Stocks and Trading Thread - Channeling your inner Mono

[Habbaku]

Today is the day shorts are meant to hit the end of the road and have to buy.

I think you're still confusing short selling and put options.

He might be elsewhere, but at least in this situation he's accurate. Today is supposed to be the day that the prophecy foretold as the forced-buy to cover all the short positions that other hedges have taken.

[garbon]

Another worrying example is the cognitive dissonance between the below and the fact that these individuals are being encouraged by the current richest man in the world.

https://www.theguardian.com/business/2021/jan/28/gamestop-fun-turns-deadly-serious-reddit-wallstreetbets

"You're a firm who makes money off of exploiting a company and manipulating markets and media to your advantage," the poster writes to Melvin Capital, the most prominent of the GameStop short-selling hedge funds. "I dumped my savings into GME [GameStop's trading symbol], paid my rent for this month with my credit card, and dumped my rent money into more GME. This is personal for me, and millions of others. I'm making this as painful as I can for you."

[Tamas]

Another worrying example is the cognitive dissonance between the below and the fact that these individuals are being encouraged by the current richest man in the world.

https://www.theguardian.com/business/2021/jan/28/gamestop-fun-turns-deadly-serious-reddit-wallstreetbets

"You're a firm who makes money off of exploiting a company and manipulating markets and media to your advantage," the poster writes to Melvin Capital, the most prominent of the GameStop short-selling hedge funds. "I dumped my savings into GME [GameStop's trading symbol], paid my rent for this month with my credit card, and dumped my rent money into more GME. This is personal for me, and millions of others. I'm making this as painful as I can for you."

Well yeah but Musk got rich on selling services and products (and doing that with good marketing). Yes he rode the previous stock craze to the top but he didn't instigate it.

People are hating on the reckless unfair gambling that is allowed unpunished for Wall Street and the rich in general, who are operating a rigged game disguised as open and fair. And I think what really got the anger flowing is that the "elite's" reaction to a group of individuals exploiting the rigged game to the "elite's" disadvantage has been EXACTLY as bad as their worst dectractors thought it would be.

Now of course, trying to make a crusade out of stock speculation is silly and what's happening is clearly a game of musical chairs. But I think Wall Street's handling of this, especially with the crap pulled yesterday, plus the broad media campaign before it are despicable and they deserve all the hate directed toward them.

[Zoupa]

You seem to be worrying about weird things, garbon. I don't think the salient points to this story are nihilism and Musk, but more how the game is blatantly rigged against the average Joe on Wall Street.

[Tamas]

https://gizmodo.com/google-deletes-100-000-negative-reviews-of-robinhood-ap-1846156699


Well we don't want an unreliable manipulative service handling money for their customers be disadvantaged by being known as unreliable and manipulative, do we.

[Tamas]

You seem to be worrying about weird things, garbon. I don't think the salient points to this story are nihilism and Musk, but more how the game is blatantly rigged against the average Joe on Wall Street.

Exactly, and as I said, it is astonishing how seemingly little it took for this to be admitted in public, in practice.

What it makes me think is that despite the 2008 crisis, these various funds and banks are exactly as insanely leveraged in stupid shit as then, except maybe not specifically in mortgages.

[Josquius]

Totally agreed with Tamas.
Not many people hate the rich just for being rich. Musk got to where he is for actual innovation and clever marketing. He is really trying to push forward civilization with his space stuff too. This is absolutely the kind of thing that should see success for you.
As opposed to the shorters who are looking to profit from driving a company that employs 10s of thousands of largely poor young people into the ground.

[alfred russel]

Totally agreed with Tamas.
Not many people hate the rich just for being rich. Musk got to where he is for actual innovation and clever marketing. He is really trying to push forward civilization with his space stuff too. This is absolutely the kind of thing that should see success for you.
As opposed to the shorters who are looking to profit from driving a company that employs 10s of thousands of largely poor young people into the ground.

If your company goes bankrupt and blames the people shorting stock, and you buy that, you are a fool. You are the sort of person I would want to short, but Americans aren't allowed to short people these days (since 1865 anyway).

