mopgoblin on 29/1/2021 at 20:46
If reddit nerds hadn't spotted the fund exposing themselves to this kinda risk by selling an absurd excess of ghost shares, another big nasty share-tradey entity probably would have. It's part of how the stock market works, the main reason a lot of people are getting shitty about it is that this time it's not billion-dollar entities doing the punishing. If you wanna blame someone, it's 1) fund managers and 2) neoliberal capitalism
SubJeff on 29/1/2021 at 23:57
You really think they'd normally get caught with their pants down like that? I don't think so and the reason I don't think so is the rise in price is nuts, which means the amount of money going into this is inordinate compared to anything your "nasty share-tradey entity" would put into a single stock.
Gryzemuis on 30/1/2021 at 00:23
You don't understand what price is.
When there are relatively few shares being traded, small amounts of trade can have an extaordinary impact on stockprice. Especially when everybody buys, and nobody is selling.
Those hedgefunds were so sure of their scam (talking and manipulating the price down), that they took huge short positions. They went short for more stock than exists!! And they went short naked. Meaning they didn't buy any stock to cover their position. So when at the due-date the price is higher (higher than what they gambled it would be, after they did their usual manipulation), they need to *have* the number of shares they promised.
And remember, they need to own more shares for that, than actually exist. So the hedgefunds *need* to buy shares themselves now. To cover their position. And when they buy, price goes up. Against their own interest. That's the beauty of the plan.
That is why it is an outrage that Robin Hood stopped small investors buying more stock. The hedgefunds want to be the only ones able to buy all the available stock now. So they can cover their position, while keeping price as low as posible. Even then they have a problem, because there just isn't enough stock in the world to cover their position.
That's why "diamond hands" are so important now. Everybody has to wait until the due-date for the short options of the hedgefunds. Because it is guaranteed the shit will hit the fan.
I got zero symphatie for hedgefunds. These are not pensionfunds. These are not funds for the litle man to invest his savings. These hedgefunds are scumbag companies, doing whatever cheating and manipulating they can, to make rich people richer. Fuck em.
Gryzemuis on 30/1/2021 at 00:46
Another fun thing. Remember recently I called the Democrats something like: "ultra-conservative, ultra-capitalistic assholes"?
One of the hedgefunds involved is Capital Securities. The redditors are using a free trading service called Robin Hood. How can trading be free, you ask? Well, it turns out Robin Hood sells the trading data for all those free trades. To hedgefunds. So that those hedgefunds have a better understanding of what the market is doing. Basically they have information about what the little man is doing in the market. So they can better manipulate the market. And screw the little guy.
Robin Hood sells their data to Citadel Securities. So Citadel is the real customer of RH. Not the little people. So that's why RH stopped their little traders from buying more stock. To help their true customer, Citadel.
That's cheating, isn't it? Why isnt the goverment protecting the free and open market? It turns out some lady called Janet Yellen has done 3 speeches for Citadel during the last 2 years. And got paid $810k for it. Who's Yellen? She's Biden's new secretary of the treasury. Make a wild guess who's side the government is gonna take. The hedgefunds or the little guys?
Now I wish Hillary had beaten Trump. But when she said in 2016 to a room full of Wallstreet bankers: "don't worry, I got you covered", she was dead serious. So was Obama. Biden will be no different.
PigLick on 30/1/2021 at 02:03
I bet it was more like Citadel calling up Robinhood and saying "put a stop to this". Either way its still shitty, and really gives an insight about the crapness of capitalism.
Starker on 30/1/2021 at 02:20
Democrats are certainly friendly to big business, as are most politicians, and deserving of a lot of criticism. But let's not pretend as if there is no meaningful difference. It was under Democrats that Dodd-Frank came into existence and it was under Republicans that significant portions of it were rolled back. Democrats established the Consumer Financial Protection Bureau, Republicans sought to cripple it.
Now, that is not to say there aren't conservative Democrats -- there certainly are, but most of them are bog standard centrists or at least not that far right of centre. They want a capitalist state with some regulation on its worst excesses and some welfare for people who are at the bottom of it. And there is also a more progressive wing who would like things like universal health care, green energy and faster phasing out of fossil fuels, raising minimum wage, free college, campaign finance reform, prison reform etc, which are to some degree supported by the centrists (at least when it's not too inconvenient for them politically).
Kolya on 30/1/2021 at 02:24
I don't know why some nerds buying gamestop shares highlights the corrupt system to so many people and not the 2008 financial crisis or simply the fact that huge profits are created in this business without anything being produced, merely by pushing numbers around. But if it does, all the better.
catbarf on 30/1/2021 at 03:09
Quote Posted by Starker
But let's not pretend as if there is no meaningful difference.
I don't generally see the behavior of Democrats brought up to equate them to Republicans. It's more to point out that their take on neoliberalism isn't to reform broken or stacked systems so much as to patch them over. Their narrative is always that someone is abusing the system, not that the system is broken.
The more progressive wing you refer to doesn't have much traction within the party. They've been advocating for those things you mentioned for at least the last fifteen years, and it hasn't gone anywhere. I mean, that's where Sanders's base came from and the rest of the party hated his guts.
And the point here is that a Democrat as president doesn't mean this is going to lead to reform that favors the little guy. Democrats favor big business too, even if not to the same degree as Republicans.
catbarf on 30/1/2021 at 03:13
Quote Posted by Kolya
I don't know why some nerds buying gamestop shares highlights the corrupt system to so many people and not the 2008 financial crisis
I think part of it is framing this against the 2008 crisis. Namely that nobody went to prison over '08, but a bunch of Redditors turn the tables on a market-manipulating hedge fund and they're being outright demonized on national TV. A lot of people are still angry about '08, angry about the economic downturn of the last year, angry at hedge funds gaming the system (worth pointing out that their goal was to push Gamestop into bankruptcy, which would mean a lot of people getting fired), and just plain
angry at the current state of affairs. This is a convenient outlet.
But when it comes to hedge funds- and I cannot stress this enough- fuck 'em.