Business, Economics, and Taxes: Capitalism. Yay? >=(

[dxmnkd316]

Interesting, the volume is showing signs of drying up. 100M fewer shares than yesterday. That's... a big drop. Maybe the funds did get out. Right? Or the bailouts from the larger funds are enough to keep them afloat until the rally dies. Hell, I wouldn't be surprised if they shorted the stock again. I guess it all depends on what the contract prices were doing. Which I haven't followed at all.


Edit: And I see the price is down to $300, slowly dropping. People are getting out. The "HOLD FOREVER"s are selling and fucking the rest of them. Smart.

 

[dxmnkd316]

Saw this posted by Southpaw:
"Reuters reports some large funds are selling their long positions to cover and dragging down the broader market. That makes me wonder whether part of the story here is some prime brokers were too lenient about issuing margin calls early on."

Interesting.

 

[bronconick]

CNBC's David Faber said he is hearing a number of hedge funds are in similar trouble that Melvin Capital saw in its GameStop $GME and may need to be bailed out.

$600 should be good. ****faces.

 

[dxmnkd316]

Yeah, even if this doesn’t work in the short term there are seeds being planted for the long term.

https://twitter.com/SenWarren/status/1354520784765673472?s=20

Hmmm...

 

[Kepler]

Friend of mine who was an Econ PhD sent me this:

The Fed might have to bail out the Mets.

If you're talking about the hedge fund shorts vs. the twentysomething Robinhood longs, yeah, I have been following it.

All of the on-line brokerages like TDAmeritrade had to drop their buy and sell fees when Robinhood started offering free transactions. Then, with free trades, all of the recently laid off, twentysomething baristas started spending their stimulus checks and enhanced unemployment benefits on the FAANG stocks, Tesla, and any other investment that they thought was cool. So now we have a NASDAQ bubble like 1999. Thanks, kids.

I can't see how the kids are going to win this one though. Hedge funds are considered "essential", right?

 

[Kepler]

Some great posts on the reddit thread:

The economy will BOOM after this clears as we will all have money to spend on paste and safety scissors and whatever else. We will spend on the economy instead of hoard it like a miser dragon.

GameStop is going to be Taco Bell from Demolition Man

Somebody has been reading about the investigation:

Got 3.5K in the transfer pipeline as soon as it hits RH account it's going straight to GME because I believe and love the company.

The sticky:

Reddit's Engineering team has asked us to rotate threads more frequently because our load destroying their backend.

Keep up the good work!

 

[French Rage]

Saw this posted by Southpaw:
"Reuters reports some large funds are selling their long positions to cover and dragging down the broader market. That makes me wonder whether part of the story here is some prime brokers were too lenient about issuing margin calls early on."

Interesting.

Yeah I imagine a large part of this is due to margin calls. Also, do they do mark-to-market for options? If that's the case, even a longer term short on GME or one of the others over a proper time frame could be affected if they were bought on margin and they have to cover the updated value of the options.

 

[Handyman]

Yeah they need this to hold out til Friday or the squeeze won't work. They were too open about discussing it and so the retail buyers they needed to keep feeding the beast are staying away. IN THEORY if the price dips low enough you might see some jump in and hope for a short term (and much less lucrative) gain before the crash but I don't see it happening.

That said I agree with this take on why the Retail Model is not going away and is going to be a headache for hedge funds: https://twitter.com/CNBC/status/1354516023039258624

The CNBC types like to pretend it is a bunch of nerdy incels sitting at home just day trading between Fortnite rounds. In reality these guys are doing the research and are finding the values in much the same way the hedge funds are but the difference is it might hundreds if not thousands of people from all different sectors and walks of life doing it. They won't always try and crash the market like this one, but they will be able to fleece the market just as well as Melvin can. The information is out there and readily available and there is a lot of people with a lot of time on their hands right now. You put together a good group of 2-300 people around the country/world and you can do a lot of damage. Collectives and co-ops with people who put in the time to research can be fruitful and won't have to pay out the fees a brokerage house or hedge fund would charge.

That is why the CNBC and WSJ types are coming out hard against this stuff. If anyone can do it, what do they need them for? It also shows why the market is an awful indicator of how the economy is going. The market is a long term ponzi scheme.

JMHO...worth a whole lot less than the $2.69 I paid for my battery charging stock that is not over $60 ;^)

 

[French Rage]

Yeah they need this to hold out til Friday or the squeeze won't work. They were too open about discussing it and so the retail buyers they needed to keep feeding the beast are staying away. IN THEORY if the price dips low enough you might see some jump in and hope for a short term (and much less lucrative) gain before the crash but I don't see it happening.

That said I agree with this take on why the Retail Model is not going away and is going to be a headache for hedge funds: https://twitter.com/CNBC/status/1354516023039258624

The CNBC types like to pretend it is a bunch of nerdy incels sitting at home just day trading between Fortnite rounds. In reality these guys are doing the research and are finding the values in much the same way the hedge funds are but the difference is it might hundreds if not thousands of people from all different sectors and walks of life doing it. They won't always try and crash the market like this one, but they will be able to fleece the market just as well as Melvin can. The information is out there and readily available and there is a lot of people with a lot of time on their hands right now. You put together a good group of 2-300 people around the country/world and you can do a lot of damage. Collectives and co-ops with people who put in the time to research can be fruitful and won't have to pay out the fees a brokerage house or hedge fund would charge.

That is why the CNBC and WSJ types are coming out hard against this stuff. If anyone can do it, what do they need them for? It also shows why the market is an awful indicator of how the economy is going. The market is a long term ponzi scheme.

