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posted by martyb on Thursday January 28, @04:57AM   Printer-friendly [Skip to comment(s)]
from the ups-and-downs dept.

The Complete Moron’s Guide to GameStop’s Stock Roller Coaster

The Complete Moron’s Guide to GameStop’s Stock Roller Coaster:

Last week, an epic short squeeze had driven GameStop stock up to $40 a share, a roughly 1,500 percent increase from its low point nine months ago. Little did anyone know at the time that this would only be the beginning of the story.

As I write this, GameStop's stock price is hovering around $350, up another 775 percent or so since I wrote about this situation eight days ago. By the time you read this, that number may be horribly outdated, as the stock continues to bounce up and down with extreme volatility hour by hour (it dipped down as low as $61 and peaked as high as $159 on Friday).

The current stock price now gives the company a market cap of about $26 billion.

On the surface, that means the market currently thinks GameStop is worth more than twice as much now (during a potentially existential threat to brick and mortar game sales) as it was during the height of the Wii boom in late 2007, when console game downloads were barely a thing.

Also at: Business Insider.

Melvin Capital, Hedge Fund Targeted by Reddit Board, Closes out of GameStop Short Position

Melvin Capital, hedge fund targeted by Reddit board, closes out of GameStop short position:

Melvin Capital closed out its short position in GameStop on Tuesday afternoon after taking a huge loss, the hedge fund's manager told CNBC's Andrew Ross Sorkin.

GameStop, hedge funds' most-hated stock, was targeted by an army of retail investors who marshaled forces against short sellers in online chat rooms. In the Reddit forum "wallstreetbets" with more than 2 million subscribers, rookie investors encouraged each other to pile into GameStop's shares and call options, creating massive short squeezes in the stock.

CNBC could not confirm the amount of losses Melvin Capital took on the short position. Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its finances. On Wednesday's "Squawk Box," Sorkin said Plotkin told him that speculation about a bankruptcy filing is false.

GameStop shares have soared more than 400% this week alone to $347.51 apiece, driving its January gains to 685%. The stock was worth just $6 four months ago.

Reddit's WallStreetBets is locked as AMC, GameStop stocks fall after-hours

For the past week, Reddit's WallStreetBets community has been the center of an epic war between large Wall Street investors and small scale social media betters. Now, it's been locked, and spooked investors appear to be dumping their shares.

Shares of GameStop and AMC dropped dramatically in after-hours trading shortly after Reddit's community was made only viewable through an invite.

See also: Reddit traders cause Wall Street havoc by buying GameStop
GameStop and Elon Musk send Reddit and Robinhood to the top of the App Store charts
'Dumb Money' Is on GameStop, and It's Beating Wall Street at Its Own Game (archive)


Original Submission #1
Original Submission #2

Related Stories

GameStop Stock Falls Sharply Amid 5M-Share Sales Plan, SEC Investigation 13 comments

GameStop stock falls sharply amid 5M-share sales plan, SEC investigation:

GameStop's quarterly earnings report, released last night, contained relatively good news for the embattled retailer, including a smaller-than-expected operating loss and the company's first year-over-year increase in quarterly revenues in years. But GameStop's heavily inflated stock price is down significantly in morning trading on news that the company plans to sell more shares and the announcement that it is cooperating with a Securities and Exchange Commission investigation into the "meme stock" phenomenon.

In what CEO George Sherman called a "strong start to the year," GameStop's net sales were up over 25 percent to $1.3 billion in the fiscal quarter ending on April 30. That's despite "a roughly 12 percent reduction in the global store fleet due to our strategic de-densification efforts and the continued store closures in Europe during the quarter due to the COVID-19 pandemic."

Previously:
GameStop (The Stock) and GameStop (The Retailer) Continue to be Worlds Apart
GameStop Shares Rise, Fall and Rise Again in Roller-Coaster Day of Trading
The Complete Moron's Guide to GameStop's Stock Roller Coaster


Original Submission

GameStop Shares Rise, Fall and Rise Again in Roller-Coaster Day of Trading 25 comments

GameStop shares rise, fall and rise again in roller-coaster day of trading:

GameStop shares spiked Wednesday, reaching $348 apiece, only to come crashing down to $172 each early in the afternoon, causing multiple halts in trading of the stock due to volatility. Stocks then moved back up and ended the day at $265[*], a 7% increase for the day.

The past two days were a buying frenzy for the video game retailer's stock since Monday, when it was $136. That surge coincided with a lift to the entire stock market after Saturday's passage of the COVID relief bill in the Senate, as well as with an announcement that the video game retailer is developing a new e-commerce strategy, with Chewy.com founder Ryan Cohen heading that effort.

Cohen, who made a large investment in GameStop last year, will lead a committee seeking to transform GameStop a "technology business," the company said in a press release Monday.

GameStop shares skyrocketed from less than $20 in early January to more than $480 at the end of January thanks to a massive push by traders on the Reddit forum r/WallStreetBets. The stock price has dropped dramatically since then.

Price quote on Yahoo!

Also at BBC

Previously:
The Complete Moron's Guide to GameStop's Stock Roller Coaster
Console Options Without Disc Drives Could be GameStop's Final Death Knell
Web Site thinkgeek.com Moving in with Parent Company GameStop
GameStop Heading Towards Possible Doom
GameStop Posts Massive Loss as Pre-Owned Game Sales Plummet
GameStop's Future in Question after Failing to Secure Buyout


Original Submission

GameStop (The Stock) and GameStop (The Retailer) Continue to be Worlds Apart 24 comments

GameStop (the stock) and GameStop (the retailer) continue to be worlds apart:

The last time GameStop announced its quarterly earnings, in early December, the stock market valued the video game retailer at about $1 billion. Following a worse-than-expected earnings report released Tuesday night, the company now has a market cap of just under $10 billion as of Wednesday morning.

Sure, that's down roughly 18 percent from Tuesday's closing price, and off roughly 44 percent from a January peak that saw the stock offering become a poster child for the retail investor-driven "meme stock" phenomenon. Still there's not much in this week's report to suggest that GameStop as a company is worth ten times as much as it was just three months ago, much less the higher valuations it briefly enjoyed in the interim.

[...] Overall, GameStop's latest earnings report shows a company still struggling to turn itself around. For the full fiscal year, the company lost $215 million on net, improving on a net loss of just over $470 million the year prior. Net sales for the year were down over 21 percent, to $5.09 billion, a decline GameStop blamed in part on its "de-densification efforts" (i.e. closing nearly 700 stores). Even taking that move into account, though, sales for comparable stores were down 9.5 percent for the year.

Previously:
GameStop Shares Rise, Fall and Rise Again in Roller-Coaster Day of Trading
The Complete Moron's Guide to GameStop's Stock Roller Coaster
Console Options Without Disc Drives Could be GameStop's Final Death Knell
GameStop Heading Towards Possible Doom
GameStop Posts Massive Loss as Pre-Owned Game Sales Plummet


Original Submission

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(1) 2
  • (Score: 1, Interesting) by Anonymous Coward on Thursday January 28, @05:03AM (15 children)

    by Anonymous Coward on Thursday January 28, @05:03AM (#1105891)

    I don't see a way out for the shorts.

    The stock STILL has 140% of its float shorted. That means the short sellers need to buy 140% of all the shares ever issued in this company. And everyone knows that. The buying pressure on GME is going to be intense. Honestly I just thought about this today but was reading the reddit thing when it was at $60. Loaded up my fidelity account but decided it was gambling and closed it again. Now its at $350, fair enough I missed it. But theoretically I can't see shorts getting out - they need to buy 140% of ALL stocks issues while paying massive interest rates and getting margin called daily.

    • (Score: 0) by Anonymous Coward on Thursday January 28, @05:51AM (2 children)

      by Anonymous Coward on Thursday January 28, @05:51AM (#1105911)

      Do huge hedge funds suffer from "interest rates and getting margin called"?

      I would figure that a huge hedge fund owner would be both a bank and a broker. They would impose that stuff on other people.

      • (Score: 0) by Anonymous Coward on Thursday January 28, @07:29AM

        by Anonymous Coward on Thursday January 28, @07:29AM (#1105939)

        No, the advantage of hedge funds is that they are private and not subject to much of the SEC regulations covering brokers and banks.

      • (Score: 2) by Phoenix666 on Thursday January 28, @02:17PM

        by Phoenix666 (552) Subscriber Badge on Thursday January 28, @02:17PM (#1106071) Journal

        Yes. That is what happened to Long Term Capital Management [wikipedia.org]. The East Asian Financial Crisis of 1997 hit them. They were over-leveraged and got hit with margin calls on both sides. Alan Greenspan had to step in and force the big investment banks to cover LTCM's positions. If he hadn't, the stock market would have collapsed then and there.

        --
        Washington DC delenda est.
    • (Score: 2) by DrkShadow on Thursday January 28, @05:52AM (10 children)

      by DrkShadow (1404) on Thursday January 28, @05:52AM (#1105912)

      Where do you see this number?

      From my reading, we only have information on shorted stocks twice a month, and for this stock the last such information was given out on December 31st. I haven't found anything current on how many shares are shorted.

      • (Score: 2) by Socrastotle on Thursday January 28, @08:49PM (9 children)

        by Socrastotle (13446) on Thursday January 28, @08:49PM (#1106280) Journal

        The numbers are updated in real time. Check out any market numbers site. Marketwatch [marketwatch.com] for instance.

        public float (number of shares excluding restricted shares) = 51.44million
        short interest (number of short sales that need to be covered) = 61.78million

        Currently at 120% of float, shorted - largely because of the overt scumminess happening over the past several hours. You even had Robinhood close people's position (who were trading on margin - so completely legal) at what was literally the lowest rate on the day. It's overt collusion from the app that billed itself as 'democratizing the markets'.

        • (Score: 0) by Anonymous Coward on Friday January 29, @12:08AM (8 children)

          by Anonymous Coward on Friday January 29, @12:08AM (#1106363)

          I'm confused. How do you borrow more shares than the number of shares that exist? Are brokers lending out shares they don't have? If so you would think there would be regulations preventing them from doing this. But then there is the PDT rule and limitations on who can invest through peerstreet. SMH.

          • (Score: 0) by Anonymous Coward on Friday January 29, @12:33AM (1 child)

            by Anonymous Coward on Friday January 29, @12:33AM (#1106375)

            (and I'm not subject to the PDT rule on my main trading account but I have multiple accounts and don't feel like I should have to drop 25 grand another account(s) just to avoid the PDT rule. Regardless the PDT rule discriminates against those with less money).

            • (Score: 0) by Anonymous Coward on Friday January 29, @12:35AM

              by Anonymous Coward on Friday January 29, @12:35AM (#1106377)

              drop 25 grand into other account(s) *

          • (Score: 2) by Socrastotle on Friday January 29, @04:19AM (5 children)

            by Socrastotle (13446) on Friday January 29, @04:19AM (#1106468) Journal

            Yeah. Big money guys get to play by their own rules (and then get crushed by them). It's called naked shorting. And it is prevented by regulations, but as always - regulations don't mean much when the people being regulated and the people regulating them are pretty much one and the same.

            • (Score: 0) by Anonymous Coward on Friday January 29, @06:48AM (4 children)

              by Anonymous Coward on Friday January 29, @06:48AM (#1106501)

              (same poster)

              Anyone can short. I've directly shorted before (naked, ie: I didn't use options to hedge the short but I did have a stop loss but I haven't done it in a long time. I don't like directly shorting) though I don't do it often (if I 'short' I typically play inverse ETFs).

              Typically with shorting professional traders use one of two (three if you count inverse ETFs) strategies to limit risk. You can use a stop loss or you can use options. If you use a stop loss you have a max loss before which you cover. This can be risky as you might incur slippage while executing a stop loss buy order (especially for stocks that aren't very liquid) and you may want to cover before market closes or you may incur large gaps (as market orders don't execute when the market is closed (stop loss orders are a type of market order) and the market is less liquid when closed which can drive the price up more if you are trying to cover (using a limit order) while the market is closed). If you use options you can buy call options (before directly shorting) that you exercise if the price goes up beyond a certain point which limits your losses.

              • (Score: 0) by Anonymous Coward on Friday January 29, @06:56AM

                by Anonymous Coward on Friday January 29, @06:56AM (#1106504)

                (same poster)

                In fact I was trying to play SPXU on the 1/27/2021 around the market (looking at ticker SPY or /ES as a gauge) high of the day (haven't attempted to 'short' in months) as it was so obvious the market was coming down that day. The SPY RSI value never reached oversold conditions (at least not based on how I have it configured) though (the market opened, immediately dipped, and bounced on low volume. I knew the bounce was going to be about where the market opened at, the fact that intra-day the bounce had low volume given other factors told me that buyers were not stepping in and so it's almost like seeing the ocean water receding/the buying activity stopping, you know that the market is going to come back down. It was very obvious).

              • (Score: 0) by Anonymous Coward on Friday January 29, @07:01AM

                by Anonymous Coward on Friday January 29, @07:01AM (#1106505)

                (and when I say same poster I mean the same AC that Socrastotle (13446) is responding to originally).

              • (Score: 2) by Socrastotle on Friday January 29, @08:45AM (1 child)

                by Socrastotle (13446) on Friday January 29, @08:45AM (#1106521) Journal

                It sounds to me like you're mixing puts and shorting. A put is something anybody can do - it's just a plain old derivative letting you sell 'x' shares of something at 'y' date for 'z' price. A short is something very different because you don't actually own or buy anything, you instead *borrow* an asset which you immediately sell and then later repurchase to return it. Shorting involves operating on margin which may be restricted or simply have certain financial requirements depending on your broker. It generally also involves things like your broker being able to close your position for you if the price appreciates beyond what your granted (or deposited - again depending on details) margin can cover.

