely a recipe for disaster, making trading little different from gambling apps. Most research shows that the most sensible strategy is a long-term, passive approach with a diversified portfolio.
-
Yes, it does seem that it is far easier for ordinary people to now get investment advice.
-
That's interesting @AlysonKelman ! Some people have suggested that a lot of stock market activity is driven by a sense of risk and sport and danger (often framed in stereotypically masculine language), that some of us just don't feel.
-
That's a useful distinction, @BarbaraDavis. I'm wondering about your use of the term "theory" here. One argument that has been put forward recently (by the sociologist Jens Beckert) is that capitalism in general and the stock market in particular often work not through a set of rational calculations of risk, but by imaginative stories of what possible futures...
-
@DACruz The idea that pleasure is an essential element of gambling is an intriguing one. In theory we would all like near-risk-free speculations (that's often the attraction of an inside tip), but part of the appeal is the excitement, the not knowing.
-
I'm wondering whether your account of the "numbers" game in cities like Chicago suggests that some form of gambling is perennially attractive, ironically among those who have the least resources (but who therefore find attractive the potential of life-changing riches).
-
I think you probably share this view with many people, Marshall. However, market professionals have long argued that speculation is actually a socially useful and necessary service, because it channels money into riskier (but potentially lucrative ventures) and it helps provide a useful form of hedging against uncertainty for ordinary people.
-
That's a great metaphor, Mike!
-
Yes, I wonder whether your view will have changed by the end of the week, Melinda! One distinction that was important in the late nineteenth century was that speculation should be left to professionals who were able to shoulder the risk, and that ordinary people should therefore avoid that kind of individual, risky punt.
-
Interesting, Leny. I wonder where we should draw the line between long-term and short-term?
-
Yes, Sheena, you're definitely right that many more people now have a stake in the stock market because of our pensions, although our involvement is often quite a passive one.
-
I wonder whether attitudes are changing, as more people become invested in the stock market through large pension schemes? In most cases we tend not to think about the investment decisions our pension fund managers make on our behalf, so it feels a long way from active, exciting investment.
-
Thanks for your input, Arijit. Should the research you talk about be into the underlying fundamental value of the company, or the behaviour of its stock market price?
-
Thanks, Michael, that's really good to hear. We find these stories and ideas fascinating, and are keen to share them.
-
Peter Knight replied to [Learner left FutureLearn]
In my study I have a sheet of Conferedate bonds, to the value of hundreds of dollars. Unfortunately they are of course completely worthless. Well, worthless at face value, but they weren't exactly free when I bought them on eBay!
-
The lion is William Jennings Bryan, the leader of the Democrats (and the Populist Party), who was an inspiring speaker (how he could roar!), but ultimately his side in the 1896 election was defeated. The irony is that at the time the Populists were dismissed as ignorant hicks who didn't understand economics, but pretty much everything that they were demanding...
-
Yes, the sugar-coated pill approach! Most people don't feel qualified to talk about money and economics, but we've found that literature, art and history can be a good way in to think about some of the issues.
-
In the 1890s (the time of the gold standard debate in the US, when the Wizard of Oz is set) there was deflation rather than inflation. The farmers and the industrial workers argued that there should be more money in the economy (whether back by silver which was more plentiful in the US than gold, or whether simply by printing more paper notes), because...
-
The US election of 1896 was completely dominated by the question of whether money should be backed by gold or silver (or a combination of both). It seems highly unlikely that Baum's story is *not* about this debate!
-
Yes, Bill -- it's a question of what leveraging ratio is acceptable. In the final week of the course we discuss this problem in relation to the 2008 crash.
-
At one point in the nineteenth century in America, there were over three thousand different banks issuing their own banknotes. Needless to say, it was very hard for people to tell whether any out-of-town notes were counterfeit or not. Some banks would issue guidebooks (called counterfeit detectors) to show shopkeepers the difference between real and fake...
-
What if we discovered vast deposits of gold on the moon (and it was somehow economically viable to ship it back to Earth)? Very handy for the electronics industry, but would there still be a demand for gold in jewellery? And if the world still operated on a gold standard, would it mean that there would be boom times, a crash, or no difference?
-
There is a wonderful short story by the American writer F. Scott Fitzgerald, 'The Diamond as Big as a Ritz'. It provides a fascinating commentary on the problem of whether anything can be truly valuable. If you discovered a diamond as big as the Ritz, would it make you the richest person ever, or someone who owned a big lump of a mineral that now turned out to...
-
This raises an interesting question: have there been more financial and currency crashes since the end of the gold standard? It can sometimes seem that way. But we also need to remember that the gold standard also created enormous problems. At times in the nineteenth century in the US, for example, there wasn't enough gold to allow for an expansion of the...
-
In these corona times, many countries have moved to electronic-only payment. Even in my local market the vendors won't take cash, only contactless.
-
That's intriguing, Stephen. Young children also often prefer tangible cash as a sign of money. I remember my daughter used to ask to change any banknotes she received for Christmas for coins, as they seemed more 'real' to her!
-
Interesting, Henry. Does introducing money fundamentally change the nature of the activity? For example, some countries pay people for donating blood, and others consider that it is a gift. Or what about when some nurseries, in order to reduce the problem, started fining parents for collecting their children late . . . but then more parents picked up their...
-
Interesting question, Leny. The seemingly crazy value of these works of art might start us wondering about the value of everything. If someone is prepared to pay the asking price, is that its value -- nothing more to be said? Or do we think that sometimes there is a gap between the value of something and its price? And if so, how do we explain that?
-
You might be interested in the work of the American artist JSG Boggs. He made painstakingly detailed drawings of dollar bills, that he would then try and exchange for goods and services (e.g. a restaurant meal). He insisted that the value of the drawing was its value as a work of art, rather than the literal face value of the bank note he was copying.
-
Yes, Amelia -- in the current pandemic, suddenly the meaning of work and money have become very different. What does it mean when a government steps in and provides a replacement income for lots of its citizens, as is happening in some countries? And what does it mean in places where that is not happening?
-
The idea of money as a way of displaying the relative status of individuals is very interesting. It suggests that it's not really about the nuts and bolts of what money does, but its symbolic value.
-
Yes, all very plausible, and this is what we're usually taught. But what if the sequence is the other way round: we acquire the goods and services first (i.e. we go into debt), and money is created as a record of that debt, that we then have to generate something to wipe off the slate? And how does money assign a known value to particular trades?
-
Do you think about any of your "pots" of money differently -- do you they have different emotional meanings for you? For example, if you received an inheritance from a beloved relative who would want you to spend the money in a particular way, would you keep it separately and think of it differently? Or would it all go in the same bank account and just be...
-
As an archaeologist, you might like one of our favourite examples of money: the rai stones of Yap Island in the Pacific. It really makes you think differently about how money works. Some more information here: https://en.wikipedia.org/wiki/Rai_stones
-
The (fictional) story of the origin of money that economists often return to is Robinson Crusoe. But anthropologists have shown that what came first was not barter (and the invention of money to make the exchange of goods easier) but debt.
-
Yes, money as debt -- that's a really significant idea we'll be exploring more in the course.
-
Peter Knight replied to Andrea A
And in the near future, spending and saving might begin to converge anyway. If we enter a phase of negative interest rates (not that unlikely), in effect we are going to be paying the banks to save money with them.
-
Peter Knight replied to John Cosgrave
Yes, that's a good suggestion -- we'll add it in next time the course runs.
-
Peter Knight replied to James Gerrard
Glad you found it useful, James.
-
Peter Knight replied to Valerie R
Thanks, Valerie, for these kind words.
-
Peter Knight made a comment
And thanks, everyone, for your participation!
-
Peter Knight replied to Silvia Incerti
Glad that you enjoyed it, Silvia. And yes, freely available online education during a global pandemic makes a lot of sense.
-
Peter Knight replied to Ann Jones
You're welcome, Ann.
-
Peter Knight replied to Sam Rapley
Our pleasure, Sam.
-
Peter Knight replied to Ketevan D
Thanks for taking the course, Ketevan.
-
Peter Knight replied to Andrew D
A very important point, Andrew.
-
Peter Knight replied to Nad T.
That's good to hear, Nadine.
-
Peter Knight replied to John Cope
And thanks for your involvement, John.
-
Peter Knight replied to Mary S
Many thanks for your contributions, Mary -- they've been really thought-provoking (for some reason, I seemed to be on duty on the days that you posted). Sorry that we weren't able to offer better financial advice. Then again, if we really knew how to make a killing, I suspect we'd be living a life of luxury on a private island, rather than teaching courses on...
-
We have a regular 5-a-side game on a Monday afternoon, but mainly with people from within English and American Studies. We once decided to enter the university-wide staff 5-a-side tournament, and we were doing reasonably OK (given that most of us are not so young!), when we came up against the team from Security. Definitely no quarter given there. We've never...
-
Peter Knight replied to Juha Peltoniemi
Thanks for participating, Juha.
-
Peter Knight replied to Cynthia Aninwezi
Glad you enjoyed it, Cynthia.
-
Peter Knight replied to Roberto Petrazzuolo
Thanks for your contributions, Roberto -- you've zipped through the course very quickly!
-
Glad to hear you liked reading the historical information, Gus.
-
Good to hear that the course didn't suddenly entice you to bet everything on the market in the middle of the current crisis!
-
James Surowiecki's book The Wisdom of Crowds is very good on this argument.
-
Peter Knight replied to Barbara Musgrave
Yes, I think you're right.
-
Peter Knight replied to Nad T.
Jesse Livermore and Ralph Nelson Elliott, for example, are still in print and regarded as "classics", even if there is not much evidence of their systems/approaches working.
