GameStop Is Rage Against the Financial Machine • Hacker News Board

Re: GameStop Is Rage Against the Financial Machine

#641

Post by chrisseaton » Thu, Jan 28, 2021, 12:58 AM UTC

fragmede wrote: post #624

chrisseaton wrote: post #580

Earlier quoted context omitted.

I have a pension from my tech job. Almost all professional full-time jobs offer pensions. It might be in the form of a 401k in the US, but a 401k is just another kind of pension.

They're both forms of retirements savings, but a 401k is a totally different form of retirements savings from a pension.

I don't know why people get confused about this! It's a fund to give you income in retirement. That's a pension! You can have both defined-benefit and defined-contribution pensions. Not all pensions are defined-benefit: 401(k) is a defined-contribution pension.

Wikipedia say it's a pension:

> a 401(k) plan is an employer-sponsored defined-contribution pension

https://en.wikipedia.org/wiki/401(k)

The US Code also says it's a pension - 401 is 'Qualified pension, profit-sharing, and stock bonus plans' and 401(k) is covered under the 'qualified pension' clause ('qualified' meaning the same as 'defined contribution' in this case.)

If it looks like a pension and quacks like a pension and is called a pension in law and is called a pension in non-technical resources like Wikipedia then... it's a pension!

Re: GameStop Is Rage Against the Financial Machine

#642

Post by cbozeman » Thu, Jan 28, 2021, 12:59 AM UTC

joseph_grobbles wrote: post #627

cbozeman wrote: post #623

Earlier quoted context omitted.

It wasn't David vs. Goliath. CNBC, Financial Times, WSJ, etc. can't tell you what it really was, because they're beholden to all these Wall Street types. They don't get stories unless their relationships are cordial. This was arrogant idiot billionaires vs. autistic retards of the Internet, and the arrogant billionaires in this case (Melvin Capital) had the chance to walk away when they got their $2.75 billion capita…

The assumption that this is a bunch of robin hood everyday-man sorts conspiring on Reddit seems incredibly naive. The GameStop play (as with BBB, AMC, Express, etc) are classic pump and dumps, albeit with a short-squeeze magnifier (basically equal to a DDOS amplification). And if you really traced back to the origin, I highly doubt you're going to find some Joe Nobody -- you're going to find some very well financed,…

> you're going to find some very well financed, planned player.

You're going to find Dr. Michael Burry. He started buying GameStop under his Scion Capital shop back in June 2020, and /u/DeepFuckingValue on Reddit / Roaring Kitty on YouTube made the case for GameStop as far back as June of 2019.

EDIT: Corrected "Mr." to "Dr.". Corrected the timeline of DFV / Roaring Kitty to the correct dates.

Re: GameStop Is Rage Against the Financial Machine

#643

Post by j_walter » Thu, Jan 28, 2021, 12:59 AM UTC

wolverine876 wrote: post #629

How does this differ from other populist manipulation via social media? We've seen this technique used repeatedly in many domains. IMHO, it looks obviously the same in many ways. It's very effective and we should have anticipated that it would be used to move markets. I expect people on HN to recognize it. The question is, what will we do about it? It's tearing society apart and now it looks to damage our economy too…

Big difference. The OP clearly stated his positions in the stock and laid out a strategy for why it would work. Very different than a mass email campaign meant to boost penny stocks.

At the end of the day though...a lot of people are going to be left with a lot of worthless stock that they paid a lot for.

Re: GameStop Is Rage Against the Financial Machine

#644

Post by spoonjim » Thu, Jan 28, 2021, 1:00 AM UTC

AdmiralAsshat wrote: post #20

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes. For the record, I’m still angry about the way workers were ripped off in Britain more than three decades ago, and about the way the little guy ended up bearing the brunt for the financial implosions of 2000 and 2008. But it looks horribly to me as though the same thing is going to happen again — and…

The /r/ guys who are last to the party will lose more money than was made by all of the people before them. It won’t be all hedge fund guys covering.

Re: GameStop Is Rage Against the Financial Machine

#645

Post by user3939382 » Thu, Jan 28, 2021, 1:00 AM UTC

wolverine876 wrote: post #629

How does this differ from other populist manipulation via social media? We've seen this technique used repeatedly in many domains. IMHO, it looks obviously the same in many ways. It's very effective and we should have anticipated that it would be used to move markets. I expect people on HN to recognize it. The question is, what will we do about it? It's tearing society apart and now it looks to damage our economy too…

> The question is, what will we do?

IMHO the time to ask that question was when Congress reversed the rules allowing them to trade stocks.

Or when it was decided it was okay for Wall St to spy on limits and front run the trades of retail investors by having their order flows sold to Wall St through the only accessible means of trading

Or when you have the entire SEC staffed through a revolving door of Wall St insiders that won't prosecute anyone

Or when Wall St gets bailed out for creating a bubble while 5 million people get kicked out of their homes

> allowing themselves to participate in mob psychology

By your definition are democratic elections "mob psychology"? If thousands of common folk decide they like GameStop and want them to succeed suddenly that's a problem but none of the above is?

