demagogue on 30/1/2021 at 03:32
I've had a lot of thoughts about this and have posted a lot on it, but maybe this (rephrasing it) sums it up...
I had the idea that blowing their savings to bankrupt an asset management company was the gameplan from the start. I'm no fan of AMCs, but a whole movement built on nursing resentment and hurting yourself just to hurt your enemies more doesn't sound good for the soul in the long run.
If they cared about games, I think the healthier model is supporting alternative funding sources for innovative games and outlets. I feel like the most immediate fallout of this is that gaming is only going to be considered even more volatile, which will make investors even more wary, and that plays into the hands of the most conservative, focused-grouped, soulless studios and outlets, and anyone else trying to do anything innovative will struggle to find financing. I got the feeling this was a phyrric victory.
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Edit: I have a slightly different fuck 'em attitude. Life is short and emotional energy & money are scarce. Selfish hedge fund assholes manipulating the market aren't worth people spending their time, energy, and money on just to spite them... They really don't care. And you're not going to see anything you care about coming out of this. GameStop isn't really saved. (I never thought GameStop was good for gamers to begin with, but that's another thing...). The way gaming gets financed is just going to get more locked down to "hedge volatility". The people that got screwed over the most were the final buyers, probably other gamers caught up in the fever. And for a minute here we get a shot of schadenfreude that we lost our money so that they lose everything, but that's not a healthy drug to get addicted to IMO. (And the AMC didn't even lose everything; last I read they just sold a non-controlling share to new co-owners.)
I can sympathize where they're coming from, but any movement built on stoking rage, resentment, and self-harm doesn't jive with me. That time, emotion, energy, and money would be so much better spent on the games and gaming culture themselves, tending to the things that really matter, than blowing your money just to "send a message" to assholes that won't get it and don't care.
Starker on 30/1/2021 at 05:24
Quote Posted by catbarf
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.
If there are any lessons from the last 4 years, then it's that a patch does a hell of a lot more good than another wound. I'm not suggesting that the Democratic Party is dancing to AOC's or Bernie's tune, as the right wing pundits love to dream, but it's not like the progressive caucus has no influence whatsoever. For one example, the US is now targeting zero carbon emissions by year 2050 and trying to get the energy sector off fossil fuels by 2035 and there are concrete plans to help it happen. Already Biden has reinstated a lot of Obama era environmental rules and is looking to improve fuel efficiency standards. And even Obama tried to improve health care and was the first president in decades to do so in any significant manner. Is that enough? Not by a long shot. But it's disingenuous to suggest that therefore the Democratic agenda is somehow ultra-capitalist and ultra-conservative and in the extreme right of the political spectrum. At least a lot of Democrats, even a lot of the more conservative ones like Biden, recognise the need for some change and are open to it instead of actively working against it.
As for big sweeping change and reform, that's easier said than done. A president certainly isn't going to do it these days, especially when they lack popular support and the kind of the bully pulpit FDR had. Also, while they do theoretically have a majority in the Senate, that just means Joe Manchin has become one of the most powerful people in the US and everything more bolder than basic infrastructure hinges on whether the Democrats can successfully please him.
Nicker on 30/1/2021 at 05:26
Quote Posted by SubJeff
That's not illegal, but in any case you're wrong. If you had significant investments in those funds you might have lost money.
Short selling may not be illegal but it is immoral. Same as currency trading.
Yakoob on 30/1/2021 at 11:33
I've been watching this clusterfuck and it's a beautiful dumpster fire. I'm not participating in any capacity but I'm enjoying the memes and sheer panic of billion-dollar hedges lol
Quote Posted by demagogue
.... GameStop isn't really saved ... That time, emotion, energy, and money would be so much better spent on the games and gaming culture themselves, tending to the things that really matter, than blowing your money just to "send a message" to assholes that won't get it and don't care.
I read bunch of posts and saw tons of memes, and you are the aboslultely first person to bring up saving GameStop and gaming culture. This is absolutely not about saving Gamestop or gaming from what I undersatnd; it really could have been any stock (and it is, like AMC as well).
This has one very simple goal: fuck over the hedge fun. There is no nuance. it really is that simple.
And no "poor man" is losing their life savings here. People invested their puny $600 stimulus checks that are now worth $60,000. Even once these goes bust, they're not gonna be homeless. They know what they're getting into.