                Naked shorting is a different game altogether, and one only the big boys can do (and they're not supposed to) that involves skipping that whole annoying borrow step and instead immediately selling stock you don't actually own, and obviously they're operating on infinite margin or there'd be 0 short interest in Gamestop right now.

                • (Score: 0) by Anonymous Coward on Friday January 29, @11:21AM

                  by Anonymous Coward on Friday January 29, @11:21AM (#1106544)

                  I wasn't confusing puts and shorts. When I think of the term 'naked' in trading I think that's it's not covered (ie: selling naked options means potentially infinite losses. Well selling naked puts don't technically carry the potential for infinite losses but you can get some ridiculous losses just like buying puts can yield 1000 percent returns or more if you're lucky enough). IE: infinite potential for loss. Selling covered calls caps your losses. If you short directly and you have a call option in case it goes sideways then I guess that would be considered a covered short? Whereas shorting directly with no options is naked? I guess that's how I interpreted what you said.

    • (Score: 2) by JoeMerchant on Thursday January 28, @06:58PM

      by JoeMerchant (3937) on Thursday January 28, @06:58PM (#1106215)

      I don't see a way out for the shorts.

      Deep pockets and time. Deep pockets always win.

      --
      My karma ran over your dogma.
  • (Score: 5, Touché) by Arik on Thursday January 28, @05:04AM (43 children)

    by Arik (4543) on Thursday January 28, @05:04AM (#1105893) Journal
    And if you buy ANY stock based on what I, an anonymous Grouch Marx wannabe, tells you; well you're a dumbass, and I ain't paying you shit. Got it?

    But this is hilarious story. A bunch of rich, well connected Wall Street jerkoffs got together and shorted gamestop. The way this is supposed to work, the way this "normally" works; is that they buy a bunch of shorts, everyone that notices folds, it sells short, and they now have a few more millions for hookers and blow.

    Instead, a bunch of redit jackasses noticed what they were doing, countered their play (at approximately $500 each, against billionaires) and won the bet.

    Oh noes. All these rich wall street assholes that have been preaching the free market for years suddenly think we need regulation.

    This might be Russian interference!
    --
    If laughter is the best medicine, who are the best doctors?
    • (Score: 4, Interesting) by Anonymous Coward on Thursday January 28, @05:06AM (25 children)

      by Anonymous Coward on Thursday January 28, @05:06AM (#1105894)

      Melvin Capital, Hedge Fund Targeted by Reddit Board, Closes out of GameStop Short Position

      This is lies - there hasn't been enough volume to liquidate their position. Which nicely exposes the "friendly" relationship between The Money and The Media.

      • (Score: 1) by Arik on Thursday January 28, @05:09AM (24 children)

        by Arik (4543) on Thursday January 28, @05:09AM (#1105896) Journal
        Please elaborate.
        --
        If laughter is the best medicine, who are the best doctors?
        • (Score: 0) by Anonymous Coward on Thursday January 28, @05:17AM (21 children)

          by Anonymous Coward on Thursday January 28, @05:17AM (#1105897)

          Short is still at 140% of float. Nobody liquidated shit but News reports short positions are over, it's over, everyone go to bed, excitement over.

          • (Score: 2) by Arik on Thursday January 28, @05:22AM (20 children)

            by Arik (4543) on Thursday January 28, @05:22AM (#1105900) Journal
            Ah. I think I understand.

            Deals not yet closed, still /possible/ rich dicks can unload with less loss.

            Not feeling it but I'm no stock expert.
            --
            If laughter is the best medicine, who are the best doctors?
            • (Score: 1, Interesting) by hemocyanin on Thursday January 28, @05:47AM (19 children)

              by hemocyanin (186) Subscriber Badge on Thursday January 28, @05:47AM (#1105909) Journal

              I'm not expert, not even a mere idiot when it come to understanding shorts, but I get the impression he means the opposite. That they have to somehow buy 140% of the stock that exists, and with that being impossible, the losses will likely be even worse. But maybe I'm reading it wrong.

              • (Score: 2, Interesting) by Anonymous Coward on Thursday January 28, @05:58AM

                by Anonymous Coward on Thursday January 28, @05:58AM (#1105917)

                Actually more interesting is the financial press coming up with BS to try and help the hedge funds. Nobody closed out their shorts. The news reported it presumably to sow FUD on behalf of the hedge funds. Also, the talk of SEC investigations... FUD FUD FUD designed to scare people. I even heard on NPR today that the real losers were the pensioners. Oh noes think of the poor pensioners invested in exclusive hedge funds.

                Why would "The News" say things like that?

              • (Score: 0) by Anonymous Coward on Thursday January 28, @06:10AM

                by Anonymous Coward on Thursday January 28, @06:10AM (#1105920)

                That they have to somehow buy 140% of the stock that exists, and with that being impossible, the losses will likely be even worse.

                No. It's not impossible, and all those who shorted GME can still make a profit.

                Let's say that the short sellers buy back "100%" of the GME stock this week. It doesn't mean that no stock will never be offered for sale again. Those holding the remaining "40%" of GME short positions can buy back their shares from the stocks offered for sale the following week.

                The short sellers will make a profit if their buy-back price is lower than the price at which they sold the stock.

              • (Score: 5, Interesting) by Socrastotle on Thursday January 28, @07:59AM (16 children)

                by Socrastotle (13446) on Thursday January 28, @07:59AM (#1105954) Journal

                No it's all pretty straight forward.

                Shorts are basically the opposite of longs. You buy stock and profit when it goes down. The way this works is you borrow stock from somebody (and pay them interest while holding it). Imagine you borrow a share at $10. You go and immediately sell that share and get $10. Now a couple of weeks later the stock is at $1. You go and buy a share of that stock for $1. You now return the stock you borrowed and you've made a profit of $10 - ($1 + interest). So you basically double your investment as the price of a stock approaches $0.

                But in contrast to going long, there is one huge difference. When you buy a stock your max loss is whatever you spent on that stock, and that's if it goes down to $0. But when you're going short on a stock, your losses are basically infinite. Right now Gamestop is about 1800% higher than where it was before this all began. So they borrowed shares at $20, sold them, and now can only repay them by buying shares that currently cost $350. And it's going to get *worse.*

                The way you get to 140% short interest is by naked shorting, which is in a legally grey area that leans much closer to the black than not. Naked shorting is basically selling stock you don't own and that doesn't exist that you'll buy back later to make everything even again. Obv this is not something you can do, even if you want, as a little guy. But the big money types get to play by their own rules. The big money types were all so convinced that Gamestop was going to crash hard that they started going crazy shorting it it.

                It's not impossible for the shorts to cover their 140%. It just means that they need to buy a share, 'give it away' (so to speak), and repeat - for a total amount equal to 140% of all shares that currently exist. An analog given above is that I promise to sell you 10 cars. Instead I show up with only 6. To complete my promise I now ask you how much you'd be willing to sell 4 of those cars for. I buy them and then give them right back to you again - now I've delivered 10 cars to you and we're even. And so now to cover their shorts they need to start buying up stock like crazy. Yet when they buy that's going to send the stock even *higher* making their losses even worse. We're talking about losses easily running into the tens of billions of dollars.

                There are only two ways Wallstreet doesn't get destroyed here:

                1) The most probable path - corruption. They get the government and/or regulators to create rules/exceptions for them, and/or get the government to bail them out, and so on. But this is a very visible issue and this would be unimaginably horrible optics for the DNC because you can't spin this bailout in any way positive. You're only saving vultures here, and in the process you may well end up screwing over millions of mostly middle class Americans.

                2) If all the current holders start selling like crazy, which could help bring the price back down. This is what they're trying to do by getting the media to run fake news claiming that it's all a bubble, major shorts have exited their positions (which would mean they'd no longer need to buy in the future), etc.. But it was expected because the people buying in this game aren't mom and pops looking for a nest egg, but lots of cynical assholes gleefully cackling at completely legally screwing over our corrupt systems, making a ton of money while doing, and watching the vultures writhe. In other words, the propaganda was expected and isn't going to work.

                • (Score: 3, Insightful) by hemocyanin on Thursday January 28, @08:30AM

                  by hemocyanin (186) Subscriber Badge on Thursday January 28, @08:30AM (#1105959) Journal

                  That was an excellent explanation. But are the people making this happen "cynical assholes gleefully cackling"? Or maybe I'm one, because even though I don't have a nickel in this game, it warms my heart. I kind of feel like these guys are heros.

                • (Score: 4, Informative) by stretch611 on Thursday January 28, @11:43AM (2 children)

                  by stretch611 (6199) Subscriber Badge on Thursday January 28, @11:43AM (#1106012)

                  Actually, there is another way to make money... with stock options. https://www.theoptionsguide.com/stock-option.aspx [theoptionsguide.com]

                  Basically options are a contract/agreement that allow me to buy or sell stock at a certain price up to a certain date.

                  A "call option" allows me the opportunity to buy a stock at a certain price by a certain date. e.g. I can buy a call option contract to buy 100 shares of gamestop at $100 by April 13th. (option contracts are always for multiples of 100 shares) If at any time between now and April 13th, the price goes above $100 I can exercise the option and buy those shares. (and usually immediately sell them as well at the current price) So if the price is $120 and I exercise my option at $100 I make $20/share or $2000 based on 1 option contract of 100 shares. If the price never goes above $100 (or if it does and I do not exercise the option hoping to wait for it to go up more) on April 13th the contract expires and I can no longer buy the stock for $100.

                  It costs money to buy an option contract. The longer the window of time before the contract expires costs more money. increased volatility also increases the cost of options. Also, obviously, options that are currently profitable cost more than options that are currently unprofitable. If you fail to exercise an option and it expires, you lose your entire investment.

                  Put options are similar, but reversed... A put option gives you a contract to sell shares at a specific price and you make money when the stock is worth less than the contracted sell price.

                  Buying options in general is cheaper than buying the stocks themselves... but there is a greater chance to lose all the money you put into them.

                  You can also make money selling option contracts. If you have the shares already in your account these are covered option... If you do not have the shares in your account you sell naked contracts. Naked contracts are quite risky and there is no limit to the amount of money you can lose with them. (e.g. if you sold someone options to buy 100 shares of gamestop at $100, and they exercised ot the day it was $400, you would have to pay $40,000 to buy shares only to get $10,000 from the person you sold the contract to.)

                  Options add more ways to make and lose money in the stock market... but if you barely know the basics of stocks, you are better off staying away from options.

                  --
                  Social Distancing... Please keep your posts at least 6 double spaced lines away from mine.
                  • (Score: 0) by Anonymous Coward on Friday January 29, @12:49AM

                    by Anonymous Coward on Friday January 29, @12:49AM (#1106383)

                    You can also bet on volatility. There is the straddle strategy. I don't do options but it seems relatively straight forward (you can google it. You need a minimum amount of volatility in either direction by a given time for you to make money).

                  • (Score: 0) by Anonymous Coward on Friday January 29, @12:54AM

                    by Anonymous Coward on Friday January 29, @12:54AM (#1106389)

                    What's even riskier than shorting is selling naked puts or naked calls. One thing you can do, and I've considered doing this, is selling covered calls.

                • (Score: 2, Informative) by Anonymous Coward on Thursday January 28, @11:44AM

                  by Anonymous Coward on Thursday January 28, @11:44AM (#1106013)

                  this would be unimaginably horrible optics for the DNC because you can't spin this bailout in any way positive. You're only saving vultures here

                  • The American people already hate both parties for bailing out Wall Street in 2008 and 2009. So yeah, I expect them to bail out their Wall Street buddies again on the backs of taxpayers, and then act indignant when the next Trump comes to power. Not that Trump improved anything related to Wall Street, but voters flocked to an outsider because they were angry at DC insiders.
                  • You've just insulted vultures. Wall Street is a swamp full of leaches.
                • (Score: 2, Informative) by khallow on Thursday January 28, @12:31PM (2 children)

                  by khallow (3766) Subscriber Badge on Thursday January 28, @12:31PM (#1106032) Journal

                  The way this works is you borrow stock from somebody

                  Actually, not even that. You're simply selling stock you don't have. As long as the resulting liability isn't near your real assets, no one will call you on it.

                  • (Score: 2) by shortscreen on Thursday January 28, @06:16PM (1 child)

                    by shortscreen (2252) Subscriber Badge on Thursday January 28, @06:16PM (#1106192) Journal

                    GP explained naked shorts though. I suspect you didn't read the entire post.

                    • (Score: 2, Informative) by khallow on Thursday January 28, @11:32PM

                      by khallow (3766) Subscriber Badge on Thursday January 28, @11:32PM (#1106349) Journal
                      Yea, when someone starts with something like that, I tend to ignore the rest. I'm glad I'm wrong here.
                • (Score: 0) by Anonymous Coward on Thursday January 28, @03:51PM

                  by Anonymous Coward on Thursday January 28, @03:51PM (#1106113)

                  Corruption. Democrats just swept national elections. Next elections in two years. Many middle class people voted for Trump.

                  So fuck them.

                • (Score: 2) by shortscreen on Thursday January 28, @06:15PM (2 children)

                  by shortscreen (2252) Subscriber Badge on Thursday January 28, @06:15PM (#1106190) Journal

                  It would be easy to put a positive spin on government intervention here.

                  future headline: "How Alt-Right Hackers Were Putting Your 401K at Risk"

                  • (Score: 2) by Socrastotle on Thursday January 28, @07:28PM

                    by Socrastotle (13446) on Thursday January 28, @07:28PM (#1106232) Journal

                    Yip, for sure - they're 100% going to try to do a divide and conquer type thing. I'm betting it'll be blamed on either Trump or Russia, somehow.

