A lot of little guys are gonna be left holding the bag at the end, though. The stock was probably overvalued at $10. It's definitely overvalued at $400.
People were shorting this stock when it was an order of magnitude less expensive. Isn't it an even more attractive short target now?
Yes, but there's a fairly hefty risk of it rocketing up again before collapsing, which could wipe out such short positions. (Again!)
Be careful what you wish for. The upper classes tend to recover from these crashes much more rapidly than the lower classes do.
Bailouts for big companies owned by the rich, $2k paycheck (if lucky) for the rest.
During previous financial crisis, the government bailout was in form of loans, and buying assets for pennies on the dollars (that government ultimately made profit on). The people getting $2k check, no strings attached, are getting better deal than Wall Street.
I see the subletting analogy, but there's a big difference between subletting an apartment over the summer to minimize your losses (usually for ≤ your rent) and renting all the apartments in manhattan, then subletting them for profit after you corner the market. The former seems fine, and yah, I guess I do think that the latter should be illegal, because it only benefits some wealthy jerk who can afford to corner a m…
Again, it’s not an individual or even one entity doing it. It’s several funds independently doing this.
And what if there is coordination? Are you not following the news today at all?
Parent isn't claiming GME is "real" economics. Parent is claiming GME will help pull down our current fake system, and help the middle and lower classes receive fair compensation from the system. Whether this approach works or not, I don't know. But the status quo isn't tenable for a democratic society. This chart says it all: https://www.epi.org/productivity-pay-gap/
What did happen around 1979 to have such a clear change?
A lot of things happened. Reagan lowered taxes, increasing the incentive to move money out of your buisness and into other investments. Globalism startedly picking up, meaning a lot of wage growth for the lower classes was outsorced to other countries instead of kept in America. The graph doesn’t capture how total employee compensation has risen a bit more than in that graph due to the explosion of costs in the American Medical sector eating up a lot of the potential compensation increase. Perhaps most importantly, Reagan began the attack on unions, resulting in there being less ability on the employee side to argue for increased wages. You could argue the massive money printing starting with the Iraq wars and going through the 2008 crisis has led to a massive funneling of that created money to the upper class, further increasing the inequality, and further exacerbated again by the death on unions meaning workers had less advocates in washington arguing for the lower classes to get a piece of that pie.
Parent isn't claiming GME is "real" economics. Parent is claiming GME will help pull down our current fake system, and help the middle and lower classes receive fair compensation from the system. Whether this approach works or not, I don't know. But the status quo isn't tenable for a democratic society. This chart says it all: https://www.epi.org/productivity-pay-gap/
What did happen around 1979 to have such a clear change?
The only thing more ridiculous than the rise in the GME stock are these attempts to frame this is some sort of culture war. All this is is a bunch of people on an online forum trying to make a quick buck; it's not some grand statement against Wall St. or whatever.
Good. I'm tired of fake Economics where the value of a company or the product is not made from the real value of it, while some yuppies get rich in the proccess. The more they cry, the better. Hope is collapses so "middle" and low class workers can get fair prices of what they earn by doing actual hard work. Because this will create a good crash, dont fool about it. It will harm everyone, but at least this Century wi…
> I'm tired of fake Economics where the value of a company or the product is not made from the real value of it I still don't understand how Tesla is valued so high when they're still figuring out panel gaps.
It's hilarious seeing this comment the day after a busy HN thread titled, "Tesla’s charging stations left other manufacturers in the dust" (https://news.ycombinator.com/item?id=25930253).
Good. I'm tired of fake Economics where the value of a company or the product is not made from the real value of it, while some yuppies get rich in the proccess. The more they cry, the better. Hope is collapses so "middle" and low class workers can get fair prices of what they earn by doing actual hard work. Because this will create a good crash, dont fool about it. It will harm everyone, but at least this Century wi…
> I'm tired of fake Economics where the value of a company or the product is not made from the real value of it I still don't understand how Tesla is valued so high when they're still figuring out panel gaps.
Because the rest of car companies are still figuring out that they even should be figuring out electric.
shorting is identically borrowing. You borrow the stock from someone who owns it, and resell it at the current price. Then later down the road, you buy it back at the lower price and return it to the original owner. You have made money on whatever that difference is. This is not a metaphor, this is how shorting operates. It can easily go over 100% if the person you sell it to also lends it to someone to short (and th…
> Eventually you will need to return that stock you've sold What happens if you don't?
It's not "you" who is doing it, it's your broker. And the reason they will 100% do that is because they want to keep their SEC license. The rest of the problem is between you and your broker, settled in real $.
1. There isn't any one entity that is short 140% of the GME float. 2. If a stock shouldn't be allowed to be sold short past 100% then we should outlaw subletting apartments. Why shouldn't someone be allowed to pay to borrow something, and then rent it out? How is that manipulative in and of itself?
I see the subletting analogy, but there's a big difference between subletting an apartment over the summer to minimize your losses (usually for ≤ your rent) and renting all the apartments in manhattan, then subletting them for profit after you corner the market. The former seems fine, and yah, I guess I do think that the latter should be illegal, because it only benefits some wealthy jerk who can afford to corner a m…
The latter likely is illegal. It would depend on the specifics but the SEC enforces market manipulation rules around cornering frequently.