JMHO...worth a whole lot less than the $2.69 I paid for my battery charging stock that is not over $60 ;^)

So basically the "efficient market" people are upset about a more efficient market.

 

[Kepler]

WSB in one image (not from WSB):

 

[Handyman]

So basically the "efficient market" people are upset about a more efficient market.

That seems to be what it is about. It isnt the first time...in the early 00's when day trading online became a big deal I remember a lot of the same whining. (my buddy the econ major was big into it as was a boss) The difference with that was most people didn't have the means to really research what was going on. They found a stock they thought looked right or heard mentioned on TV a few times and threw money in. (like the people before '08 who though Jim Cramer knew everything) Then they waited and pulled out as soon as they hit a number. It is like playing craps or roulette only without any real strategy or research into the game or how it has been playing out.

Now you have a lot of people that are hardcore analytics nerds with high speed internet and the time to research. They arent splashing the board and crossing their fingers they are basically watching the roulette wheel, seeing the trends in the long and short term and betting based on what is likely to be the next roll. What's more, they are taking the "2 heads are better than one" method to the extreme. They are acting like a huge network of computers breaking down the patterns. And since there are a lot of out of work financial sector workers...well they have even more help than before.

It is going to be interesting to watch. The brokerages and funds will adapt but this is the type of stuff that has been formulating all over the place in other businesses. Hell the younger generations have been using this power to try and mold things in the entertainment industry for years. (it is why Rottentomatoes is both super important and a complete and total joke) They screwed up the Trump rally in OK by crowdsourcing. While "Cancel Culture" is a nice buzzword for Right Wingers it actually does happen all over the place. The internet has linked people and turned everyone's high speed internet into a bully pulpit.

 

[Kepler]

I will say one thing. Every person who has been on CNBC today except Powell is someone I wouldn't mind seeing cast into penury. They have to be among the worst people in the world.

 

[SJHovey]

That seems to be what it is about. It isnt the first time...in the early 00's when day trading online became a big deal I remember a lot of the same whining. (my buddy the econ major was big into it as was a boss) The difference with that was most people didn't have the means to really research what was going on. They found a stock they thought looked right or heard mentioned on TV a few times and threw money in. (like the people before '08 who though Jim Cramer knew everything) Then they waited and pulled out as soon as they hit a number. It is like playing craps or roulette only without any real strategy or research into the game or how it has been playing out.

Now you have a lot of people that are hardcore analytics nerds with high speed internet and the time to research. They arent splashing the board and crossing their fingers they are basically watching the roulette wheel, seeing the trends in the long and short term and betting based on what is likely to be the next roll. What's more, they are taking the "2 heads are better than one" method to the extreme. They are acting like a huge network of computers breaking down the patterns. And since there are a lot of out of work financial sector workers...well they have even more help than before.

It is going to be interesting to watch. The brokerages and funds will adapt but this is the type of stuff that has been formulating all over the place in other businesses. Hell the younger generations have been using this power to try and mold things in the entertainment industry for years. (it is why Rottentomatoes is both super important and a complete and total joke) They screwed up the Trump rally in OK by crowdsourcing. While "Cancel Culture" is a nice buzzword for Right Wingers it actually does happen all over the place. The internet has linked people and turned everyone's high speed internet into a bully pulpit.

That's what the subredditors have become. They're just today's version of day traders. For every two that are successful, 998 are going to take a bath and have to explain to mom why they won't be paying rent next month.

 

[Jimjamesak]

The guy I saw on MSNBC saying “Where are the regulators?!?!” was interesting to see. The big firms are definitely spooked.

 

[French Rage]

The guy I saw on MSNBC saying “Where are the regulators?!?!” was interesting to see.

Hooking a left on 2-1 and Lewis.

 

[BassAle]

this dude might be proof time travel is possible
/u/deep****ingvalue

dumped something like $50K into gamestop long calls in 2019, and posted about it on WSB. now worth tens of millions of dollars

 

[Kepler]

That's what the subredditors have become. They're just today's version of day traders. For every two that are successful, 998 are going to take a bath and have to explain to mom why they won't be paying rent next month.

I wonder what the relative ratios really are between the institutional and retail investor models.

Assume the retail model is tulips and we wind up a 1:50 winner/ loser ratio.

But now include all the externalities of the institutional market, and factor in that when the big guys lose they simply roll to the feds and steal trillions from us.

The institutional model may well be worse than 1:50.

 

[Jimjamesak]

Hooking a left on 2-1 and Lewis.

It was a clear black night...

 

[Handyman]

That's what the subredditors have become. They're just today's version of day traders. For every two that are successful, 998 are going to take a bath and have to explain to mom why they won't be paying rent next month.

I think that is antiquated and wrong. First of all most of this stuff isnt being done on reddit that is just stuff like the GME bs. They are playing a game and only the early adopters will have any shot to really do anything of value. (and will likely get in trouble over it since they are open about it) People are communicating in real time and doing quite well at it and are not broadcasting it for the world to see.

What we are seeing with Gamestop is that being weaponized. That is a small subset of what is going on though. It is a big deal because it is taking down Melvin but it is an outlier. It has people scared but most of the people who are doing this kind of stuff aren't trying to burn the market for the lulz.

 

[ScoobyDoo]

The guy I saw on MSNBC saying “Where are the regulators?!?!” was interesting to see. The big firms are definitely spooked.

LOL. We deregulated the fuck out of everything the last (4) years. This is natural cycle. Republicans blow everything up, Democrats tape Humpty Dumpty back together again with Scotch Tape. Republicans blow it all up again.