                    The problem, and one I think they realize, is that this sort of propaganda could backfire in a very epic way. You have people from all walks of life, all ideologies, and just about everything involved in this. If people don't eat up the propaganda, it's likely to unite them in disgust against the media and politicians that'll be spreading the propaganda. Imagine the emergence of a successful anti-party running solely and entirely on a policy of anti-war and anti-corruption. Stranger things have happened!

                  • (Score: 0) by Anonymous Coward on Friday January 29, @10:15AM

                    by Anonymous Coward on Friday January 29, @10:15AM (#1106530)

                    It would be easy to put a positive spin on government intervention here.

                    future headline: "How Alt-Right Hackers Were Putting Your 401K at Risk"

                    Except, not really, you have Ted Cruz agree with AOC on the side of Reddit

                    https://twitter.com/tedcruz/status/1354833603943931905 [twitter.com]

                • (Score: 0) by Anonymous Coward on Friday January 29, @12:42AM (3 children)

                  by Anonymous Coward on Friday January 29, @12:42AM (#1106380)

                  So I mostly understood everything you said (maybe years(?) ago) but I'm still confused. It still sounds like brokers / hedge funds are lending out more shares than they actually have. I don't understand how that can be legal.

                  • (Score: 0) by Anonymous Coward on Friday January 29, @02:01AM

                    by Anonymous Coward on Friday January 29, @02:01AM (#1106426)

                    (and/or selling more shares than they have which sounds like it should be illegal).

                  • (Score: 2) by Socrastotle on Friday January 29, @05:33AM

                    by Socrastotle (13446) on Friday January 29, @05:33AM (#1106484) Journal

                    It's not. It's called naked shorting. Now go report it to regulators who happen to be directly tied to the exact people doing said naked shorting.

                    The masks are coming off right now. Any and all politicians who care at all about the little guy should be coming out seriously in favor of them right now. Everything the Redditors did was undoubtedly completely and 100% legal. Wallstreet put themselves into a corner with illegal (or at least prohibited by regulation) activity, and is now trying to crawl out of it with even more illegal activity including widespread collusion and efforts to manipulate the market in illegal ways.

                    So far exactly two political figures (that I am aware of) have come out in support of the people. Ted Cruz and AOC.

                  • (Score: 0) by Anonymous Coward on Saturday January 30, @12:28PM

                    by Anonymous Coward on Saturday January 30, @12:28PM (#1106859)

                    The brokers write options on their customer's shares (and even the relatively small brokerages have billions of dollars worth of assets at their disposal), which actually belong to them, these options are all for different date ranges, so they do some accounting magic and everything somehow adds up. Sometimes companies sell options on their own stock, and private individuals can write options on their own holdings as well (you have to be pretty well off to qualify to do this though). The options contracts themselves can be resold too.

        • (Score: 1, Interesting) by Anonymous Coward on Friday January 29, @01:53AM (1 child)

          by Anonymous Coward on Friday January 29, @01:53AM (#1106421)

          Basically another hedge fund came in to 'save the day'.

          They bought out Melvin at some %. Melvin claims 'closed position'. They are playing a bit fast and lose with the term 'closed'.

          That same hedge fund just happens to be the same one most brokerages use to clear things at '0 dollars'. They also announce 'no buy longs only sell'.

          That savior hedge fund makes bank. Everyone else shits the bed Melvin does not lose everything just a lot.

          Now the rub is will another hedge fund step and and screw over the 'savior fund'. As the 'savior fund' has a *lot* more capital at its disposal. They have locked out the 'little guy' but greed knows no bounds.

          • (Score: 0) by Anonymous Coward on Friday January 29, @02:15AM

            by Anonymous Coward on Friday January 29, @02:15AM (#1106433)

            Supposedly they kept shorting even after they got bailed out ...

    • (Score: 5, Interesting) by Socrastotle on Thursday January 28, @05:47AM (4 children)

      by Socrastotle (13446) on Thursday January 28, @05:47AM (#1105910) Journal

      Just to be clear. This was something more specific than an arbitrary pump to screw the shorts. Somebody noticed that Wallstreet had gotten particularly greedy with Gamestop. More than 140% of their outstanding shares, due to the legally dubious magic of naked shorting, had been shorted.

      And for those that don't know what short selling is. There are several forms of it, but the gist is this. I *borrow* a stock from Joe for some fee. That stock is currently worth $10. I go immediately sell the stock. A couple of months later the stock is at $1. I buy the stock for $1. I return that stock to Joe. I've now made $9 minus the fee/interest I paid to borrow it. So you make money when the stock drops. But the catch is that when the stock goes up, your losses are potentially infinite. When the stock hits $20, I've lost 100% of what I invested. When the stock hits $110 I've lost 1000% of what I invested. And there is no max.

      So somebody noticed that more shares of Gamestop had been shorted than existed. They told some people and everybody started buying up the stock. That stock has now gone up like 1000% in price. The short-sellers now need to not only buy some stock, but buy 140% of the total number of outstanding shares in order to cover their shorts. A good analog given in the WallStreetBets subreddit was this: Imagine I sold you 10 cars. But then I only show up with 6. And then I ask you how much to buy 4 of those cars from you, so I can finish my delivery? And so when the shorts look to buy the stock to cover their shorts, it's going to go skyrocketing dramatically higher. And then once the stock is in lala land, the guys who went long on it can finally sell (if they so see fit) and make an absurdly large amount of money on it.

      Basically these guys just fucked over Wallstreet, using their own means and methods, a million times harder than Occupy Wallstreet, or any other protest against wealth inequality ever could have. And Wallstreet is freaking out. Because if they can't get some corruption going for them, this is going to bankrupt hedge funds and other big money types left and right.

      • (Score: 0) by Anonymous Coward on Thursday January 28, @07:57AM

        by Anonymous Coward on Thursday January 28, @07:57AM (#1105951)

        Now let's see WSB vs Legatus:
        https://gawker.com/5050016/how-legatus-brought-down-wall-street [gawker.com]

      • (Score: 0) by Anonymous Coward on Thursday January 28, @01:19PM

        by Anonymous Coward on Thursday January 28, @01:19PM (#1106051)

        Correct.

        A retard writes, [medium.com] Speccy writeup [spectator.us] or covered on YT by Louis Rossmann, here [youtube.com] and here [youtube.com] and here. [youtube.com]

      • (Score: 2) by Phoenix666 on Thursday January 28, @02:26PM (1 child)

        by Phoenix666 (552) Subscriber Badge on Thursday January 28, @02:26PM (#1106073) Journal

        Basically these guys just fucked over Wallstreet, using their own means and methods, a million times harder than Occupy Wallstreet, or any other protest against wealth inequality ever could have. And Wallstreet is freaking out. Because if they can't get some corruption going for them, this is going to bankrupt hedge funds and other big money types left and right.

        That's a beautiful thing. But the fix is always in. DC will step right in to bail them out using our tax dollars. What would be especially funny is if China used this moment to stop buying US treasuries in order to double fuck DC.

        --
        Washington DC delenda est.
    • (Score: 2) by c0lo on Thursday January 28, @05:55AM

      by c0lo (156) Subscriber Badge on Thursday January 28, @05:55AM (#1105916) Journal

      The best? Because they shorted over 100% of the total amount of shares, they are bidding against themselves now and 4chanbloombergs wouldn't need to do much - the damage is done already.
      Some of them wallstreets (if not all) will get seriously burned.

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0
    • (Score: 4, Informative) by Grishnakh on Thursday January 28, @06:20AM

      by Grishnakh (2831) on Thursday January 28, @06:20AM (#1105923)

      And if you buy ANY stock based on what I, an anonymous Grouch Marx wannabe, tells you; well you're a dumbass,

      Not necessarily.

      Instead, a bunch of redit jackasses noticed what they were doing, countered their play (at approximately $500 each, against billionaires) and won the bet.

      Exactly! And it's hilarious. $500 is not a lot to bet on something like this. If I buy up $500 of some shitty stock like GameStop, and I end up having to sell it for $250, oh well. That's not going to affect my finances in a significant way. But if an army of people like me all do the same thing, we get what we're seeing with GameStop and these "Wall Street jerkoffs" as you put it. I can afford to lose a few hundred $ on a silly bet. Can they afford to lose, well, an infinite amount of money (since the losses from short selling are potentially infinite)? That one firm has already lost over 12B!

      All these rich wall street assholes that have been preaching the free market for years suddenly think we need regulation.

      Seems to me they need to just ban short selling: it's risky, and the whole strategy seems to be to artificially drive the stock price down. According to Wikipedia, "Research indicates that banning short selling is ineffective and has negative effects on markets. Nevertheless short selling is subject to criticism and periodically faces hostility from society and policymakers." Also, "Short sellers were blamed for the Wall Street Crash of 1929. Regulations governing short selling were implemented in the United States in 1929 and in 1940.[citation needed] Political fallout from the 1929 crash led Congress to enact a law banning short sellers from selling shares during a downtick; this was known as the uptick rule and was in effect until 3 July 2007, when it was removed by the Securities and Exchange Commission."

      It seems simple to me: it either needs to be banned, or curtailed by renewing the regulations that were stupidly removed in 2007. It also appears that this practice is banned in many Europeans nations.

    • (Score: 2) by FatPhil on Thursday January 28, @08:43AM (3 children)

      We have no evidence Melvin shorted $GME, all we know is that last month they had a large position in $GME puts, which are pieces of paper worth pennies, and causing losses of only pennies when margin calls turn them into dust. The SEC only demands that the latter are declared, so actual shorts are pure speculation.

      From what I've seen (I can only read the top 3 comments on any reddit thread), these redditors ain't the smartest cookies in the knife draw.

      For example, they think they're going to nuke JPM here:
      https://www.reddit.com/r/wallstreetbets/comments/l68ill/the_biggest_short_squeeze_in_the_world_slv_silver/
      And it looks like all they've managed to do is buy shares in one miner: https://stocktwits.com/symbol/AG
      The paper silver that they were trying to short squeeze, e.g. https://www.bloomberg.com/quote/ZSIL:SW seem to be down 1% on their attempts to boost its value by a factor of 40.
      And of course, actual silver is also down about 1%: https://www.kitco.com/charts/livesilver.html , so they've not managed to disconnect the paper price and the delivered price.

      They also don't seem to realise that if they were to pump (their money into) silver ETFs, then JPM could just crash the market hard enough most of the WSBers idiotic enough to use leverage (I heard a tale of someone using 125x leverage the other day) would lose everything because of margin calls, and those "smart" enough to not use leverage would be sorely tempted to quit whilst their paper's worth something. Of course, they might view that as a DTFB. Human stupidity is unbounded.

      I wish they weren't so idiotic - my pension is basically being long silver, and I'd happily tranch on the way up. But it ain't going to happen, they don't understand what they're dealing with.

      It seems they may already have given up on that idea, given that they did the wrong thing and it didn't work, and they've set their sites lower - apparently DOGE is going to a dollar! OK, it reached $0.0125, and is now back down to $0.0105, and across all exchanges, there are 0% buyers, and 100% sellers. Well, I call them "sellers", but if there are no buyers, that's not technically accurate. "The ultimate bigger idiots" is probably more accurate.

      They're just banzaing the Risk board before they become irrelevant, and they aren't even making a good job of it. Their only success was one low-hanging *contrarian* fund. They've helped out much of the rest of wall street with their activity. Even those who were vulnerably posistioned now have advance warning they need to rebalance their holdings. And they're *hedge* funds - they're already hedging, they expect losses somewhere, sometimes even 100% losses (as per Citron's announcement).

      For reference, I have several more bullet points why these guys are idiots, but this is long enough already. (spoilers - check who owns Citadel, BlackRock, Ameritrade, etc. - they expect the owners of funds to assist them damaging their own funds.)
      --
      I know I'm God, because every time I pray to him, I find I'm talking to myself.
    • (Score: 0) by Anonymous Coward on Thursday January 28, @03:44PM

      by Anonymous Coward on Thursday January 28, @03:44PM (#1106109)

      It's Trump's fault for sending out those 600$ checks.

    • (Score: 0) by Anonymous Coward on Friday January 29, @12:18AM (4 children)

      by Anonymous Coward on Friday January 29, @12:18AM (#1106366)

      So much of this sounds like it's probably illegal. Pumping and dumping is illegal. It gets done though. I'm in the discord chat stock trading channels and I get spam of people always inviting me to pump and dump channels which sound illegal. I don't join them (I've joined a couple just to see what it's about and clicked through before leaving. They basically buy a stock, go around and hype it up everywhere, and sell. Again, this sounds illegal).

      • (Score: 0) by Anonymous Coward on Friday January 29, @12:23AM

        by Anonymous Coward on Friday January 29, @12:23AM (#1106369)

        Pump and Dump - Wikipedia

        ""Pump and dump" (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" (sell) their overvalued shares, the price falls and investors lose their money. This is most common with small cap cryptocurrencies[1] and very small corporations, i.e. "microcaps".[2]

        While fraudsters in the past relied on cold calls, the Internet now offers a cheaper and easier way of reaching large numbers of potential investors through spam email, bad data, social media, and false information.[2]"

        https://en.wikipedia.org/wiki/Pump_and_dump [wikipedia.org]

        Notice the word 'fraud'. Sounds illegal.