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 the issue is that after 2008 nothing changed. Sure, there were regulations and stuff put in place, but people who lost their houses still lost their houses, people who couldn't get a job still couldn't get a job... the everyday life of an average joe did not get fixed by the lessons learned.
And as catbarf said, I hear a lot of 2008 comparisons, so I don't think anyone is missing the similarities. One way I've heard it said: redditors are doing to hedgefunds now what hedgefunds did to redditors in 2008
Jason Moyer on 30/1/2021 at 11:56
I still think it's amazing that after hedge funds destroyed millions of people's lives in 08, the GOP still had the balls to run Romney in '12. Then again, Obama's administration was full of hedge fund managers so I guess it was a wash.
demagogue on 30/1/2021 at 12:29
The comparison to 2008 would be something like the education debt bubble.
Redditors didn't do anything to a single hudgefund that hedgefunds did to everyone wiped out by the 2008 shake up, which anyway was about the housing bubble; whereas in this case there is no deeper socio-economic dynamic that this represents. It was practically pure stochastic volatility. A price artificially spiked for a few hours and then collapsed again. The analogy doesn't really work.
I was reading that it will lead to regulations that make it harder for random mass movements to arbitrarily spike the volatility of a market, but I don't expect redditors have enough of an attention span to have this happen that often anyway.
Quote Posted by Yakoob
I read bunch of posts and saw tons of memes, and you are the aboslultely first person to bring up saving GameStop and gaming culture. This is absolutely not about saving Gamestop or gaming from what I undersatnd; it really could have been any stock (and it is, like AMC as well).
This has one very simple goal: fuck over the hedge fun. There is no nuance. it really is that simple.
And no "poor man" is losing their life savings here. People invested their puny $600 stimulus checks that are now worth $60,000. Even once these goes bust, they're not gonna be homeless. They know what they're getting into.
I basically agree with both of your points, so I can clarify what I was saying. One, over $10+ trillion is traded in average volume every single day. Just targeting one AMC at random, throwing a dart at a single drop in the ocean, is beyond meaningless if that's what all of this was really all about. I mentioned gaming because IMO that's what this
should be about. Financial forces aren't these abstract voodoo forces that have to be exorcized. They're people trying to make a thing, and wanting to buy a thing, and all of the social, economic, political, and cultural elements that go into that. I said "if they cared about gaming" to make the point that of course they don't care about gaming. They have a religious world view about a heaven that doesn't exist and pointless rituals that don't get them any closer to it. It would have been better, my point was, if they had actually cared about the industry they were rummaging in. Because that actually is the little slice of heaven we can hope to achieve on earth within our feeble powers. We just have this and nothing deeper.
As for people not losing their life savings, I was meaning to say it like that and if I exaggerated it that was my mistake. I meant to word the point more like people blowing their summer savings (not their whole life savings), and for what? I don't think it changes the point all that much. I recognized that they got off on using their money for this (I did say it's like a drug hit), but my point there is that this isn't a healthy addiction, even if they say they're getting something for their money. And if you took away the endorphin hit, it's just burning money with no value created for it; no games, no widgets, no utility, no salve for the soul, no nothin'. Just resentment signaling, getting off on cutting themselves so everyone can see how eager they are to bleed for this and watch the big man fall (wank, wank, wank...). They could spend their summer savings every year and artificially spike every market for a few hours if they put their minds to it, and would they get off on it the 10,000th time as much as this time? But there's nothing illegal about it (for now), and people are allowed to lose money to make others lose more.
And my point then was, if they had cared about heaven on earth, like I think people should, that money would have been better spent buying games and supporting devs than some quasi-religious ritual where that money just disappears into some derivative benefiting some inscrutably random allotment of people and literally nothing else of cosmic benefit, and an AMC had to sell partial ownership to continue what it's always done along the way.
Gryzemuis on 30/1/2021 at 13:06
People don't need to lose money here.
The point is this:
Suppose fund X has sold 1000 call-options for a target-price of $50, on March 1st. That means someone else (let's call them B) has the right to buy a 1000 shares from X, for $50, on March 1st. If the price on March 1st turns out to be higher, say $200, B will certainly buy those 1000 shares. B pays $50 and sells immediately for $200. But X has to have those shares, otherwise it can't sell them, and can't meet its obligation.
