Reddit/Gamestop vs.Wall Street

Vic_08

Thematics wrote: »

On the topic of short selling. I see no problem with it in itself, it adds value to society through price discovery. Over valued companies should be found out. It is best for society when capital is directed to productive and efficient companies.

Ah so this is what the shorting is for; those selfless funds are altruistically providing a price discovery service for the rest of the market, how nice of them.


In a completely unrelated topic anyone know where I can lay a bet on when the first master of the universe laid low by a bunch of redditors takes a nosedive off the roof of their high-rise?

Thematics

Thematics wrote: »

If average Joe spends $800 per Tesla share and Tesla proceeds to go out of business then average Joe loses money. It's important that share prices are scrutinised for fair value. Elon Musk saud hinself that Tesla was overvalues, meaning investors, including the average Joe, are paying too much for Tesla shares. Tesla's P/E ratio is enormous.

In this scenario, if the hedge funds were engaging in a naked short, they would be breaking the law... So it would be pretty indefensible, basically the most rabid capitalism.

riddles

Shorting shares has just become a topic the first significant week of the Biden administration....... strange that. Seems more red square than Reddit.

Thematics

Thematics wrote: »

If a company is breaking the law then obviously it should be sanctioned.

But short selling in itself addd value to society, there is nothing inherently wrong with it.

What value do naked shorts offer? They are also a pretty common practise unfortunately. So basically shorting with stock they don't have access to... Do you think regulations should be enforced against such practises?

LessOutragePlz

Thematics wrote: »

Market efficiency isn't binary. All markets are different, some will be more efficient than others.

Is the market for the GameStop stock operating efficiently in your opinion?

thomas 123

Thematics wrote: »

No those funds are trying to make a profit, that is their mandate and what they are paid to do by their investors. It also happens to be healthy for capital markets.

Do you think companies should try to make losses? Do you have a problem with companies making profits?

Do you have a problem with people making a profit or is that right reserved by the very large company?

tara73

Overheal wrote: »

So guess what, they yanked that link on copyright grounds too - and CNBC's youtube channel just shows the first 3 minutes as before,

Here's a still up link for the full interview where he hands CNBC their lunch https://vimeo.com/505494564 the whole interview is fire, its half an hour long, and if you still see this link working take the time to view it if you're following this thread.

video is gone. Overheal, can you summarise what was said in the interview and why it's gone? thanks a mil.

S.M.B.

tara73 wrote: »

video is gone. Overheal, can you summarise what was said in the interview and why it's gone? thanks a mil.

It's there for me.

grassylawn

Financial services are not productive in the sense that they don't produce a product, but provide a service.

Ideally humans would put more resources (human and material) into things that benefit humanity in a more profound sense. But we just don't really do that in general - it's not something specific to financial services. In this part of the world it gets singled out for this though because financial services in London tends to draw in a lot of high achieving people with strong math skills who should be all doing research in physics or something.

My understanding is that our basic economic model of looking for perpetual growth needs to change urgently. Perpetual economic growth is linked to perpetual increases in consumption and pollution and therefore is basically leading to our doom. I'm not sure how much financial services is a part of that.

grassylawn

Thematics wrote: »

How do you think companies would exist without financial services?

Dunno what you took from my post. Every day I look on this it seems like people respond more to things they imagine I said than what I've said.

But anyway, anyone can start a company. PLCs are what you probably mean.

amacca

grassylawn wrote: »

My understanding is that our basic economic model of looking for perpetual growth needs to change urgently. Perpetual economic growth is linked to perpetual increases in consumption and pollution and therefore is basically leading to our doom. I'm not sure how much financial services is a part of that.

I always thought the economic growth mantra was unsustainable/crazy

How do you keep growing on a planet with limited resources...economic growth works well when you have space to expand into...I suppose it works well in a growth phase but it seems clear without a technological revolution or something like that we will need a new model for peace and prosperity as a species eventually.

WrenBoy

Birds of a feather and all that... :rolleyes::rolleyes:
"Google salvaged Robinhood’s one-star rating by deleting nearly 100,000 negative reviews"

https://www.theverge.com/2021/1/28/22255245/google-deleting-bad-robinhood-reviews-play-store

rapul

WrenBoy wrote: »

Birds of a feather and all that... :rolleyes::rolleyes:
"Google salvaged Robinhood’s one-star rating by deleting nearly 100,000 negative reviews"

https://www.theverge.com/2021/1/28/22255245/google-deleting-bad-robinhood-reviews-play-store

Absolute bolox. None of what has happened should be allowed happen.

is_that_so

WrenBoy wrote: »

Birds of a feather and all that... :rolleyes::rolleyes:
"Google salvaged Robinhood’s one-star rating by deleting nearly 100,000 negative reviews"

https://www.theverge.com/2021/1/28/22255245/google-deleting-bad-robinhood-reviews-play-store

There are reviews and there's just plain bitchin'! The app is not to blame for this.