      • (Score: 2) by Socrastotle on Friday January 29, @04:29AM (2 children)

        by Socrastotle (13446) on Friday January 29, @04:29AM (#1106471) Journal

        Pump and dump is illegal because it's based on fraud. The reason people got excited and pumped up this stock is because it was dramatically over-shorted. The big money guys now need to be about 120% of total floated shares, and they're on a time-line. That is accurate and true information, which makes pumping a stock based on it 100% legal.

        Squeezing the shorts is a strategy as old as shorting itself. The only thing that happened here that was unique is that it was done in a decentralized way with massive numbers of people investing relatively small amounts.

        • (Score: 0) by Anonymous Coward on Friday January 29, @07:06AM (1 child)

          by Anonymous Coward on Friday January 29, @07:06AM (#1106507)

          I still question the legality of this. It's probably in one of those gray areas but I always see people trying to create these pump groups all over and it makes me wonder. I tend to ignore the spamming, I don't participate in any of it, but I get spammed all the time in the discord channels.

          • (Score: 0) by Anonymous Coward on Saturday January 30, @08:57AM

            by Anonymous Coward on Saturday January 30, @08:57AM (#1106843)

            The problem with a disorganized group is you can't assign one motivation to them all. P&Ds are illegal and I'm sure, given the large number of investors, more than a few people involved are fully in the P&D camp. They are screaming for everyone to hold while repeatedly closing and opening positions, they'd have to be with the volume of transactions involved. Providing them cover are the large numbers there to screw with the S&D attempt or various other motivations. The issue here is spotting them, as there is such a large number of people involved, but I'm sure the regulators and lawyers for various funds are going to be looking at the transactions here to spot the usual P&D pattern.

  • (Score: 1, Informative) by Anonymous Coward on Thursday January 28, @05:31AM (14 children)

    by Anonymous Coward on Thursday January 28, @05:31AM (#1105902)

    The trufax complete moron story goes more like this.

    A "fair" price for the stock might be about $40. But some billionaires' kids in charge of hedge funds decided they could send it to 0 by shorting it. To do this they borrow millions shares and sell them at lower and lower prices to drive the price to zero. Once it's zero they return the grand sum of 0 to the owners of the shares and keep whatever they got selling it.

    Typical frat billionaire investor morning play before moving onto blow and hookers.

    • (Score: 1) by hemocyanin on Thursday January 28, @05:40AM (3 children)

      by hemocyanin (186) Subscriber Badge on Thursday January 28, @05:40AM (#1105905) Journal

      Yeah and there are rumblings to make it illegal, or at least hard, for those fat cats to lose money. https://www.nasdaq.com/articles/gamestop-trading-ought-to-be-halted-for-30-days-one-regulator-says-2021-01-27 [nasdaq.com]

      • (Score: 2) by Grishnakh on Thursday January 28, @06:32AM (2 children)

        by Grishnakh (2831) on Thursday January 28, @06:32AM (#1105928)

        It should just be illegal to short stock. It was greatly curtailed after the Great Depression because it was blamed for that event. But that regulation was lifted in 2007.

        • (Score: 2, Insightful) by Anonymous Coward on Thursday January 28, @07:24AM

          by Anonymous Coward on Thursday January 28, @07:24AM (#1105938)

          It should be legal to print $10 trillion into existence and use it to pump the stock market? But not to buy a put contract that gives you the right to sell at a given price?

          Let's just make selling stock illegal.

        • (Score: 2) by FatPhil on Friday January 29, @10:36AM

          But "shorting" stock isn't what's done, nowadays - theoretically.
          You *borrow real stock* to sell, and need to return it after you've bought it back for less later.
          So you never sell anything you don't have.

          Whether the entity that loaned it to you actually had it and had the right to loan it to you is a subtly different question, and one that needs a thorough analysis, and preferably some stricter regulation. I'm 100% sure that stock that's being used as collatoral on other loans is being lent out, for example, and if that isn't pulling yourself up with your own bootstraps, I don't know what is.

          However, Melvin weren't being picked on because they were shorting, as such, they were picked on because they had huge puts on the stock. And there's nothing in any way dodgy or illegal about buying an options contract. Selling one where you can't be sure that you can deliver if the underlying asset on the due date is a subtly different matter, and one that needs a thorough analysis, and preferably some stricter regulation.

          Melvin did nothing wrong.

          A million weaponised stimmy checks in the hands of unsophisticated shitlord gamblers did nothing wrong either, lest the logical-fallacy-tards attempt to conclude the latter from the prior.
          --
          I know I'm God, because every time I pray to him, I find I'm talking to myself.
    • (Score: 3, Informative) by ElizabethGreene on Thursday January 28, @05:53AM (9 children)

      by ElizabethGreene (6748) on Thursday January 28, @05:53AM (#1105914)

      Once it's zero they return the grand sum of 0 to the owners of the shares and keep whatever they got selling it.

      Clarification: You receive compensation if you, as a stock owner, choose to lend your shares out. That's not something usually available to small investors. e.g. with Fidelity you need to have 250k in an account to enroll in share lending. Details [fidelity.com] For securities with significant short interest it's a nontrivial ROI.

      • (Score: 1) by khallow on Thursday January 28, @12:52PM (8 children)

        by khallow (3766) Subscriber Badge on Thursday January 28, @12:52PM (#1106040) Journal
        There's no lending of shares. The short sellers are merely selling shares they don't have.
        • (Score: 3, Informative) by ElizabethGreene on Friday January 29, @03:02AM (7 children)

          by ElizabethGreene (6748) on Friday January 29, @03:02AM (#1106439)

          There's no lending of shares. The short sellers are merely selling shares they don't have.

          You are mistaken. To short shares I ask my broker to borrow them from someone, and I sell the borrowed shares. I pay for the privilege of borrowing them. Normally the cost of this borrowing is a rounding error, 0.2-0.3% annually. When the shares become "hard-to-borrow" like $GME that borrowing cost increases to up to 30%, two orders of magnitude.

          That borrowing cost is what puts the squeeze in short squeeze. <3

          • (Score: 1) by khallow on Friday January 29, @03:57AM (6 children)

            by khallow (3766) Subscriber Badge on Friday January 29, @03:57AM (#1106465) Journal
            It's most likely a naked short in this case, outright selling stock that one doesn't have or borrow. Both because there wasn't enough shares in existence to borrow, and because the stock price briefly hit superexponential, meaning the shorter(s) likely hit something far more solid, a margin call, than merely high interest rates.

            Having said that, I didn't distinguish between a short where stock is borrowed and a naked short where nothing is borrowed. So sorry for introducing noise into this subject.
            • (Score: 0) by Anonymous Coward on Friday January 29, @10:25AM (5 children)

              by Anonymous Coward on Friday January 29, @10:25AM (#1106535)

              It's most likely a naked short in this case, outright selling stock that one doesn't have or borrow.

              That would be 100% illegal since the owners of these fake shares would not be able to vote as the shares don't exist.

              https://www.investopedia.com/terms/n/nakedshorting.asp [investopedia.com]

              • (Score: 1) by khallow on Friday January 29, @12:19PM

                by khallow (3766) Subscriber Badge on Friday January 29, @12:19PM (#1106558) Journal
                Voting issues don't make a practice illegal. Laws make a practice illegal. Here, I see the weaselly phrase "affirmatively determined to exist". That's a huge loophole.

                And given that there were indeed more shorted shares than shares, sounds like things got a bit naked whether or not it was illegal.
              • (Score: 1) by khallow on Friday January 29, @02:58PM (2 children)

                by khallow (3766) Subscriber Badge on Friday January 29, @02:58PM (#1106590) Journal
                Also I think it's safe to assume that things can routinely happen even if they're supposed to be 100% illegal. Laws against naked shorts, insider trading, collusion, fraud, and market manipulation are more to comfort the rubes and erect barriers to entry for small operators, than to actually prevent the activities in question.
                • (Score: 2) by ElizabethGreene on Saturday January 30, @04:24AM (1 child)

                  by ElizabethGreene (6748) on Saturday January 30, @04:24AM (#1106805)

                  You are correct in this. Naked shorting is banned by the SEC, but it does occur. When it happens, it is recorded as "Failing to deliver" the underlying security. Oddly, it doesn't just happen for shorts; sale of a long can also result in a failure to deliver too.

                  The SEC publishes a naughty list with this data here: https://www.sec.gov/data/foiadocsfailsdatahtm [sec.gov]

                  • (Score: 0) by Anonymous Coward on Saturday January 30, @09:03AM

                    by Anonymous Coward on Saturday January 30, @09:03AM (#1106844)

                    You sort of said this, but I wanted to make it clear: FTDs can arise from more than just naked shorting. Almost any stock transaction can have an FTD/FTR result for a multitude of reasons.

              • (Score: 2) by ElizabethGreene on Friday January 29, @03:35PM

                by ElizabethGreene (6748) on Friday January 29, @03:35PM (#1106607)

                Naked shorting refers to shorting without borrowing the underlying. That is illegal. Covered shorting is entirely legal and, since the lender forgoes voting rights, it does not create this issue. <3

  • (Score: -1, Offtopic) by Anonymous Coward on Thursday January 28, @05:33AM (83 children)

    by Anonymous Coward on Thursday January 28, @05:33AM (#1105904)

    Please make your predictions of what you expect the Biden administration to do today, instead of creating some sort of ad-hoc mental gymnastic rationalization that the media will feed you after the fact.

    The corporate media and Wallstreet are both turning to the Biden administration, who they donated a fuck ton to, to save them from the peasants. What do you think will happen?

    And similarly all of this is being sourced from WallStreetBets [reddit.com], a subreddit. Right now Reddit leadership is overtly in support of this. What do you think will be this little subreddit's ultimate fate?

    • (Score: 0, Offtopic) by hemocyanin on Thursday January 28, @05:42AM (1 child)

      by hemocyanin (186) Subscriber Badge on Thursday January 28, @05:42AM (#1105907) Journal

      Federal prosecution. I mean, if they can prosecute a guy over posting memes in 2016, who can't they prosecute?

      https://www.justice.gov/opa/pr/social-media-influencer-charged-election-interference-stemming-voter-disinformation-campaign [justice.gov]

      • (Score: 0) by Anonymous Coward on Thursday January 28, @09:44AM

        by Anonymous Coward on Thursday January 28, @09:44AM (#1105989)

        The actual inside traders?

        https://en.wikipedia.org/wiki/2020_Congressional_insider_trading_scandal [wikipedia.org]

        Or I dunno, the rest of the people escaping prosecution or the consequences for being found guilty? Those people?

        Or the ones whose political opponents were allowed to run the investigations for years without finding prosecutable evidence? Cause I think you wanna say those people.

    • (Score: 0) by Anonymous Coward on Thursday January 28, @05:45AM (3 children)

      by Anonymous Coward on Thursday January 28, @05:45AM (#1105908)

      Careful what you wish for.

      The losers here are almost certainly not regular DNC members. Chances are this will an opportunity to set an example. A warning tale for rich entitled fucks that think they're bigger than the rules. Who may occasionally try to incite free tours of Nancy Pelosi's office. It's time for some bitches to feel the unity with their poor brethren.

      • (Score: 0) by Anonymous Coward on Thursday January 28, @06:07AM (2 children)

        by Anonymous Coward on Thursday January 28, @06:07AM (#1105919)

        Why do you think I wouldn't want to see this? This tribalism is particularly what I'm trying to get people, themselves, to see.

        I completely agree with you that the losers here are obviously not normal DNC members. They're something much more relevant: they're the people who are and who control the DNC, as well as the GOP. The DNC, if they're to keep to their rhetoric, should be cheering this event on. Not only did a whole bunch of middle class types just make a ton of money off of Wallstreet greed, but it's ultimately the story of the little man taking on the bourgeois, playing by the rigged rules that the latter created, and winning - big time.

        I simply do not think they will keep to their rhetoric. And most times here we can only speak of vague things like 'what do you think will happen over the next 2 years'. But in this case it's something right in your face. You now have millions of little guys winning at the cost of a handful of Wallstreet billionaires. What will happen in this specific situation over the next weeks? If they do anything, the masks are going to come off. And you're not going to like what you see.

        • (Score: 3, Informative) by c0lo on Thursday January 28, @06:45AM

          by c0lo (156) Subscriber Badge on Thursday January 28, @06:45AM (#1105932) Journal

          The DNC, if they're to keep to their rhetoric, should be cheering this event on.

          Some notable of them are [twitter.com]

          --
          https://www.youtube.com/watch?v=aoFiw2jMy-0
        • (Score: 0) by Anonymous Coward on Thursday January 28, @04:06PM

          by Anonymous Coward on Thursday January 28, @04:06PM (#1106125)

          Now that Trump has been ousted, the masks can indeed come off.

    • (Score: 2) by c0lo on Thursday January 28, @06:05AM (26 children)

      by c0lo (156) Subscriber Badge on Thursday January 28, @06:05AM (#1105918) Journal

      What do you think will happen?

      In a normal world, absolutely nothing would happen.
      Biden was just reelected, there's nothing anybody can do for at least two years, Biden administration could go ahead with saving the America from pandemic as the utmost priority and, with a shrug, let those fuckers in the hole they dug themselves into. Unlike the 2008 crisis, the impact on the Average Joe is non-existent, no rush for a "too big to fail" is necessary.

      But I'm old enough to know the world is far from normal, so I'm not inclined to place bets.