It's starting to look like the price will be over $50. So X better starts making sure it has those 1000 stocks. It doesn't yet. X went "naked", meaning it had not bought/owned any stock to cover its options. So now they have to make sure they do have them. Before March 1st. The only way to get them, is buying them on the stockmarket. Driving the price up. Making the situation worse for them.
So all the redditors have to do is: buy stock for less then the expected price on March 1st. And keep them. Keep them as long as possible. And start selling just before March 1st. Or just after, as long as they sell for more then they bought for. In a perfect scenario, all reditors put their shares up for sale one hour before closing on Feb 28th. The hedgefunds *have* to buy them then. They *have* to have those shares to cover their arses.
So suppose X has enough shares on March 1st. Stockprice is $200. B buys all their 1000 shares from X. To make a profit from this deal, B will slowly start selling their shares. Driving the price down. No redditor has stock anymore (we hope). Hardly anyone will be buying after March 1st. So the price is expected to drop after March 1st. How much? Nobody knows. But if B can sell a substantial amount of their stock for more than $50, they make a profit.
The tricky part is what happens in the last hours (or days) before March 1st. But the hedgefunds don't only need to buy all available stock on the market, they actually need to have 140% of all existing stock! (Catbarf gave that number 140%, I don't know if it is accurate). So all redditors will have a chance to sell their stock for a high price just before March 1st. The risk on paper for the redditors is not that big. Not everyone is gonna lose their money. As long as they don't start selling en mass long before March 1st (not selling because of this, is called "diamond hands").
The hedgefunds made a few mistakes. They sold more call-options than there are stock. They went naked. But what triggered this is the fact that the amount of outstanding call-options is public. I don't know if this happened in this case, but hedgefunds do something extra when they go short. They announce it to the world. They mention it in interviews on TV. They make sure that everyone hears: "Wallstreet thinks GameStop will go broke soon". That causes people to be careful investing in GameStop. And that drives the price down. And that helps guaranteeing that the hedgefund doesn't need to own and sell the stock for those options. That's pure market-manipulation. And it happens all the time. But the big guys get away with it every time. But not this time.
I'm just an amateur here. I'm only trying to explain what I've heard and read. I'm sure I am incorrect and incomplete in some of my statements. If any of you know better than me, please correct me in what I wrote. TIA.
demagogue on 30/1/2021 at 13:16
I think it's optimistic to think that redditors would be that strategic about it, but for my part at least my point isn't really do to with whether they make or lose money. I thought it was an unhealthy addiction (resentment signalling) completely aside from that. Of course it's better all around if people don't lose money for this, so at least it does the least harm.
But you know, the app doing this tried to contain the bleeding by preventing people from loss trading and that just made them even more enraged at "the system".
If people aren't allowed to take others down without harming themselves, you can see how preventing self-harm is a problem.
And you can't win against a religious worldview like that.
lowenz on 30/1/2021 at 13:21
Quote Posted by mopgoblin
2) neoliberal capitalism
You can't force the capitalism being "not neoliberal" nor "financial" :p
When you choose capitalism you choose ALL its forms 'cause they're like neutrinos.
Gryzemuis on 30/1/2021 at 13:31
Quote Posted by Starker
But it's disingenuous to suggest that therefore the Democratic agenda is somehow ultra-capitalist and ultra-conservative and in the extreme right of the political spectrum. At least a lot of Democrats, even a lot of the more conservative ones like Biden, recognise the need for some change and are open to it instead of actively working against it.
And I disagree. Of course the Republicans are 10x worse than the Democrats. And indeed the Democrats have a whole range of different opinions in them. But that doesn't make them less capitalists.
The 2008 crash happened partially because Bill Clinton had relaxed and removed a lot of regulations for Wall Street. Obama didn't really do anything to put back those restrictions. Hillary Clinton had made sure that all bankers understood that she would not do anything against their interests. We haven't seen yet what Biden will do. But my bet is: he will put some new restrictions in place to limit the power of small investors. And he will do fuck-all to limit the big guys. Regarding the financial market, the Democrats are just as much pro free and unrestricted market as the Republicans. Or very close.
From a European perspective, both parties have a full-blown capitalistic ideology. The fact that the Republicans, on top of that, are also fascists, doesn't diminish the fact that the Democrats are 110% capitalists.