WrenBoy

is_that_so wrote: »

There are reviews and there's just plain bitchin'! The app is not to blame for this.

What ?? They stopped people buying GME, only letting them sell because of the performance of the stock leading to a massive drop with multiple claims of market manipulation going their way.

Wanderer78

Thematics wrote: »

How do you think companies would exist without financial services?

the financial sector has effectively become parasitic and predatory, it not longer truly benefits society as a whole, it is now undermining our most critical of needs, including the needs of those it benefits financially, it has become potentially the most dangerous sector we now have

Wanderer78

Thematics wrote: »

Growth comes from improved efficiency and technology, not just from expanding.

...and id completely agree with economist kate raworth, anything that grows indefinitely in nature, generally is parasitic, such as cancer

Wanderer78

Thematics wrote: »

Do you haven an specific examples? In what way is it undermining critical needs?

The financial sevices industry provides vital services to the economy.

it is clearly obvious that globally we are becoming more unstable politically, economically, environmentally and socially, all humans, including the wealthy, require elements of stability in these factors, in order to survive, we re currently experiencing the opposite.

yes a functioning financial sector is required for all of these needs, but again, we currently dont have that, we have the opposite, it is currently highly dysfunctional, the 08 crash showed this very well, but we decided to do nothing about it, so here we are.....

Wanderer78

Thematics wrote: »

Trees grow indefinitely, trees are good for the Earth.

do they really?

hatrickpatrick

Thematics wrote: »

How do you think companies would exist without financial services?

Financial services should be entirely public and non-profit. There is a massive, massive, massive conflict of interest when those with the power to manipulate how money works and in some cases more or less create it are private actors who do not have the interests of society as a whole as their number one priority.

I've said for years that this should apply to the entire sector. It's f*cking insane, to take one obvious example, that in an increasingly cashless society one has to pay banks for the privilege of accessing one's wages, etc. This kind of power should not be in the hands of those with personal interest at heart, they should be public bodies whose remit is to serve the general population and nothing other than that.

As far as I'm concerned, abolish commercial banking altogether and put the central bank in charge of the whole system, and have them answer to the public as opposed to a tiny cabal of super-rich investors and pension funds. That way, the decisions they make would be accountable to the people and they would be prevented from intentionally f*cking millions of people over so that half a dozen people can add some extra zeroes on to incomes which already run over several lines of zeroes.

Wanderer78

Thematics wrote: »

A lot was done about the financial crash, much more stringent regulatory requirements were introduced for banks to make them more resilient in distressed markets. We saw that pay off during the volatily of the covid pandemic. Banks balance sheets remained strong. One area that was overlooked was the shadow banking sector, this are needs greater regulation. The shadow banking sector also provide valuable services to the economy.

a lot of nothing, virtually nothing has changed here, and this can be clearly seen since 08, again, wealth inequality has rapidly grown since the crash, and the preferred sector to do so is in fact, 'the financial sector'! you d be surprised of the amount of people that dont realise facts such as, the financial sector in fact creates the majority of the money supply in the form of credit, and its main purpose is to continually drive up asset prices, and as previously discussed, of which ownership is heavily skewed.

Faker74

is_that_so wrote: »

There are reviews and there's just plain bitchin'! The app is not to blame for this.

The app technically works yes, but the company removed a function from that app, that is worthy of a poor review.

hatrickpatrick

Thematics wrote: »

A lot was done about the financial crash, much more stringent regulatory requirements were introduced for banks to make them more resilient in distressed markets. We saw that pay off during the volatily of the covid pandemic. Banks balance sheets remained strong. One area that was overlooked was the shadow banking sector, this are needs greater regulation. The shadow banking sector also provide valuable services to the economy.

None of that addresses the central problem though, which is that currency - one of the most fundamental concepts invented by humans to make sense of how to run a civilisation as large as ours - is controlled by private actors with skin in the game, and not by public actors whose sole purpose is to benefit society overall.

As long as that paradigm continues, this entire area will be regarded as a problem by many people.

This paragraph is from Wikipedia:

A stock market crash is often defined as a sharp dip in share prices of stocks listed on the stock exchanges. In parallel with various economic factors, a reason for stock market crashes is also due to panic and investing public's loss of confidence. Often, stock market crashes end speculative economic bubbles.

There have been famous stock market crashes that have ended in the loss of billions of dollars and wealth destruction on a massive scale.