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0
      • (Score: 4, Interesting) by Grishnakh on Thursday January 28, @06:26AM (22 children)

        by Grishnakh (2831) on Thursday January 28, @06:26AM (#1105924)

        I'm no finance expert, but my guess is this kind of activity can cause a market crash. Short-selling is actually blamed for the 1929 crash that led to the Great Depression. Because of this, it was highly regulated, but that regulation was lifted in 2007. So the Biden Administration might find itself *forced* to deal with this. Hopefully, they'll bring back some of the sensible regulation that was implemented after 1929 to prevent another Depression, but which has been repealed over the last 20-30 years.

        • (Score: 5, Insightful) by c0lo on Thursday January 28, @06:40AM (2 children)

          by c0lo (156) Subscriber Badge on Thursday January 28, @06:40AM (#1105930) Journal

          In this case, it's the stock of very few companies that are the battlefield, thus not generalized on the entire stock market.
          And the rational conclusion from this limited exercise would be "Shorting is dangerous like hell", thus less chances of the entire market crash.

          But as I said, we aren't living in a normal world. And share trading is not a rational exercise for already a long time.

          --
          https://www.youtube.com/watch?v=aoFiw2jMy-0
          • (Score: 0) by Anonymous Coward on Thursday January 28, @07:20AM (1 child)

            by Anonymous Coward on Thursday January 28, @07:20AM (#1105936)

            What is dangerous about buying puts?

            • (Score: 2) by FatPhil on Friday January 29, @12:53PM

              You could lose every cent you paid for them, and have nothing in hand afterwards to show for it.

              What's so dangerous about the lottery or putting money on nags?
              --
              I know I'm God, because every time I pray to him, I find I'm talking to myself.
        • (Score: 1, Insightful) by Anonymous Coward on Thursday January 28, @08:40AM

          by Anonymous Coward on Thursday January 28, @08:40AM (#1105963)

          > I'm no finance expert, but my guess is this kind of activity can cause a market crash.

          LOL quick we need to ban it - the wrong guy(s) won. Eerie.

        • (Score: 3, Interesting) by Anonymous Coward on Thursday January 28, @08:41AM (17 children)

          by Anonymous Coward on Thursday January 28, @08:41AM (#1105965)

          I'm no finance expert, but my guess is this kind of activity can cause a market crash. Short-selling is actually blamed for the 1929 crash that led to the Great Depression.

          Right. You are no expert and you are just guessing.

          This "kind of activity" with GME is barely a blip on a market that involves trillions of dollars. It's not going to cause a "crash."

          Regardless, crashes happen -- that is just the way free markets work. Additionally, the big crashes are usually symptoms of underlying problems in the general economy. The Great depression wasn't caused by short-selling.

          The good thing is that the SEC isn't run by the typically ignorant luddites (and politicians) who think that free markets need to be regulated to protect "mom & pop" investors from those "nefarious short sellers" and from those "evil high frequency traders." To anyone who has the slightest clue, the truth is that if no one is selling a stock then no one can buy stock. Thankfully there are short sellers and HFT's who make stock available to buy. The short sellers and especially the HFT's are also great for liquidity, which most definitely helps "mom & pop" get a better deal when buying and selling.

          So, short sellers and HFT's are actually beneficial to the overall market and particularly to retail traders.

          Stock prices go up and down for all kinds of reasons, most of which are perfectly legit/valid. Anyone who invests (whether long, short or neutral) takes a risk, and one party has to make money while the other party has to lose money -- that is integral to trading. If that were not the case, and if risk was eliminated with regulation for one or both sides, no one would ever invest on the side that has all the risk, and there would be no reason to invest if neither side had risk.

          This reddit activity and the "opposing" institutional shorting are both perfectly legitimate trading occurrences. Don't hamstring the free market with misinformed regulations!

          • (Score: 1) by khallow on Thursday January 28, @06:21PM

            by khallow (3766) Subscriber Badge on Thursday January 28, @06:21PM (#1106196) Journal
            The short sellers are particularly useful when you squeeze them!
          • (Score: 2) by quietus on Thursday January 28, @06:29PM (14 children)

            by quietus (6328) on Thursday January 28, @06:29PM (#1106203) Journal

            Indeed. Short sellers are just identifying the weaklings before anybody else does. If there were good economic reasons why Gamestop et al could return/become successful companies once again, you'd just wait until the price goes lower due to the shorters, then move in with your own long position.

            What all those foming at the mouth against shorters don't see is that if you chase shorters out of the market, you only encourage zombie companies i.e. exactly the companies who thrive on political connections to survive. What they also don't see is that this stinks to high haven of a pump-and-dump scheme, fuelled by social media manipulation.

            Enjoy holding your Gamestop shares for ever and eternity (that is, if you ever cared about the people at Gamestop): and be comforted, you just made a couple of rich assholes very, very happy. You better return to being Tesla fanbois and QAnon adherents, now.

            • (Score: 2) by Socrastotle on Thursday January 28, @07:50PM (6 children)

              by Socrastotle (13446) on Thursday January 28, @07:50PM (#1106248) Journal

              I don't think you understand what's happening here. The shorts got way too greedy and dramatically over-shorted the company. This left them *extremely* vulnerable. The shorts, likely due to illegal naked shorting, need to buy about 140% of floated shares in order to cover their shorts. When they buy these shares, it's going to send the price of the stock skyrocketing. They clearly were just hoping nobody would notice/exploit this. People did. And now the shorts are screwed. They, unlike the people who bought the stock, are on a strict time limit for two reasons:

              1) They are paying interest on their short positions each and every day that passes.
              2) The shorters are generally from elite hedge funds that promise huge returns and, in turn, charge huge fees. They can't just sit around with billions of dollars not only tied up but actively costing them money.

              Of course getting out would also cost them what could amount to tens of billions of dollars. Bahaha. It's hilarious and awesome. The hedge fundies might want to brush on their Nassim Nicholas Taleb. They could have hedged against this extremely improbable possibility at a negligible cost to their profit margin. But they thought 'nah, fuck it - all in!' And now they get to pay the price. And, in the process, they're making millions of not-rich assholes very, very happy.

              • (Score: 2) by quietus on Thursday January 28, @08:11PM (3 children)

                by quietus (6328) on Thursday January 28, @08:11PM (#1106255) Journal

                You forget another thing: margin call. A short seller needs to put up collateral with his brokerage, which itself has a maintenance margin on those [short] sales. Typical for a short sale is that the collateral needs to go up when the stock price rises. In practical terms, when the stock price has gone up with, say, 30%, the shorter got a call from his/her brokerage to increase the collateral. And another call at the next threshold. And another one at the next threshold, and so on. Shorters though have their own thresholds, and are non-emotional number people: they'll cap their losses, and ditch the short sale the moment that threshold has been called. They're not going to hang around to prove their point.

                Besides, that a few shorters get burned is not the issue here: the real issue is that the share price has gone up to ludicrous levels; and somebody's going to cash in. All he/she needed was a little investment in bots, and a loophole in robinhood's registration process.

                • (Score: 2) by Socrastotle on Thursday January 28, @08:36PM (2 children)

                  by Socrastotle (13446) on Thursday January 28, @08:36PM (#1106274) Journal

                  The one thing I think many people are missing here is that the shorts need to buy shares to close their positions. And not only do they need to buy, but they need to buy 140% of all floated shares. This is why Gamestop was targeted. The hedgies got greedy and *massively* over-shorted this stock. When they try to buy to cover, prices are going to go into lala land. Real losses are already in the billions of dollars. Losses when they try to close out their positions, and as a result jack the price up, are going to be *easily* in the tens of billions of dollars. This isn't a 'darn, cut my losses, time to go' type thing - we're talking about losses far larger than the net income Goldman Sachs, and perhaps surpassing even Alphabet/Google. This is real money, even in our world of fake money.

                  This is why they're already now turning to widespread collusion and what is likely illegal activity by getting brokerages to try to manipulate their users in order to manipulate the market and ideally drive the price down. They're in bed with the government and will be able to get off likely breaking the law/regulations with a limp slap on the wrist, if that. But bigger than that is the perception stuff. This stuff involves millions of people, all around the globe. And they're now overtly 'taking off the masks', colluding, and likely breaking the law - all to save Wallstreet vultures. And they're doing this in front of everybody. That's just unimaginably huge, and shows how critical this has become.

                  • (Score: 1) by khallow on Friday January 29, @12:34PM (1 child)

                    by khallow (3766) Subscriber Badge on Friday January 29, @12:34PM (#1106562) Journal

                    This is why they're already now turning to widespread collusion and what is likely illegal activity by getting brokerages to try to manipulate their users in order to manipulate the market and ideally drive the price down. They're in bed with the government and will be able to get off likely breaking the law/regulations with a limp slap on the wrist, if that. But bigger than that is the perception stuff. This stuff involves millions of people, all around the globe. And they're now overtly 'taking off the masks', colluding, and likely breaking the law - all to save Wallstreet vultures. And they're doing this in front of everybody. That's just unimaginably huge, and shows how critical this has become.

                    I don't think the private world has this kind of rapid coordination - there's no private organization that can deploy media and collude this fast. Look to the feds. They're the ones with the infrastructure already deployed for this sort of thing. They also have a lot of legal protection (such as sovereign immunity) against charges like collusion.

                    I see that the price of Gamestop dropped dramatically yesterday. That indicates to me that a good portion of the short is gone.

                    • (Score: 0) by Anonymous Coward on Friday January 29, @06:16PM

                      by Anonymous Coward on Friday January 29, @06:16PM (#1106654)

                      From what I understand when it was down the amount of shares being sold was small and possibly just back and forth between brokers to try to get retail investors to sell when a lot of them could only sell because many brokers blocked retail investors from buying.

              • (Score: 2) by FatPhil on Friday January 29, @01:00PM (1 child)

                No. For the 140th time, the 140% is not a measure of what ratio of the float is being shorted. So no, no illegal naked shorts are required. And therefore the majority of the people taking short positions are *doing nothing wrong*, either legally or morally. Whether they are greedy is irrelevant. You might even find that it's a fund manager's *job* is to be greedy - if he isn't, he ain't much of a fund manager, get a better one. Yes, that includes you, mom & pop business owner, get a greedier fund manager, for your own good.
                --
                I know I'm God, because every time I pray to him, I find I'm talking to myself.
                • (Score: 0) by Anonymous Coward on Saturday January 30, @12:57PM

                  by Anonymous Coward on Saturday January 30, @12:57PM (#1106861)

                  Naked shorting isn't required. The contacts are not all for the same date.

            • (Score: 2) by quietus on Thursday January 28, @08:43PM (6 children)

              by quietus (6328) on Thursday January 28, @08:43PM (#1106278) Journal

              Two consequences.

              Consequence A. People are going to rebalance their portfolio away from companies with a small amount of outstanding shares, because these are the most vulnerable to such flash mob attacks by "retail investors". And no, because this time the price went up, that doesn't mean that next time the stock price also is going to go up.

              Consequence B. The Reddit crowd went wild on evil hedge funds. Those hedge funds will incorporate that in their risk strategy, wait with bringing liquidity back in the market, and increase their own reserves. The net effect will be that there's less money in the market (though a bit of deflation there is not overdue), and even bigger price swings: which in turn is not necessarily good for retirement funds, which should prefer stability.

              This whole idiocy, if it spreads, will hurt exactly the younger and smaller companies, who need the stock market money the most for growth -- and with it the US economy.

              Me, I prefer Buffalo Man.

              • (Score: 1, Insightful) by Anonymous Coward on Thursday January 28, @10:23PM (1 child)

                by Anonymous Coward on Thursday January 28, @10:23PM (#1106315)

                Could someone explain? Thanks.

                This whole idiocy, if it spreads, will hurt exactly the younger and smaller companies, who need the stock market money the most for growth -- and with it the US economy.

                From my understading, when a company sells shares to be publicily traded, they get money once, and then just have to give profits to whoever owns the shares. But the companies does not get money again for those shares, it's a one time thing.

                OTOH, I know that companies can suffer if their shares are worthless, because people will think the company is worthless, ignoring if it really is an empty shell, or a full bag (maybe even with with lots of recurrent business in the future, or even growth path) with a cheap sticker attached.

                If the quote is about companies playing with someone else stocks... well, I guess different thing and I could see what it means.

                • (Score: 2) by quietus on Friday January 29, @11:02AM

                  by quietus (6328) on Friday January 29, @11:02AM (#1106542) Journal

                  Errr ... you know of any company that brings shares to the market only once? Any company at all? While the share price at IPO might be based on estimates about the future profitability of a company, the next rounds of share selling will be heavily based on the performance of the shares already present on the stock market.

                  If that performance whipsawed, or has shown valuations that have clearly no economic basis, serious investors will not want to get involved unless the premium (guaranteed profit) you offer them rises; which in turn will lower the valuation at which you can bring your shares to market, which in practice means that your borrowing rate [from the stock market] has gone up, which means you'll either have to grow slower, creating fewer jobs in the process, or sell ever more of your company away, which also has an impact on job creation.

              • (Score: 1) by khallow on Friday January 29, @12:48PM (2 children)

                by khallow (3766) Subscriber Badge on Friday January 29, @12:48PM (#1106563) Journal

                This whole idiocy, if it spreads, will hurt exactly the younger and smaller companies, who need the stock market money the most for growth -- and with it the US economy.

                You say that like it's a bad thing. Sorry, I don't see a problem here. Look at consequence A. Companies with a small amount of outstanding shares have a lot of risk. Investors realizing that risk is there, now will make better trades. That's better for the economy.

                Consequence B is temporary. And well, you acknowledge it is needed too. Sounds like another better for the economy thing.