With all due respect your perspective on what's going on is totally backwards. It is a GOOD thing. The masses SHOULD have control over the markets.

Re: GameStop Is Rage Against the Financial Machine

#646

Post by ryandward » Thu, Jan 28, 2021, 1:00 AM UTC

sceew wrote: post #630

ta1234567890 wrote: post #384

This is a great example of how the stock market is not about fundamentals, just like Bitcoin, it’s all about popularity and perception. In the end, people don’t care if the “stock is really worth” the price, they only care if themselves or someone else are willing to pay the price, nothing else really matters.

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” - Ben Graham This mostly holds true depending on you define 'long run.'

John Maynard Keynes quips that "in the long run we are all dead."

Re: GameStop Is Rage Against the Financial Machine

#647

Post by svachalek » Thu, Jan 28, 2021, 1:01 AM UTC

jodrellblank wrote: post #538

restingrobot wrote: post #440

Earlier quoted context omitted.

You're forgetting the stock is 125% over shorted. There literally isn't enough stock for shorts to cover their current positions. That's why there is potential for infinite, (huge) gains as long as everyone holds.

What I've been wondering is, why do people think the 125% over-shorted has to expire all at the same time and imminently? While there isn't 125% available to buy in one go, there is trading happening, HedgeFund2 can be buying and returning their loaned shares this week, HedgeFund3 can be buying and returning theirs next week, HedgeFund4 the week after, and at no point does any group need to buy 125% of available shar…

People are confusing the options trading that's going on as part of this with the shorting. Options do have expiration dates, but shorts just charge interest. The thing is if you own a stock and it goes down, worst case is you lose 100% of your money. If you short a stock and it doubles, you've lost 100% but there's no barrier here, the loss could keep going up to 200% or more. If you can't pay it back, the broker is on the hook for this money and therefore they have the power to actually force you to close the short position. You don't control the timing on that. It's the kind of situation where people start jumping out of windows on Wall St.

Re: GameStop Is Rage Against the Financial Machine

#648

Post by taurath » Thu, Jan 28, 2021, 1:03 AM UTC

wolverine876 wrote: post #629

How does this differ from other populist manipulation via social media? We've seen this technique used repeatedly in many domains. IMHO, it looks obviously the same in many ways. It's very effective and we should have anticipated that it would be used to move markets. I expect people on HN to recognize it. The question is, what will we do about it? It's tearing society apart and now it looks to damage our economy too…

> It's tearing society apart and now it looks to damage our economy too.

I don’t see how in this case. If anything it’s revealing the casino that is a huge percentage of our economy as what it is. There are trillions of dollars being bet every day, and frankly this is taking money from hedge funds who “always win no matter what”. Robin Hood indeed.

90% of the stock market is owned by 1% of the population. We have the highest wealth gap in the countries history except maybe the 1920s. Those who benefit from the system control the system - I’ll personally sit here and cheer for the people who managed to get a piece.

And @ your point - you want a rational system where prices are set per the real value of the company, or its future value. This has not been the case since at minimum 1980. The market is currently a casino that happens to capitalize companies, and with 0% interest rates it’s a economy wide Ponzi scheme because everyone with money has to buy high risk stocks to get a real return. WSB or not I do not think a depression due to a financial or currency collapse is almost likely at this point.

Re: GameStop Is Rage Against the Financial Machine

#649

Post by sethammons » Thu, Jan 28, 2021, 1:03 AM UTC

ryandward wrote: post #646

sceew wrote: post #630

Earlier quoted context omitted.

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” - Ben Graham This mostly holds true depending on you define 'long run.'

John Maynard Keynes quips that "in the long run we are all dead."

he also said, "the market can remain irrational longer than you can remain solvent."

Re: GameStop Is Rage Against the Financial Machine

#650

Post by CrazyDave » Thu, Jan 28, 2021, 1:03 AM UTC

mancerayder wrote: post #511

stephen_greet wrote: post #375

Earlier quoted context omitted.

I think the author is arguing here that the solution to combating institutional gambling via trading is not to allow retail investors to also gamble. Should someone who has no idea what they're doing be able to leverage themselves up 100X to buy a call/sell option by pressing a few buttons in Robinhood because they read about YOLO stock on Wallstreetbets? As someone who has lost a lot of money by following the Reddit…

It ruffles my feathers when I read that we should "combat institutional gambling via trading and not allow retail investors to gamble." Who died and made the author a moral decision-maker? Is the problem that gambling is a 'sin' or is the problem that we're TRULY worried about people losing all their money and we want to protect them from themselves? Do you want to put them in prison when they bet money on fantasy fo…

Irresponsible gambling costs the government money because we have safety nets. This applies to both institutions and individuals. The government needs to bail out banks and provide social welfare.

It's not a moral issue to me. Gambling through leveraged stocks should to be taxed more heavily to offset its cost. Something like the rate on lottery tickets.