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Reddit's GameStop, AMC surge is the new Occupy movement

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Re: Reddit's GameStop, AMC surge is the new Occupy movement

#131

Post by text70 »

cl42 wrote: post #41
auto wrote: post #22

Earlier quoted context omitted.

So if there isn't one entity short 140%, is it that there are multiple chains of shorting, like shorts on top of shorts that leads to the 140% target? Not totally familiar with all this, just trying to understand.

Yes. If I short a share, I’m selling the share to someone and planning to buy it back later. That person who bought the shares from me can then lend them to someone else... so now two shares are being shorted when only one real share exists.

So, closing the loop back to the original analogy, you shouldn't be able to sublet an apartment with an occupancy rate of 4, out to 8 people.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#132

Post by deetsb »

fileeditview wrote: post #23
djoldman wrote: post #13

Earlier quoted context omitted.

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?

Not sure if your comparison is so great.. are there apartments whose rent price fluctuates over 1000%? Also subletting is not selling..

1) I'm not sure the magnitude of change is relevant to the analogy -- it doesn't alter the mechanics as much etc.

2) You can view renting as a sale -- the renter buying the utility of the space in exchange for a series of cash flows (but not paying for the economic upside/downside). Financial markets have the ability to separate components of assets (ex. voting vs non-voting shares) and value them; there's no reason to not do the same here.

In that structure a sublet is simply a rent on a rent.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#133

Post by kasey_junk »

127 wrote: post #61

What's terrifying to me here is how little actual law enforcement there is against the rich and well connected, when they do wrong. If you allow a rigged game, it will rot the entire system.

What about this specific financial event did someone “do wrong”?

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#134

Post by Person5478 »

TheRealDunkirk wrote: post #80
xyzzyz wrote: post #65

Earlier quoted context omitted.

So does Toyota, which makes more things that more people want to buy, and yet is only valued at a quarter of Tesla.

Toyota makes fairly boring products of the last century. Musk is currently shooting rockets into space and deploying a network of satellites. The optics of this cannot be discounted.

using the word "optics" is exactly why people are saying it's overvalued.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#135

Post by thaumaturgy »

djoldman wrote: post #13
protomyth wrote: post #10

Shorting a stock 140% is the market manipulation and should be criminal. Anything a large group does after some hedge fund pulls that stunt is fair game.

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?

Can the subletting of apartments lead to a Volkswagen Squeeze? (https://moxreports.com/vw-infinity-squeeze/)

The GME heavily-shorted position specifically has directly led to significant manipulation on the parts of investment firms that are now endangered by the very positions they created. If the end game of the stock market is an unregulated free-for-all, then it can't be manipulated by definition and there's going to be short cycles of calm punctuated by terrifying chaos like 2008 and today; if people want to avoid that chaos, then they have to accept the regulation of chaos-causing behavior.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#136

Post by btilly »

ajkjk wrote: post #60
Hamuko wrote: post #34

Earlier quoted context omitted.

> 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.

Tesla is one of the few modern companies whose value actually makes sense to me. They actually make something! that people want to buy! that's way better than most of ad-tech which seems like a multi-layered pyramid scheme.

The value proposition is not that people want to buy it now. It is that they build something that people WILL want to buy.

There are a lot of gas car manufacturers who make something that lots want to buy, but in 5 years people won't want those products. And it is unclear whether they will successfully make the transition to what is coming. (Based on the history of disruptive innovation, they mostly won't. No matter the public pronouncements to the contrary.)

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#137

Post by FabHK »

monoideism wrote: post #36
ramblerman wrote: post #4

Earlier quoted context omitted.

I also don't care about a hedge fund losing out but Id hardly call the current value of Gamestop to be "real" Economics. And for the few /r/wsb guys and girls making a killing there are a lot more late comers who will lose big, and can't afford to.

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/

> GME will help pull down our current fake system, and help the middle and lower classes receive fair compensation from the system.

errr.... no? It won't. At all. How?

What will happen is that a few hedge funds will lose a bit, a few hedge funds will make a bit, lots of retail investors will lose a bit (maybe more than they can stomach, individually), and a few retail investors will make a lot.

For the middle and lower classes to receive fair compensation from the system, you need political action (and definitely not the "more tax cuts for the super rich" Trump type).

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#138

Post by fractionalhare »

anthk wrote: post #3

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…

> It will harm everyone, but at least this Century will be less focused on speculation and more on actual earnings.

Yeah I'm not sure GME is exemplifying a new regime of market focus on actual earnings instead of speculation...

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#139

Post by deetsb »

robjan wrote: post #96
cordite wrote: post #15

Earlier quoted context omitted.

Could you elaborate on how shorting past 100% is comparable to subletting? How is shorting alike borrowing something?

It's not comparable because you can't rent an apartment from someone then sell the ownership of the apartment to someone else because you don't own it. There's no way of making it comparable without making some kind of derivative contract against the deed to the property but then it's back to traditional shorting.

I said this somewhere else, but you should think of the rent as ownership of the utility of the space for a fixed tenor. The only reason you can't easily trade it is most contracts restrict that, but removing that friction, it really isn't too different.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#140

Post by NullPrefix »

Tenoke wrote: post #108
ta1234567890 wrote: post #44

Earlier quoted context omitted.

Bailouts for big companies owned by the rich, $2k paycheck (if lucky) for the rest.

This comparison is unfair. The cost of just the first stimulus checks was ~269b[0] and the second ~ $464b[1] and these are the lower estimates I've seen. For comparison the 2008 bailout cost ~498b[2][3], possibly less after the government made some of it back. So no, the government isnt spending more on bailouts for the rich than on covid relief for the rest. 0. https://www.pgpf.org/blog/2021/01/what-to-know-about-th…

>government made some of it back

Government or the people working for the gorvernment?

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