                Let's use car analogies. You blissfully followed your car's GPS to Portland, Maine when you wanted to go to Portland, Oregon. Oops. There's no way to get between the two cities without thousands of miles of travel. We could choose to interpret the subsequent trip as bad for you, but it's less worse than staying in Portland, Maine when you need to be in Portland, Oregon. The mistakes that were bad for you have already been made.

                Similarly, the mistakes that led to your concerns have already been made. It's less bad for the economy for those investors and hedge funds to be a bit more conservative and correct their exposure to these problems, than to just ignore the lessons from this little episode and perhaps lose billions of dollars down the road (a way markets correct participants who choose not to learn from others' mistakes).

                • (Score: 2) by quietus on Friday January 29, @03:50PM (1 child)

                  by quietus (6328) on Friday January 29, @03:50PM (#1106617) Journal

                  The risk your talking about here -- flash mob manipulation of share trading -- has no economic basis: it is not based on P/E analysis, insights into the company's liquidity or cash flow situation or any other type of business indicator. Its only basis is emotion -- the lulz for some, anti-evil-i-don't-understand for others -- manipulation through social media.

                  A better comparison is that bunch of anti-maskers trying to block the entrance of a Trader Joe's of a few weeks ago: convinced they're doing the good fight, but really only falling for disinformation, and very much out of their depth anyway.

                  • (Score: 1) by khallow on Saturday January 30, @08:50PM

                    by khallow (3766) Subscriber Badge on Saturday January 30, @08:50PM (#1106959) Journal

                    The risk your talking about here -- flash mob manipulation of share trading -- has no economic basis: it is not based on P/E analysis, insights into the company's liquidity or cash flow situation or any other type of business indicator. Its only basis is emotion -- the lulz for some, anti-evil-i-don't-understand for others -- manipulation through social media.

                    I'm not seeing the point to this comment. A lot of what we do has economic effect without apparent economic basis. If market participants only take into account economic bases rather than economic effects, then they're doing it wrong and indicates deeper problems than merely being unable to anticipate lulz. Things like this short squeeze will help correct that erroneous behavior.

                    A better comparison is that bunch of anti-maskers trying to block the entrance of a Trader Joe's of a few weeks ago: convinced they're doing the good fight, but really only falling for disinformation, and very much out of their depth anyway.

                    And apparently handled well by the Trader Joe's employees. My take on this is that if your business can't handle sporadic adverse activity taken on a non-economic basis, then what else can't it handle? Losing a few billion will both help reduce the future risk from that business and it's issues, and give them appropriate feedback that they're not paying appropriate attention to the risks of their actions.

              • (Score: 2) by quietus on Saturday January 30, @08:07AM

                by quietus (6328) on Saturday January 30, @08:07AM (#1106842) Journal

                A funny thing, I didn't know (next to DeepFuckingValue having $21M in his trading account): Robinhood makes money by selling its order flow data to high-frequency traders i.e. established traders making a buttload of money out of this.

          • (Score: 0) by Anonymous Coward on Friday January 29, @12:33AM

            by Anonymous Coward on Friday January 29, @12:33AM (#1106374)

            Anyone who invests (whether long, short or neutral) takes a risk, and one party has to make money while the other party has to lose money -- that is integral to trading.

            Clearly, you have no idea how the stock market actually works. My suggestion: stick to index funds. It will be much safer for you.

      • (Score: 0) by Anonymous Coward on Thursday January 28, @11:52AM (2 children)

        by Anonymous Coward on Thursday January 28, @11:52AM (#1106014)

        Washington bailed out Wall Street in 2008 and 2009, so if the results of this silly game get big enough I expect them to do it again. And yes, they shouldn't. Let Wall Street eat itself, it stopped being anything other than a casino for rich people before I was born.

        But no, I don't expect the government to sit by and let this happen. I expect the Democrats to get involved on the side of the rich people holding their leash. And if Trump and the Republicans controlled Congress, they would do the same.

        • (Score: 2) by c0lo on Thursday January 28, @12:38PM (1 child)

          by c0lo (156) Subscriber Badge on Thursday January 28, @12:38PM (#1106034) Journal

          I expect the Democrats to get involved on the side of the rich people holding their leash.

          A good position to potentially be pleasantly surprised, yes.

          --
          https://www.youtube.com/watch?v=aoFiw2jMy-0
          • (Score: 0) by Anonymous Coward on Thursday January 28, @07:45PM

            by Anonymous Coward on Thursday January 28, @07:45PM (#1106244)

            I hope you're right, but I'm not holding my breath. Wall Street gave millions of mortgages to people they knew couldn't play, and when it was going to come back to bite them, DC gave them bailouts and executive bonuses. Nobody went to prison for fraud. They own DC, the public knows it and hates it, and one of the many reasons Trump won in 2016 was the lie to voters that Wall Street wouldn't own him. Fuck Everyone Else For The Sake Of Wall Street, Inc. didn't need to own Trump, he's on their board of directors.

    • (Score: 2) by c0lo on Thursday January 28, @06:16AM (3 children)

      by c0lo (156) Subscriber Badge on Thursday January 28, @06:16AM (#1105922) Journal

      Please make your predictions of what you expect the Biden administration to do today

      Today, White House monitoring situation involving GameStop, other firms [reuters.com]
      Who knows what tomorrow will bring.

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0
      • (Score: 0) by Anonymous Coward on Thursday January 28, @08:13AM

        by Anonymous Coward on Thursday January 28, @08:13AM (#1105957)

        Ah the good old Department of Situation Monitoring.

      • (Score: 1, Touché) by Anonymous Coward on Thursday January 28, @01:12PM (1 child)

        by Anonymous Coward on Thursday January 28, @01:12PM (#1106046)

        Occupy: "Damn you Wall St"
        Antifa: *smashes Starbucks window* "Damn you Capitalism"
        WSB: "WE LIKE THE STOCK"

        • (Score: 2) by c0lo on Thursday January 28, @02:02PM

          by c0lo (156) Subscriber Badge on Thursday January 28, @02:02PM (#1106068) Journal

          I like it too. Particularly the veggie stock.

          On a serious note, WSB seems like the only group that knows what they like, everyone else knowing what they dislike but not what to replace it with.

          --
          https://www.youtube.com/watch?v=aoFiw2jMy-0
    • (Score: 5, Interesting) by c0lo on Thursday January 28, @06:43AM (28 children)

      by c0lo (156) Subscriber Badge on Thursday January 28, @06:43AM (#1105931) Journal
      • (Score: 2, Funny) by Anonymous Coward on Thursday January 28, @07:53AM (8 children)

        by Anonymous Coward on Thursday January 28, @07:53AM (#1105947)

        It's a good point. How did we fall so far as a nation that billionaires in yachts can no longer short companies into bankruptcy? Disgusting.

        • (Score: 5, Insightful) by FatPhil on Thursday January 28, @08:56AM (4 children)

          Revisionist history.

          GameStop was already slated as being moribund long before Melvin moved in: https://www.fool.com/investing/2020/02/22/is-gamestop-headed-for-bankruptcy.aspx

          The bears moved in *because* of its downward trajectory, not causing its downward trajectory. (However, it does become a self-fulfilling prophecy eventually.)
          --
          I know I'm God, because every time I pray to him, I find I'm talking to myself.
          • (Score: 1, Interesting) by Anonymous Coward on Thursday January 28, @09:05AM (1 child)

            by Anonymous Coward on Thursday January 28, @09:05AM (#1105981)

            > The bears moved in *because* of its downward trajectory, not causing its downward trajectory. (However, it does become a self-fulfilling prophecy eventually.)

            In the reddit/GME instance, it appears that most of the short sellers moved in when they smelled blood after the first spike in price caused by reddit folks.

            • (Score: 2) by FatPhil on Friday January 29, @08:14AM

              +1 Interesting. If so, then this is a clear example of divers strategies competing against known opponents, which is all fine by me, as I love Game Theory, and have no skin in the game. In fact, the arrival of a new radically different, almost suicidal, strategy into the field of play is quite an exciting one to someone not just into game theory, but evolutionary biology too - this is like a land bridge being formed to an island that was cut off millions of years ago - a new population has arrived, they kinda look like us, but their behaviour is very different. The fact that the Fed is the unwitting backer to this strategy, making it not suicidal at all, adds to the hilarity. When does stimmy #3 arrive - I'm wondering how much popcorn to bulk order?

              Stimmy stimmy stimme a check after midnight
              Won't somebody fund me chase the shorters away?
              --
              I know I'm God, because every time I pray to him, I find I'm talking to myself.
          • (Score: 2) by ElizabethGreene on Friday January 29, @03:08AM (1 child)

            by ElizabethGreene (6748) on Friday January 29, @03:08AM (#1106441)

            If you go spelunking in the ancient DD in /r/wallstreetbets about $GME you'll find an old and compelling argument by /u/deepfuckingvalue that the new CEO was maneuvering to arm-twist or oust some of the recalcitrant board members to change the company's stores into experience centers and drive significant value from the brand. My experiences with the stores led me to ignore it at the time. I'm curious to see if he'll manage to do it. The PR from this squeeze certainly couldn't hurt.

            • (Score: 2) by FatPhil on Friday January 29, @08:03AM

              Reddit serves me only the top 3 comments in each thread, so spelunking a site I never read is a near impossibility - thank you for picking out at least a few bones. Not being in the US, GME wasn't of particular interest me in the late teenies, but it did appear by name in the news aggregators, more so in the twenties. So I only got an approximation to the real story, and no "hot takes". However, the view from a thousand miles was "it's dead, just let it die". The only naysayers seemed to be people who'd not looked at the fundamentals, and were driven by emotion not facts. It's certainly possible for the momentum of a brand to be a driving force behind a reinvention of the company, and as you say, momentum is now high. Time to enter the "bargaining" phase...
              --
              I know I'm God, because every time I pray to him, I find I'm talking to myself.
        • (Score: 0) by Anonymous Coward on Thursday January 28, @08:59AM (2 children)

          by Anonymous Coward on Thursday January 28, @08:59AM (#1105978)

          Shorting stock doesn't cause a company to go into bankruptcy.

          Furthermore, market capitalization doesn't really reflect a company's financial condition.

          • (Score: 0) by Anonymous Coward on Thursday January 28, @03:41PM (1 child)

            by Anonymous Coward on Thursday January 28, @03:41PM (#1106106)

            If its share price goes to zero it does.

            • (Score: 0) by Anonymous Coward on Thursday January 28, @04:10PM

              by Anonymous Coward on Thursday January 28, @04:10PM (#1106129)

              No. Only being unable to meet corporate liabilities, or the expectation of such, will trigger bankruptcy.

      • (Score: 1, Interesting) by Anonymous Coward on Thursday January 28, @08:55AM (18 children)

        by Anonymous Coward on Thursday January 28, @08:55AM (#1105973)

        I admire AOC, and I think that she has truthful insight in most situations, but she is wrong in this instance.

        The stock market is not the economy. Those are two separate and frequently independent entities.

        Trading stocks (and derivatives) is often a gamble, but stock trading is not treating the economy as a casino.

        Furthermore, very few economic experts are correct about anything, other than the most obvious trends. It is unlikely that AOC or any other politician can do any better than "the experts."

        • (Score: 2) by c0lo on Thursday January 28, @10:12AM (8 children)

          by c0lo (156) Subscriber Badge on Thursday January 28, @10:12AM (#1105993) Journal

          The stock market is not the economy. Those are two separate and frequently independent entities.

          Trading stocks (and derivatives) is often a gamble, but stock trading is not treating the economy as a casino.

          Tell me honestly, hand on heart, if you think that the "stock market == economy" confusion is not actually present in the mind of most of the stock traders themselves.

          --
          https://www.youtube.com/watch?v=aoFiw2jMy-0
          • (Score: 1, Insightful) by Anonymous Coward on Thursday January 28, @10:23AM (6 children)

            by Anonymous Coward on Thursday January 28, @10:23AM (#1105994)

            I don't think you can find any stock trader who thinks that.

            • (Score: 2) by c0lo on Thursday January 28, @10:47AM (4 children)

              by c0lo (156) Subscriber Badge on Thursday January 28, @10:47AM (#1106000) Journal

              If you say so, I can do nothing but to believe you.

              And, in the context, it is true now because:
              1. I don't have any stock trader in my circle
              2. I don't have time to search for even a single one (no matter what he believes)
              therefore it is guaranteed that I won't find a stock trader who thinks that.

              --
              https://www.youtube.com/watch?v=aoFiw2jMy-0
              • (Score: 1, Insightful) by Anonymous Coward on Thursday January 28, @10:51AM (3 children)

                by Anonymous Coward on Thursday January 28, @10:51AM (#1106002)

                It would be a pretty ignorant thing to think. Doubt you could last long trading stocks if you thought that.

                • (Score: 2) by c0lo on Thursday January 28, @12:40PM (2 children)

                  by c0lo (156) Subscriber Badge on Thursday January 28, @12:40PM (#1106036) Journal

                  Doubt you could last long trading stocks if you thought that.

                  Glad to be ignorant and wise enough to stay away from it. Time of (my) life is too expensive to gamble.

                  --
                  https://www.youtube.com/watch?v=aoFiw2jMy-0
                  • (Score: 0) by Anonymous Coward on Thursday January 28, @01:17PM (1 child)

                    by Anonymous Coward on Thursday January 28, @01:17PM (#1106050)

                    You seem to be quite comfortable commenting about the dangers and possible regulations.