An increasing number of people are involved in the stock market, especially since the social security and retirement plans are being increasingly privatized and linked to stocks and bonds and other elements of the market. There have been a number of famous stock market crashes like the Wall Street Crash of 1929, the stock market crash of 1973–4, the Black Monday of 1987, the Dot-com bubble of 2000, and the Stock Market Crash of 2008.

This is insane. The moving and shaking of numbers on balance sheets which should have no material effect on anything other than their own little bubble (for example, Gamestop shares, which should have no bearing on anything other than the company itself) is llterally now inextricably linked with whether millions of people around the world will be broke in retirement or not. That is not what the stock market was ever intended to be. It has become an entity entirely divorced from its original purpose and has adopted an extremely dangerous role in modern society which should, by all logic of how democratic nations are supposed to operate, be filled by a public, non profit, government agency. Not a casino full of greedy f*ckers like the people in charge of Melvin Capital.

Wanderer78

Thematics wrote: »

Who is intentionally fukcing people over, do you you have an example?

Do you have a problem with people investing their own wealth?

There is merit in considering new banking structures, but you seem to have a strange gripe with banks for performing a service for you. If you hate having your wages in the bank take it up with your employer. They are the ones who transfer your wages to your bank account.

where do you start! monopolisation in its entirety!

this is why im in favor of more democratic banking options such as public bankig

hatrickpatrick

Thematics wrote: »

Who is intentionally fukcing people over, do you you have an example?

Do you have a problem with people investing their own wealth?

There is merit in considering new banking structures, but you seem to have a strange gripe with banks for performing a service for you. If you hate having your wages in the bank take it up with your employer. They are the ones who transfer your wages to your bank account.

I could cite numerous ways in which the private nature of the financial system f*cks ordinary people but in Ireland's case I'll give you the obvious one: Anglo. Private company, private greed, small cabal of rich c*nts. You, me, and everyone else on this thread robbed blind to pay for their mistakes.

That simply should not be possible. Private companies which are not accountable to democratic control should not have anything close to this kind of power. No power should reside beyond the reach of democratic accountability. None.

McFly85

It's been a fascinating few days. I haven't bought any GME but I have been keeping an eye on the price to see how long the story goes.

I'd have to agree with Chamath ultimately - Wallstreet got it wrong and got punished for it. Complaining that the rules aren't fair just because you've lost money is nonsense(although the rules aren't fair, shorting at 140% seems like it shouldn't be allowed to happen in the first place)

Are GameStop being overvalued? Yes, there are a lot of people looking to purely make money off the situation(you could cleary see yesterday afternoon that a lot of people had $450 as their get out price) but I think you could say the same the other way before the squeeze.

Personally, I did enjoy these hedge funds take a hit-something about short selling has always rubbed me the wrong way. At least with a long position you ultimately help the company you've invested in. I think you could only argue that short selling has a value if the profits made are used to invest somewhere else-otherwise it's purely gambling.

hatrickpatrick

Thematics wrote: »

The main purpose of credit is not to drive up asset prices, the purpose of credit is to provide financing. Asset price infaltion is simply a consequence of credit creation, not a purpose.

It should be, but those in charge have corrupted the system to be the exact reverse of what you're talking about, and that's precisely why those people should be the people we vote for and not people who are entirely beyond the reach of you or I in terms of blowback.

Credit is vital for a healthy economy and minimising poverty

And there's absolutely no reason credit couldn't be sourced from a public, non profit entity (hey, ever heard of a central bank) which would cut out any possibility of anyone engaging in shenanigans which couldn't be directly reversed at source once they were discovered.

Wanderer78

Thematics wrote: »

A lot has changed, a cornucopia of new regulations were introduced. Banks are much better capitalised today and that has been vindciated in 2020 thanks to the good work that was done by regulators.

The main purpose of credit is not to drive up asset prices, the purpose of credit is to provide financing. Asset price infaltion is simply a consequence of credit creation, not a purpose.

Credit is vital for a healthy economy and minimising poverty

....again, nothing has truly changed, and this is 'clearly obvious', and the people have had enough, hence election and voting outcomes of late, trump, brexit, and now even the gamestop situation etc etc

reality is, credit is exactly doing that, continually driving up asset prices, and again, this only truly benefits asset owners, which again, ownership is heavily skewed

credit is indeed a critical societal need, but only if it truly benefits all, and is not used to simply indebt all

dhaughton99

WrenBoy wrote: »

Birds of a feather and all that... :rolleyes::rolleyes:
"Google salvaged Robinhood’s one-star rating by deleting nearly 100,000 negative reviews"

https://www.theverge.com/2021/1/28/22255245/google-deleting-bad-robinhood-reviews-play-store

Big tech in collaboration with Wall St? Who da thunk it!

Treppen

I got in and out of GameStop before Christmas... Thought I was bleedin Warren Buffet making €40 :pac: