Reddit/Gamestop vs.Wall Street

Tony EH

AbusesToilets wrote: »

Real behind the curtain moment when officials are voicing concerns over market manipulation. Fine for me but not for thee. The irony of speculators compainging that their short positions were being screwed by people messing with the company's valuation.

You love to see it

So typical of that "free marketeer" crowd. They're grand when the money's rolling and couldn't give a tinkers cuss about who else gets burned. But as soon as it's them on the back foot, they go crying about things needing regulation.

Tony EH

seamus wrote: »

The same way that a bank can give you a 120% mortgage and you're still on the hook for the entire amount; a complete lack of regulation due to politicians being in the pockets of hedge funds.

People's jobs, careers, pensions and savings are directly impacted by what happens with share prices. And now we can see how easily multi-billion-dollar companies manipulate these prices for profit with little or no consequence. It's a big casino for wealthy people and the chips are your average Joe's money.

Short-selling, like currency speculation, should be illegal. It has the power to topple entire economies if used maliciously.

This is the reason why financial sectors absolutely need robust regulations. To stop these gamblers betting on other people's jobs, careers, pensions and savings.

Overheal

GME is back on Robinhood but volume is limited (I think to 5 shares?) and fractional buying is completely off (ie. you have to buy full shares, you can't just put $8 on black)

Invidious

Thematics wrote: »

In my opinion a lot of people who write long rants about the likes banks and hedge funds are expressing underlying subconcious resentment that the world doesn't love them.

I don't know that there's a need for a deep Freudian explanation for this.

Most people are taught that money comes from studying hard at school, getting enough CAO points to qualify for a course that will lead to a Good Job™, then working 40 hours a week in that job until age 65 while also paying off a mortgage.

This is the relatively linear route to modest wealth.

The notion that people can become far more wealthy than that just by sitting at home trading stocks and cryptocurrencies on an app ... well, that generates resentment because it seems unfair. It makes them feel that the global financial system is rigged against them ... even when it really isn't.

It's an enjoyable trip so far. WSB has been my favourite sub for years now even though I've never bought a stock. Do have a good understanding of it all which helps.

completedit

Invidious wrote: »

I don't know that there's a need for a deep Freudian explanation for this.

Most people are taught that money comes from studying hard at school, getting enough CAO points to qualify for a course that will lead to a Good Job™, then working 40 hours a week in that job until age 65 while also paying off a mortgage.

This is the relatively linear route to modest wealth.

The notion that people can become far more wealthy than that just by sitting at home trading stocks and cryptocurrencies on an app ... well, that generates resentment because it seems unfair. It makes them feel that the global financial system is rigged against them ... even when it really isn't.

No, the second system seems fairer. The first system is contingent on being on the inside. Going to the right school, meeting the right people, ****ing over and stepping on others to get to the top. That's the same route that the hedge fund class comes from. They just did it on steroids and had more doors open hence a gatway to enormous inequitable wealth.

The second way is the democratisation of finance, a portal into the world that has so long been occupied by insiders.

*This is my simplistic understanding of the dynamic. Intuitively I know there's more going on.

Donald Trump

Smee_Again wrote: »

Doubt it, if this does then so does a lot of Wall St. gets up the rest of the time and no one is going to open that can of worms.

Fine to do it once you make sure you disclose the relevant facts.


You can't buy up 10% of a penny stock company then send an email telling your subscribers that this stock is going to jump and advising them get in early ..... and then when the money flows in and the stock inevitably jumps, you cash out quickly.

Tony EH

joseywhales wrote: »

What about the employees?

LOL

I'm sure they lose sleep over the "employees" they fuck over every day.

completedit

Deleted User wrote: »

It's an enjoyable trip so far. WSB has been my favourite sub for years now even though I've never bought a stock. Do have a good understanding of it all which helps.

Amazing ride. Must be amazing to feel part of it in a way. I think I grossly underestimate the numbers using Reddit but even I, as a Reddit user, feel a sense of wow my world is in the mainstream hahah.

Donald Trump

Deleted User wrote: »

Its great to watch it play out....i dont claim any expert knowlege in this area


But how can someone bet 140% of the volume of stocks??

Someone doesn't bet 140% of the outstanding stock.


Lots of people bet percentages and then the total adds up to 140%.


It means that 140% of the total outstanding stock will need to be bought. But they don't have to buy and hold. So that volume can come from the same stock being traded multiple times.

Doctor Roast

Tony EH wrote: »

So typical of that "free marketeer" crowd. They're grand when the money's rolling and couldn't give a tinkers cuss about who else gets burned. But as soon as it's them on the back foot, they go crying about things needing regulation.

Chicken tendies for me but not for thee...

Smee_Again

Donald Trump wrote: »

Fine to do it once you make sure you disclose the relevant facts.


You can't buy up 10% of a penny stock company then send an email telling your subscribers that this stock is going to jump and advising them get in early ..... and then when the money flows in and the stock inevitably jumps, you cash out quickly.

Very true, but that's not what's happening here.

First was that investors felt that Gamestop was undervalued, then they figured out the hedge funds were over exposed in their short positions.

This can be backed relatively easily with publicly available information, a pump and dump involved some element of deception.

Donald Trump

Smee_Again wrote: »

Very true, but that's not what's happening here.

First was that investors felt that Gamestop was undervalued, then they figured out the hedge funds were over exposed in their short positions.

This can be backed relatively easily with publicly available information, a pump and dump involved some element of deception.

Well that is for the initial recommendation. We have no idea whether or not there might have been additional actors who jumped into it later on and fanned the flames underneath it to keep momentum going

Giblet

Donald Trump wrote: »

Well that is for the initial recommendation. We have no idea whether or not there might have been additional actors who jumped into it later on and fanned the flames underneath it to keep momentum going

The issue here, is even in WSB, it's widely acknowledged as a junk stock that you will lose on. While there are some who will make money out of this, it's not through deception! I've never heard of this at this scale, a forum the size of a small country choosing to YOLO some stock for laughs.

Lone Stone

i think i have 3 shares i have no idea what im doing threw a grand on this thing etoro

Donald Trump

Giblet wrote: »

The issue here, is even in WSB, it's widely acknowledged as a junk stock that you will lose on. While there are some who will make money out of this, it's not through deception! I've never heard of this at this scale, a forum the size of a small country choosing to YOLO some stock for laughs.

A good friend of mine almost lost a sizeable chunk of her savings last March through Robinhood.


She had been on it for a while and reading or been hearing about Tesla and it was going up and up and up for a few months. She had gone nearly all in on Tesla and had doubled up on the RH margin (@5% ............ and then it fell off a cliff.


She ended up throwing more and more money at margin calls to prevent being from automatically cashed out. She didn't know what she was doing but it was plummeting and she had it in her head that she didn't want to sell them less than she bought them. She was shocked to learn that they were warning her they would cash her out. At one stage, the value of her portfolio was less than the margin borrowed (so that she has lost all of her original money plus more of what she had put in to prop it up).


She was very very lucky that TSLA recovered and she got her money back. It was almost an extremely expensive lesson for her.


Some people are knowledgeable about the risks. But plenty are not.

Donald Trump

Lone Stone wrote: »

i think i have 3 shares i have no idea what im doing threw a grand on this thing etoro

What is your exit strategy?

It is a bubble.

Tony EH

Wanderer78 wrote: »

therapy required, i suspect

Well, there's a definite stomach pump required to get rid of all the kool aid. That's for sure. :pac:

Lone Stone

Donald Trump wrote: »

What is your exit strategy?

It is a bubble.

well chancing my arm here, close order and sell when it hits the sky.

WrenBoy

Lone Stone wrote: »

well chancing my arm here, close order and sell when it hits the sky.

Its been up and down and averaged around 320 - 330 all day and you have to wonder what effect the RH shutdown will have on it today.
I really hope RobinHood gets smoked on the back of this too.

KyussB

With the amount of money flowing around, this is no little guy vs the big guys situation - it's hedge funds against hedge funds.

The real story in this isn't the Reddit drama, it's that the finance sector and markets are so disconnected from the real/productive economy, that drama like this makes bigger news than actual events in the real economy.

This type of financial activity contributes zero/negative value to society. We need to seriously expand international taxation of financial transactions, and time/frequency limits for transactions, to begin stamping out this kind of nonsense. Then we need to get some of the gigantic arseloads of central bank money being pumped into the financial sector and asset bubbles, sent into the real economy and into peoples hands, instead.

The finance industry today is parasitical on the real/productive economy, and goes about installing monopolies/cartels and various forms of 'economic rent' throughout economies, buying out politicians to get this done - and is the reason very few of us can afford a home or rent, and have sky-high cost of living.