                    • (Score: 2) by c0lo on Thursday January 28, @01:59PM

                      by c0lo (156) Subscriber Badge on Thursday January 28, @01:59PM (#1106067) Journal

                      You seem to be quite comfortable commenting about the dangers...

                      [Citation needed]

                      ... and possible regulations.

                      [Citation needed]

                      --
                      https://www.youtube.com/watch?v=aoFiw2jMy-0
            • (Score: 2) by FatPhil on Friday January 29, @01:06PM

              I'm sure Donald Trump has traded a few stocks in his time. And he repeated the lie a hundred times.
              --
              I know I'm God, because every time I pray to him, I find I'm talking to myself.
          • (Score: 0) by Anonymous Coward on Thursday January 28, @09:42PM

            by Anonymous Coward on Thursday January 28, @09:42PM (#1106298)

            Tell me honestly, hand on heart, if you think that the "stock market == economy" confusion is not actually present in the mind of most of the stock traders themselves.

            As a trader, I have never thought that the stock market was "the economy." That notion is resevrved for uninformed, non-traders.

        • (Score: 1) by khallow on Thursday January 28, @12:49PM (8 children)

          by khallow (3766) Subscriber Badge on Thursday January 28, @12:49PM (#1106039) Journal
          I don't have such a high opinion of AOC, but the stock market is part of the economy. It isn't a stretch to say that an interaction with the stock market is an interaction with the economy - especially when that's how you interact with the economy. Maybe she makes that conflation more explicit elsewhere?

          Trading stocks (and derivatives) is often a gamble, but stock trading is not treating the economy as a casino.

          Except, of course, when it is. You can bet a lot about the economy by betting on companies that are effected, good or bad, by the particular aspects or dynamics of the economy you are interested in.

          • (Score: 0) by Anonymous Coward on Thursday January 28, @01:04PM

            by Anonymous Coward on Thursday January 28, @01:04PM (#1106044)

            A casino is part of the economy too. It is a casino not a market because when they lose outcome the bailouts, trading halts, etc. The casino will just shut down rather than pay you if it becomes unprofitable.

          • (Score: 0) by Anonymous Coward on Thursday January 28, @05:48PM (6 children)

            by Anonymous Coward on Thursday January 28, @05:48PM (#1106178)

            It isn't a stretch to say that an interaction with the stock market is an interaction with the economy - especially when that's how you interact with the economy.

            Well, if most individuals and most company put all of their cash into the stock market, your notion might be true, and the stock market events could directly effect the economy. However, that is not the reality. If anything, it's the other way around -- events in the economy directly effect the stock market. Such cause and effect is referred to as a "binary event" by some traders, and the phenomenon is frequent and common.

            Furthermore, market capitalization usually has little bearing on a company's financial condition, but a stocks price can be a reflection of a company's health/prominence.

            Trading stocks (and derivatives) is often a gamble, but stock trading is not treating the economy as a casino.

            Except, of course, when it is. You can bet a lot about the economy by betting on companies that are effected, good or bad, by the particular aspects or dynamics of the economy you are interested in.

            No. You can bet on sports, but your betting is not the sport. The betting and the sport are two independent entities (unless there is some sort of hanky-panky going on). Likewise, the stock market and the economy are mostly independent from each other.

            • (Score: 1) by khallow on Thursday January 28, @06:16PM (5 children)

              by khallow (3766) Subscriber Badge on Thursday January 28, @06:16PM (#1106191) Journal
              She wasn't speaking of most people or most companies, but rather of "Wallstreeters", whom we can safely assume put most of their cash in things like stock markets.

              You can bet on sports, but your betting is not the sport.

              But your betting is betting. When your stock trading (which is not sports too) is indeed gambling, then there you go circularly.

              Likewise, the stock market and the economy are mostly independent from each other.

              Incorrect, since stock markets and trading on stock markets are part of the economy, they're by default dependent on the economy. When you say "economy" here you really mean economy outside of the stock market. Even then there are parts that are heavily intertwined and parts that aren't.

              • (Score: 0) by Anonymous Coward on Thursday January 28, @08:54PM (4 children)

                by Anonymous Coward on Thursday January 28, @08:54PM (#1106283)

                She wasn't speaking of most people or most companies, but rather of "Wallstreeters", whom we can safely assume put most of their cash in things like stock markets.

                What is your point?

                But your betting is betting.

                Yes. So what?

                When your stock trading (which is not sports too) is indeed gambling, then there you go circularly.

                Huh? No.

                Playing the stock market is just like betting in a sports book, and "the economy is just like the world of sports. You can make all kinds of bets (huge or small), but those bets don't affect the world of sports. Likewise, one can make all kinds of stock trades, but those trades don't affect the general economy.

                Likewise, the stock market and the economy are mostly independent from each other.

                Incorrect, since stock markets and trading on stock markets are part of the economy, they're by default dependent on the economy.

                Not really.

                Sure, there has to be an economy with companies for the stock market to exist, and there are frequently events that happen in the economy (and in the world) that temporarily affect the overall market and individual stocks. However, something really serious has to happen to the economy to significantly affect the overall stock market. Otherwise, the two entities are independent.

                Take just last year, for instance. In 2020, the US economy shrank by 3.5%, in its worst year for growth since 1946:
                https://www.msn.com/en-gb/money/news/us-economy-shrank-by-35-25-in-2020-the-worst-year-since-second-world-war/ar-BB1db4Hc

                In that same year (2020), the S&P 500 gained a whopping 16.26%!:
                https://www.macrotrends.net/2324/sp-500-historical-chart-data#menu2

                So, the "economy" and the stock market often move in different directions and are, thus, mostly separate and independent from each other.

                When you say "economy" here you really mean economy outside of the stock market. Even then there are parts that are heavily intertwined and parts that aren't.

                Well, yes... just like when I say "sports" when I mean the sports world outside of the sports book.

                The only time that the economy and the stock market are "heavily intertwined" is when "binary" events occur in the economy and in the world.

                • (Score: 1) by khallow on Thursday January 28, @11:27PM (3 children)

                  by khallow (3766) Subscriber Badge on Thursday January 28, @11:27PM (#1106347) Journal
                  My point is that you are saying things that are trivially false.

                  Playing the stock market is just like betting in a sports book, and "the economy is just like the world of sports. You can make all kinds of bets (huge or small), but those bets don't affect the world of sports. Likewise, one can make all kinds of stock trades, but those trades don't affect the general economy.

                  An analogy and final assertion that is irrelevant to AOC's quote. I already explained why. She was specifically talking about a small class of people who invest in stock markets and similar securities markets. It would be exactly like talking about sport betters who interact with the world of sports through betting.

                  Take just last year, for instance. In 2020, the US economy shrank by 3.5%, in its worst year for growth since 1946:
                  " rel="url2html-1944">https://www.msn.com/en-gb/money/news/us-economy-shrank-by-35-25-in-2020-the-worst-year-since-second-world-war/ar-BB1db4Hc

                  In that same year (2020), the S&P 500 gained a whopping 16.26%!:
                  " rel="url2html-1944">https://www.macrotrends.net/2324/sp-500-historical-chart-data#menu2

                  So, the "economy" and the stock market often move in different directions and are, thus, mostly separate and independent from each other.

                  I find it remarkable how you picked one of the worst possible examples to back that claim. Those two parameters are both moving in the same direction!

                  When there's a great deal of uncertainty in an economy (such as generated by a covid pandemic), investors buy the more reliable (or at least the investments perceived as being more reliable) at a premium and raise the price of those investments. Thus, things like S&P 500 stocks rise in price as one would expect. We have here an example of the couplings between the stock markets and the greater economy, contrary to assertion.

                  The only time that the economy and the stock market are "heavily intertwined" is when "binary" events occur in the economy and in the world.

                  Well, we already have one such "binary" event above. It's time to rethink your assumptions.

                  • (Score: 0) by Anonymous Coward on Friday January 29, @11:02AM (2 children)

                    by Anonymous Coward on Friday January 29, @11:02AM (#1106541)

                    My point is that you are saying things that are trivially false.

                    Nope. You just need to get a little education regarding the stock market.

                    Playing the stock market is just like betting in a sports book, and "the economy is just like the world of sports. You can make all kinds of bets (huge or small), but those bets don't affect the world of sports. Likewise, one can make all kinds of stock trades, but those trades don't affect the general economy.

                    An analogy and final assertion that is irrelevant to AOC's quote. I already explained why. She was specifically talking about a small class of people who invest in stock markets and similar securities markets. It would be exactly like talking about sport betters who interact with the world of sports through betting.

                    Everything I said is most certainly relevant to AOC's (and your) misinformed notion that the stock market and the economy are the same and strongly correlated. You just repeated my analogy to suggest the reality -- hence, my analogy is relevant!

                    And by the way, AOC referred both to "Wall Streeters" and to "message board posters."

                    I find it remarkable how you picked one of the worst possible examples to back that claim. Those two parameters are both moving in the same direction!

                    When there's a great deal of uncertainty in an economy (such as generated by a covid pandemic), investors buy the more reliable (or at least the investments perceived as being more reliable) at a premium and raise the price of those investments. Thus, things like S&P 500 stocks rise in price as one would expect. We have here an example of the couplings between the stock markets and the greater economy, contrary to assertion.

                    You really should educate yourself a little before you post.

                    Those two "parameters" are not moving in the same direction, and history mostly disagrees with your notion of how those moves are correlated. Historically, when there is a great deal of uncertainty in the economy, investors go from stocks to bonds and to hard commodities, and sometimes just to cash. However, that is not what happened last year (2020) nor in several instances prior. The correlation between significant drops in the economy and movement into bonds and commodities has broken down in recent years.

                    It doesn't take much digging to realize that movement of the stock market and the economy are largely independent from each other, with little definite correlation. Merely recall the stock market crash of the Great Depression. During the first for full calendar years of that depression (1930, 1931, 1932 and 1933), the S&P 500 averaged a 26% drop each of those four years. However, I think that even you would agree that there was "uncertainty in the economy" during those for years. Similar economy/market moves happened at the 2008 crash. Yet 2020 (and other periods) show the stock market rising while the economy tanks.

                    So much for your notion that about uncertainty in the economy accompanies a rise in the stock market.

                    Other than at periods of really huge economic downturns, there is no solid correlation between the stock market and the economy.

                    • (Score: 1) by khallow on Friday January 29, @12:13PM (1 child)

                      by khallow (3766) Subscriber Badge on Friday January 29, @12:13PM (#1106556) Journal

                      Everything I said is most certainly relevant to AOC's (and your) misinformed notion that the stock market and the economy are the same and strongly correlated.

                      But that misinformed notion is a straw man. It's possible that AOC believes that, but we can't tell from what she wrote. I certainly don't nor gave that impression.

                      It doesn't take much digging to realize that movement of the stock market and the economy are largely independent from each other, with little definite correlation. Merely recall the stock market crash of the Great Depression. During the first for full calendar years of that depression (1930, 1931, 1932 and 1933), the S&P 500 averaged a 26% drop each of those four years. However, I think that even you would agree that there was "uncertainty in the economy" during those for years. Similar economy/market moves happened at the 2008 crash. Yet 2020 (and other periods) show the stock market rising while the economy tanks.

                      There was also massive problems with the S&P 500 companies back then. These events are all different - their causes and consequences. As a result, what investments are perceived as more or less reliable and secure change as well. You are trying to use a simplistic model to claim that there is no correlation. But there's no reason to expect a simple one-way correlation (positive or negative) between economic activity and stock price.

                      • (Score: 0) by Anonymous Coward on Friday January 29, @07:01PM

                        by Anonymous Coward on Friday January 29, @07:01PM (#1106663)

                        But that misinformed notion is a straw man. It's possible that AOC believes that, but we can't tell from what she wrote. I certainly don't nor gave that impression.

                        Ahh... So YOU admit that it is a misconception that the stock market and the economy are the same thing.

                        The fact that AOC is always very direct combined with the fact that it is a very common misconception the stock market and the economy are the same would strongly suggest that AOC is misinformed.

                        There was also massive problems with the S&P 500 companies back then.

                        Not exactly. There were massive problems in the economy. Nevertheless, the 2008 crash didn't exhibit the same symptoms, and 2020 was a different situation from both of those crashes. There are countless other disparate examples, especially in the last few years.

                        Again, the economy and the stock market are generally two independent entities, unless there is a huge catastrophe.

                        These events are all different - their causes and consequences.

                        You keep parroting my arguments. What is your point?

                        As a result, what investments are perceived as more or less reliable and secure change as well.

                        Of course, but there were never a lot of "reliable" investments -- not ones that would consistently return huge percentages over a long term.

                        Again, what is your point? How does this argument relate to the common misconception that the stock market and the economy are the same thing?

                        You are trying to use a simplistic model to claim that there is no correlation.

                        No. I am not using a "model" -- I am simply providing facts. The fact is that there is no solid correlation between moves in the stock market and moves in the economy, except when the economy takes a huge downturn.

                        By the way, here is a chart that shows the S&P 500 overlaid with the US GDP from around 1960 to 2020:
                        https://www.isabelnet.com/u-s-gdp-and-sp-500/ [isabelnet.com]

                        Here is an article from 2015 that gives a 45.9% correlation between the S&P 500 and the GDP (from 1958 to 2015):
                        https://seekingalpha.com/article/3053626-u-s-real-gdp-and-s-and-p-500-price-performance [seekingalpha.com]

                        A 45.9% correlation means the the S&P 500 and the GDP move together less than 50% of the time.

                        But there's no reason to expect a simple one-way correlation (positive or negative) between economic activity and stock price.