-
You raise an interesting question here: is it possible to analyse "all the information available"? Especially in the digital age, when it seems that there is a veritable flood of information. So, does that mean that we always have a take a leap of faith, because we can never master all the available information?
-
Interesting list, Anugya. It's worth taking a look at Helaine Olen's Pound Foolish, that argues that most of the recent financial advice books are dangerously wrong.
-
One of the current debates is whether financial advisors should have a fiduciary responsibility to their clients (i.e. a legal obligation to provide advice that is in the client's best interests), or whether they can provide advice that is merely plausible-enough (with the possibility that the advisor is recommending products that make more commission money...
-
Glad to hear you are enjoying it, John (and yes, it was a lot of work putting it together, but fun). I'm not sure why the videos are not downloadable -- I'll see if I can find out.
-
Yes, we're all having to reassess what we thought we knew about money and economics in this pandemic.
-
Thats nice to hear, Maddy.
-
Glad to hear you've enjoyed it, Aidan.
-
Happy that we were able to enlighten you on this point, at least!
-
Once you start trying to decode the story, there's no stopping. The tornado as the depression of the 1890s is a good call. But there are interpretations, e.g. that it refers to a story told by Helena Blavatsky: http://www.architecturerevived.com/symbolism-of-the-tornado-in-the-wizard-of-oz/
-
Yes, I think that's right, Evelyn.
-
Ah, interesting that it's cars in Spain. In cities or out on the open road (like all car ads, they sell a dream of freedom that doesn't connect to the reality of spending most time stuck in traffic).
-
As much as I love the euro, I do miss the old French franc notes -- they seemed so exotic and elaborate when I went on exchange trips to France in the 1970s.
-
Thanks, Karien -- I didn't know about these.
-
Thanks, Osman, for sharing your experience.
-
Lots of commentators have argued that humans have a "natural" (or genetic, in your term) love of gold. It's funny, I've never really felt that myself, and so I'm just not convinced by this argument. (There are other reasons, though, why gold has long fascinated humans, and there are also practical reasons why it is preferable to other precious metals.)
-
Yes, the closing of the gold window (and leaving currencies to float freely against one another) is one of the most significant events in recent financial history, and one whose symbolic resonances we are still coming to terms with.
-
Thanks for this story, John.
-
Both interesting choices. The contradictory attitudes towards money in hip hop are fascinating. The work Eithne Quinn, of a colleague at Manchester, is very good on gangs rap and its fascination with wealth.
-
Yes, the musical captures the conflict between Hamilton's vision of a modern American economy powered by banks and industrial growth and Jefferson's hope that American would remain an agrarian society.
-
A friend of mine has just constructed a home-made version of those machines out of lego with his daughter during the lockdown!
-
Yes, Wael, this is a really evocative image.
-
And central banks around the world are now engaging in quantitative easing at an even greater rate than in 2008.
-
Thanks, Siddhi -- an interesting perspective.
-
Peter Knight replied to Alfonso Robles
Welcome, Alfonso -- it will be interesting to see what you make of it with your specialist knowledge.
-
Peter Knight replied to jade s
Hi Jade, welcome to the course. Hope it proves useful.
-
Peter Knight replied to Mary S
Thanks @HelenPaul
-
Thanks!
-
Peter Knight replied to Mary S
Good question -- that's one that Helen will be able to answer. I will give her a prompt!
-
Peter Knight replied to Cynthia Aninwezi
Glad you are enjoying it -- and yes, there's a lot to take on board in one go.
-
Is permanent growth possible or desirable? That's a question that more economists (and climate change activists) are now beginning to ask. John Cassidy provides a very helpful review of the current debate in a recent New Yorker article: https://www.newyorker.com/magazine/2020/02/10/can-we-have-prosperity-without-growth
-
Peter Knight made a comment
Thanks, everyone, for your thoughts on money. I've just been watching the film The Laundromat. The opening scene contains a great two-minute riff on the question: what is money? Here's the trailer: https://www.youtube.com/watch?v=wuBRcfe4bSo
-
Each year the Wall Street Journal runs a competition, pitting its readers' stock-picking skills against randomly thrown darts on a dart board (picking up on Burton Malkiel's comment that blindfolded monkeys throwing darts at the financial pages could do better than investment experts):...
-
I share your suspicions!
-
This is a really interesting question, and one we've been grappling with as we're writing our book on the history of financial advice. Although there was a surprising amount of popular investment manuals in the UK in the late Victorian period, I think you're right in your hunch that this was a particularly American genre. Part of the story has to do with the...
-
Peter Knight replied to Mary S
Yes, bank failures are part of the story of why stock market investment became more popular, but not a particularly important one. There's also the issue of life insurance: in the 19th century, there was a long slow struggle to make life (and other forms of) insurance socially and morally acceptable -- was it right to interfere with the workings of Providence?...
-
I was interested to learn that your own investment advice comes from your bank. I wonder whether people's trust in their banks varies between countries.