We need to slash the whole finance sector down to size, and completely end the rent-seeking that's been imposed on the real economy and people. A small finance sector is key to a productive and affordable economy - not a finance sector that's grown so grossly oversized, that it has its fingers dipped in every pie simultaneously, effectively taxing the shit out of us all, with no say in that from any of us, through endless rent seeking.

Wanderer78

Thematics wrote: »

Do you have any specific examples of the rent seeking behaviour? Any particular companies and strategies they deploy?

..again, where do you start, oh i know, take a good look at the fire sectors(finance, insurance and real estate), the overall aim of these industries is to continually drive up asset prices, this is exactly what 'rent seeking' is!

Thematics wrote: »

There's a grest book about the origin of money and how it works, written by Jacob Goldstein. I'd encourage everyone to read it. "Money: The True Story of a Made Up thing".

hope it mentions where the majority of the money supply comes from, i.e. the private sector, in the form of credit?

Melanchthon

Going to be interesting if this turns into real serious politics at the White House.

https://www.politico.com/amp/news/2021/01/01/yellen-made-millions-in-wall-street-speeches-453223?__twitter_impression=true

In the past two years, President-elect Joe Biden’s pick to be Treasury secretary, Janet Yellen, has raked in more than $7.2 million in speaking fees from Wall Street and large corporations including Citi, Goldman Sachs, Google, City National Bank, UBS, Citadel LLC, Barclays, Credit Suisse, Salesforce and more.

Then there is this but it could be just rumours and they may be unrelated.

Jeff Paski is portfolio manager for Citadel
Jen Paski is White House press secretary

aziz

Jeff Paski is portfolio manager for Citadel
Jen Paski is White House press secretary[/QUOTE]

Father and daughter or brother and sister

Wanderer78

Thematics wrote: »

Do you have a problem with hedge funds, mutual funds, or Passive ETFs?

Do you have a problem with credit? Credit is a vital tool of the economy.

yes, the activities within these sectors that blatantly continually fcuk people over, have now become extremely dangerous for all, including for these sectors themselves

again, yes, credit is indeed a critical societal need, but the way it is currently being used, primarily to inflate asset prices, is now dangerous for all, including for the financial institutions that create it

Wanderer78

Thematics wrote: »

In what way are people being fukced over, you seem to habe this chip on your shoulder?

The central banks are inflating asset prices, they are doingnit fornthe good of the economy.

oh ffs! all this stuff is 'clearly obvious'! theres an astonishing amount of research going into this now, confirming what im saying.

its important to remember, the majority of the money supply doesnt come from central banks, it in fact comes from the financial sector itself, in the form of credit, and as others have said, that is a conflict of interest. it is in their favor to continually inflate asset prices, but that doesnt mean all gain in the process, as the majority of asset ownership is heavily skewed

Melanchthon

aziz wrote: »

Jeff Paski is portfolio manager for Citadel
Jen Paski is White House press secretary

Father and daughter or brother and sister[/quote]

It would be brother and sister but I am saying I have literally no idea if that's true, they could just share names like.

This is it

aziz wrote: »

Father and daughter or brother and sister

Good detective work

aziz

Jeff Paski is portfolio manager for Citadel
Jen Paski is White House press secretary[/QUOTE]

Father and daughter

Donald Trump

KyussB wrote: »

The real story in this isn't the Reddit drama, it's that the finance sector and markets are so disconnected from the real/productive economy, that drama like this makes bigger news than actual events in the real economy.

This type of financial activity contributes zero/negative value to society.

I disagree (confining the debate to the current situation).
From a pure markets perspective, this short squeeze is teaching some big-money speculators about that tail risk that they forget about. It's no harm for them to be taught some manners that they can't always be the ones to drive and control the market. Markets do not have to be rational. If you think that they will always be, then you might get a nasty shock when big one that might wipe you out finally does arrive



Would I put my own money into GME? Not a chance. Anyone else who wants to take a risk is entitled to do so. 1000 Euro today could be 1000 tomorrow ....... or it could be back down to 30. It will go back down. The poor eejits left holding it at that time are going to get majorly burned. That point will be reached at the time that nobody wants to take the risk of holding the can any more. That could be in 5 minutes, in 5 hours or in 5 days (maybe even weeks).