[Sheilbh]

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[garbon]

You seem to be worrying about weird things, garbon. I don't think the salient points to this story are nihilism and Musk, but more how the game is blatantly rigged against the average Joe on Wall Street.

But we already knew that the economic structure is set up in such a way that if favors those who already have the money. If it wasn't, we wouldn't have the terrible degree of wealth inequality that we have.

This example to be seems to have at its core a foundational narrative about how this is the little guy sticking it to the billionaires but that doesn't appear to be true and as Tamas said "trying to make a crusade out of stock speculation is silly and what's happening is clearly a game of musical chairs".  It is definitely even sillier when one of the key figures encouraging you is the wealthiest individual alive. So you have another situation where social media and a wealthy guy, are encouraging people to engage in a) risky behaviors and b) engage in fantastical narratives about fighting the good fight.

After all, what's going to happen to the individuals who elect to pay their rent on their credit card so they can put their money into the stock and #holdtheline? The poor get poorer and victimization complex escalates.

[garbon]

Totally agreed with Tamas.
Not many people hate the rich just for being rich. Musk got to where he is for actual innovation and clever marketing. He is really trying to push forward civilization with his space stuff too. This is absolutely the kind of thing that should see success for you.

They probably should. It is heartbreaking to think about how much wealth a single individual can have, while we having people dying because they can't afford food/healthy food, healthcare and/or a place to live.

As opposed to the shorters who are looking to profit from driving a company that employs 10s of thousands of largely poor young people into the ground.

Gamestop is a piece of shit company that exploits its employees and is overly reliant on a dying business model. I don't think many will be sad to see it go.

[alfred russel]

After all, what's going to happen to the individuals who elect to pay their rent on their credit card so they can put their money into the stock and #holdtheline? The poor get poorer and victimization complex escalates.

There are always suckers. In the past these people invested in snake oil, land speculation schemes that turned out to be swampland, or enrolled in Donald Trump's real estate university. They aren't really victims, they are just stupid, and like previous generations of stupid, they will be bitter, but that bitterness will die with them.

It is better for them than before because right now we have an eviction moratorium.

[The Minsky Moment]

3) Over rehypothication is problematic because in a crisis event collateral that is supposed to there has already been moved and lent out, perhaps multiple times.  This was one of the problems that manifested in the 08 crisis which led the SEC to put some limits on it - but arguably not enough.

But isn't that a problem with rehypothecation rather than with shorting +100% of the float?

Yes.  The only issue with shorting so much of the float is that if there is a successful squeeze the effects will be heightened because of the scramble to secure shares to close out the shorts.

[garbon]

Totally agreed with Tamas.
Not many people hate the rich just for being rich. Musk got to where he is for actual innovation and clever marketing. He is really trying to push forward civilization with his space stuff too. This is absolutely the kind of thing that should see success for you.

They probably should. It is heartbreaking to think about how much wealth a single individual can have, while we having people dying because they can't afford food/healthy food, healthcare and/or a place to live.

As opposed to the shorters who are looking to profit from driving a company that employs 10s of thousands of largely poor young people into the ground.

Gamestop is a piece of shit company that exploits its employees and is overly reliant on a dying business model. I don't think many will be sad to see it go.

One oddity I've realised is that with the current state of the Republicans, I've drifted further and further to the left as I've aged. Actually, I think that's what Tim said the other day too!

[Syt]

Totally agreed with Tamas.
Not many people hate the rich just for being rich. Musk got to where he is for actual innovation and clever marketing. He is really trying to push forward civilization with his space stuff too. This is absolutely the kind of thing that should see success for you.

They probably should. It is heartbreaking to think about how much wealth a single individual can have, while we having people dying because they can't afford food/healthy food, healthcare and/or a place to live.

This. I think if you work hard or have a groundbreaking business model you deserve to make money from it and get rich. But I believe the increasing agglomeration of wealth in the hands of a few is not a good thing, not least for the economy. Maybe I'm naive, but I feel putting some of that money into the hands of people who will actually spend it can't be anything but a stimulus for the economy. That can be private individuals who use it for consumption, or the state who can use the money for infrastructure, education etc.