                        Exactly my point! The stock market and the economy are two different, independent entities!

    • (Score: 3, Interesting) by Socrastotle on Thursday January 28, @02:20PM (3 children)

      by Socrastotle (13446) on Thursday January 28, @02:20PM (#1106072) Journal

      "What do you think will be this little subreddit's ultimate fate?"

      Not the subreddit but WallStreetBet's Discord just got predictably banned. Discord claimed "hate speech". Here [reddit.com] is what WSB had to say about it:

      We're suffering from success and our Discord was the first casualty. You know as well as I do that if you gather 250k people in one spot someone is going to say something that makes you look bad. That room was golden and the people that run it are awesome. We blocked all bad words with a bot, which should be enough, but apparently if someone can say a bad word with weird unicode icelandic characters and someone can screenshot it you don't get to hang out with your friends anymore. Discord did us dirty and I am not impressed with them destroying our community instead of stepping in with the wrench we may have needed to fix things, especially after we got over 1,000 server boosts. That is pretty unethical.

      There's apparently a hoard of fake accounts now also running around on Twitter claiming to be them, saying all sorts of nasty stuff, presumably in order to give justification for the likely oncoming mass social media purge. The peasants have bruised the eyes of the royalty. It is time for a purge. The only question is if/when Reddit will ban them given Reddit owners have overtly come out in support of them. Reddit uses Cloudflare alongside a number of other possible middleware vectors that could be used to force them off the web if they don't play ball. This is getting super interesting!

      • (Score: 3, Interesting) by Socrastotle on Thursday January 28, @04:02PM (2 children)

        by Socrastotle (13446) on Thursday January 28, @04:02PM (#1106123) Journal

        Further extra-judicial crackdowns continue. Interactive Brokers and Robinhood have now both banned buying of Gamestop stock. If the implication there isn't clear, it means you can only sell it. Sell = price goes down = helps Wallstreet. At the same time this is happening other brokerages are having coordinated 'outages'. This includes Ameritrade, Etrade, Fidelity, and Charles Schwab. Welcome to Cartel Land: population a whole lot more than we probably ever thought.

        • (Score: 2) by ElizabethGreene on Friday January 29, @03:10AM

          by ElizabethGreene (6748) on Friday January 29, @03:10AM (#1106443)

          I got an email from Robinhood indicating they'll reopen trading in gamestop tomorrow.

        • (Score: 2) by FatPhil on Friday January 29, @01:08PM

          > This includes Ameritrade, ... and Charles Schwab. Welcome to Cartel Land: population a whole lot more than we probably ever thought.

          and now one less - Ameritrade is Schwab, since last year.
          --
          I know I'm God, because every time I pray to him, I find I'm talking to myself.
    • (Score: 3, Interesting) by Thexalon on Thursday January 28, @04:45PM (12 children)

      by Thexalon (636) on Thursday January 28, @04:45PM (#1106152)

      The Biden administration didn't need to do anything about this: The exchanges stopped allowing trades on those stocks today. All completely legal, and showing to what degree the stock exchange is a fair game that everybody can play.

      Oh, and the kinds of regulations the likes of Elizabeth Warren want would have prevented the situation arising in the first place, because they would make it illegal to short-sell 140% of a company's stock.

      --
      The inverse of "I told you so" is "Nobody could have predicted"
      • (Score: 2) by Socrastotle on Thursday January 28, @06:22PM (7 children)

        by Socrastotle (13446) on Thursday January 28, @06:22PM (#1106197) Journal

        Naked shorting, which enables this, is already prevented by SEC regulations. The problem, as always, is that laws and regulations don't mean anything if they aren't enforced. And regulations against banks, wall street, etc are mostly meaningless because these groups and the politicians in DC are, essentially, the same people.

        And no, stopping the trading of these stocks was almost certainly illegal. Buying stocks and telling people why you're buying them is legal. Companies colluding with investors (though again they are, in large part, frequently the same people anyhow) to prevent millions of people from trading, in order to prevent them from accessing the markets in order to make a profit (or less of a loss) has to be breaking about a million and one anti-compete and other laws and regulations. But of course this begs the question. Will the government actually enforce it? All we can see so far is that AOC is damn sure not controlled by the banks. But one congresswoman alone is hardly enough to enforce a pizza delivery, let alone bringing to heel the most influential organizations and people in this entire country.

        • (Score: 2) by Thexalon on Friday January 29, @03:35AM (6 children)

          by Thexalon (636) on Friday January 29, @03:35AM (#1106457)

          I mentioned Senator Elizabeth Warren for a very specific reason, namely that her specialty has long been banking regulation. And her opinion on this whole mess was that there was a lack of enforcement of stock regulations at the SEC that led to the conditions that made the Redditors win this round.

          --
          The inverse of "I told you so" is "Nobody could have predicted"
          • (Score: 2) by Socrastotle on Friday January 29, @04:49AM (5 children)

            by Socrastotle (13446) on Friday January 29, @04:49AM (#1106477) Journal

            Redditors didn't "win this round" because of lack of regulations or whatever - they won because market fundamentals were on their side. The reason the market fundamentals were what they were could have prevented had the hedge fund obeyed regulations, but everything the Redditors did was 100% on the up and up.

            But beyond that I don't understand what you're even proposing, and I'm not entirely sure you do either. Regulations already "have" to be followed. The reason they're not being followed is systemic. The DNC (and GOP) and Wallstreet/banks/megacorps are all deeply incestuous. And if you ever want one to act in a way disfavorable to the interests of another, you're going to need to completely detach the conflicts of interest. And that isn't happening in our country without a complete overhaul of our entire governmental system.

            And hyper-partisanship means that will never peacefully happen, because people are so attached to their D or R that all somebody needs to say is "If you don't vote for, the other [evil] guy wins." and they'll immediately go back to voting for the D/R even if they hate them. Simply because they hate the other guy even more.

            • (Score: 2) by Thexalon on Friday January 29, @02:59PM (3 children)

              by Thexalon (636) on Friday January 29, @02:59PM (#1106591)

              But beyond that I don't understand what you're even proposing, and I'm not entirely sure you do either. Regulations already "have" to be followed. The reason they're not being followed is systemic.

              What I'm proposing is that we help the politicians that are actually in favor of fixing this situation, of which Warren is absolutely at the forefront, do what's needed to remove the scare quotes from the word "have" in your sentence. And yes, that means that a lot of the people who work at the SEC should be in serious trouble, like go-to-jail levels of trouble.

              How do we get more politicians like her? By backing people who don't get their money from Wall Street. For any national election, you can find out exactly who qualifies by that standard over at OpenSecrets [opensecrets.org].

              --
              The inverse of "I told you so" is "Nobody could have predicted"
              • (Score: 2) by Socrastotle on Friday January 29, @05:49PM (2 children)

                by Socrastotle (13446) on Friday January 29, @05:49PM (#1106646) Journal

                You might want to read this [twitter.com]. Yeah it's a Twatter link so I'll give the synopsis. Warren has taken a strong position on this issue. Want to guess which side? Oh yeah baby - Wallstreet all the way. In brief 'Dear SEC - filthy peasants have started eating with the royalty and they're not using proper etiquette. One used a salad fork for his Strottarga Bianco caviar!! I mean are you going to just let people use salad forks to eat Strottarga Bianco!? Are you going to just let us become mindless raving barbarians!? Yeah I didn't think so. Tell me how you're going to stop it, NOW.'

                Judge politicians by their actual actions, not their rhetoric or their committees or whatever. Because all politicians are not only liars but the best liars this country has to offer. This issue is just glorious because there's enough money at play that it's going to drive people to take off the masks. So far we can say for sure that exactly one congressman isn't corrupt: AOC. Ted Cruz is ostensibly right behind her as well, but since he's 100% running for prezzy in 2024 it's *very* possible he's just playing the [not especially] long game.

                • (Score: 2) by Thexalon on Friday January 29, @09:00PM (1 child)

                  by Thexalon (636) on Friday January 29, @09:00PM (#1106699)

                  Reading the Warren's letter to the SEC [senate.gov], I disagree with your characterization, particularly due to this line on page 4 where she's directing the head of the SEC to answer some questions:

                  To what extent did large investors, such as hedge funds like Melvin Capital Management, and their short positions impact the fluctuation of GameStop’s share prices? Did any of these practices violate existing securities laws?

                  That's specifically asking about the 140% short position the hedge funds had and asking if they were illegal, and if so why nothing was done about it.

                  Oh, and the concern about it being a pump-and-dump? She's right to be asking the question: Explaining exactly what's different about these Reddit posts and the stock email spam pump-and-dump game that's been around for decades isn't going to be easy. While of course this whole thing was gloriously bad for the hedge funds who went short, it was very good for somebody who bought GME long at $5 per share last year and is looking to unload it for a profit, and that somebody could very easily pop onto Reddit, convince a bunch of people to do what they did for the lulz, and make (last I looked) approximately 6000% return.

                  And most of the rest of the last page is specifically about how the SEC can use investigation from this incident to prevent market manipulation, which is one of those things that's illegal but vaguely defined and not well enforced.

                  That letter is right along with her rhetoric both as a senator and her academic work about how Wall Street should be working, versus how it actually works: She wants a securities market where the value of what's being traded has something to do with the fundamentals of the company (earnings per share and anticipated revenue from future product offerings), rather than just a flat-out casino. This incident demonstrated that it's far more like a high-end legal casino than anyone on Wall Street would care to admit.

                  --
                  The inverse of "I told you so" is "Nobody could have predicted"
                  • (Score: 2) by Socrastotle on Saturday January 30, @03:52PM

                    by Socrastotle (13446) on Saturday January 30, @03:52PM (#1106892) Journal

                    There was a reason I wrote this [soylentnews.org] post before this happened. It's like somehow I could predict the future... Quoting that brief post:

                    Please make your predictions of what you expect the Biden administration to do today, instead of creating some sort of ad-hoc mental gymnastic rationalization that the media will feed you after the fact.

                    The corporate media and Wallstreet are both turning to the Biden administration, who they donated a fuck ton to, to save them from the peasants. What do you think will happen?

                    And similarly all of this is being sourced from WallStreetBets [reddit.com], a subreddit. Right now Reddit leadership is overtly in support of this. What do you think will be this little subreddit's ultimate fate?

                    This was not a pump and dump by any stretch of the imagination. When shorts short, they eventually need to rebuy to cover the short. In the mean time they pay interest on it and have their money locked up. One guy, DeepFuckingValue on Reddit, noticed the shorts got crazy greedy on GameStop and had shorted more than 140% of its entire floated stock and informed everybody about this. And that's all there was to it. Now Wallstreet is trying to do everything, including illegal actions and calling in every corrupt favor, to avoid taking what would be at the minimum tens of billions of dollars in losses.

                    And you're engaging in "ad-hoc mental gymnastic rationalization" to try to avoid see what's in front of your own eyes. The only reason Warren now wants the SEC to "investigate" is to try to find a way to save Wallstreet. She's corrupt. They're all corrupt.

            • (Score: 2) by FatPhil on Saturday January 30, @05:02PM

              > they won because market fundamentals were on their side

              Don't use the word "fundamentals", it means something specific, and not how you're using it. The funadamentals for $GME are *terrible*, and on the shorters' side, not on the AOR's.
              --
              I know I'm God, because every time I pray to him, I find I'm talking to myself.
      • (Score: 2) by ElizabethGreene on Friday January 29, @03:17AM (3 children)

        by ElizabethGreene (6748) on Friday January 29, @03:17AM (#1106450)

        The exchanges stopped allowing trades on those stocks today.

        There is an important clarification on this.

        The stock exchange halted trading of Gamestop due to volatility. These "circuit breaker" rules have been in place for decades and they are a very good thing.

        Separate from that, several brokerages * blocked opening new positions in Gamestop. That feels wrong, and they will have to make strong arguments defending that decision in the inevitable slew of upcoming class action lawsuits.

        * e.g. TD Ameritrade AKA Think or Swim/RobinHood/TastyTrade are what I heard about.

        • (Score: 2) by Thexalon on Friday January 29, @03:32AM

          by Thexalon (636) on Friday January 29, @03:32AM (#1106455)

          As someone pointed out, Robinhood, which was blocking trades on Gamestop, is part of the same conglomerate as one of the hedge funds that was being adversely affected by the rise in Gamestop's price. Which means that there's a clear manipulation claim.

          --
          The inverse of "I told you so" is "Nobody could have predicted"
        • (Score: 1, Redundant) by darkfeline on Friday January 29, @10:39AM (1 child)

          by darkfeline (1030) on Friday January 29, @10:39AM (#1106538) Homepage

          > The stock exchange halted trading of Gamestop

          They did not halt trading of GME. They halted retail (individual) traders from buying GME. They did not halt retail traders from selling GME, nor did they halt institutional traders (The Man) from buying or selling GME.

          There are a number of hypotheses why they did this, none of which are positive.

          --
          Join the SDF Public Access UNIX System today!
          • (Score: 2) by ElizabethGreene on Friday January 29, @03:47PM

            by ElizabethGreene (6748) on Friday January 29, @03:47PM (#1106613)

            With the utmost of respect, you are wrong. The NYSE stopped trading of $GME several times. You can see the full list here: https://www.nyse.com/trade-halt-historical [nyse.com] and filter it for the GME ticker.

            Volatility based halts are a good thing. They prevent another 1987 black monday style crash, or at least slow it down enough for humans to take a breath.

            That said, I don't have any good arguments for why e.g. RobinHood should have blocked trading. I firmly believe that was a mistake and it will cost them dearly.

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