Statement of SEC Regarding Recent Market Volatility • Hacker News Board

Re: Statement of SEC Regarding Recent Market Volatility

#211

Post by titzer » Fri, Jan 29, 2021, 4:04 PM UTC

jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

Congrats, you hit the Smarty's Catch 22--thinking you found the error in the smart people's oversimplified reasoning with oversimplified reasoning and then throwing stones.

/ducks

Re: Statement of SEC Regarding Recent Market Volatility

#212

Post by tompccs » Fri, Jan 29, 2021, 4:04 PM UTC

jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

I am so sick of this 'stay in your lane' attitude. Time and time again, experts have been shown to have consensus opinions which are wildly off from reality. You can almost set your watch to how often an outsider will analyse a situation from first principles and make money off the 'experts', especially in the stock market.

You're welcome to your opinion but this appeal to authority is seriously wearing thin. Pretty much the only field which hasn't been embarrassed by an outsider of late is physics, and even that might not last forever (I remember the smugness with which Stephen Wolfram is routinely dismissed from having non-consensus views of physics).

Progress almost always comes from non-consensus outsiders. This whole website is supposed to be a testament to that!

Re: Statement of SEC Regarding Recent Market Volatility

#213

Post by PeterisP » Fri, Jan 29, 2021, 4:04 PM UTC

balozi wrote: post #46

OscarCunningham wrote: post #25

There's been some speculation that what WSB are doing could be market manipulation or otherwise illegal. The fact that this statement only mention retail investors in the context of protecting them makes me suspect that the SEC's not going for it.

Well... they will start by redefining "market manipulation" to encompass all activity they now consider disruptive (also suitably redefined). This is America today.

There's no need for SEC to redefine market manipulation - IMHO the "pumping" activity of at least some WSB activists would perfectly match the existing legal definition of market manipulation as written to prevent historical "boiler room" type activities.

On the other hand, in these discussions I have seen a bunch of assertions that what the shorting hedge funds or HFTs are doing is "market manipulation" - now that is an attempt to redefine market manipulation to something entirely different than what it is/was.

Re: Statement of SEC Regarding Recent Market Volatility

#214

Post by acover » Fri, Jan 29, 2021, 4:04 PM UTC

ordinaryradical wrote: post #156

acover wrote: post #85

Earlier quoted context omitted.

If wallstreetbets was a hedge fund and they bought all of GME to cause a short squeeze then that is market manipulation - this has been settled [0]. [0] - https://www.sec.gov/news/press-release/2013-159 Edit: litigated to settled

If you actually read that link that case is so extraordinarily different than the reality of what’s happening today I don’t know how you can argue this in good faith.

> I don’t know how you can argue this in good faith

I'm not an expert and am rather dumb.

What do you think the differences are?

Differences:

* One hedge fund versus a multitude of investors

* Owning all the securities vs only a portion

The similarities are:

* Intentionally buying all the stock to cause a short squeeze

* Explicitly recalling borrowed shares to cause a short squeeze

To be clear, I'm not arguing that what wallstreetbets is doing is illegal but something fairly similar is. I thought an actual example of market manipulation was relevant to the conversation.

Re: Statement of SEC Regarding Recent Market Volatility

#215

Post by Tenoke » Fri, Jan 29, 2021, 4:05 PM UTC

kodah wrote: post #185

jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

Personally, I think smart people just do this. When I got sick with COVID I cannot begin to describe the number of people who became doctors during this unprecedented time , only to send me outdated comments, articles, and speculation. All of these people thought they were smarter than the instruction I received from a real doctor, nurse practitioner, and the CDC. These were smart people, though, and mostly (but not…

I saw plenty of smart people ahead of institutions and real doctors on masks and to some extents other aspects of the pandemic.

Yes, in general if you don't know much on a topic you'd on average do best if you listen to the experts but you can outperform that if you can identify the right kind of smart people with a good track record.

Re: Statement of SEC Regarding Recent Market Volatility

#216

Post by dalbasal » Fri, Jan 29, 2021, 4:05 PM UTC

jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

True (and funny) but, there's a lot of actual learning happening too. Nothing like limit testing to understand a system.

Re: Statement of SEC Regarding Recent Market Volatility

#217

Post by adriancr » Fri, Jan 29, 2021, 4:05 PM UTC

realmod wrote: post #187

adriancr wrote: post #139

A few rants that i tried answering to someone before him removing post. Free speech is allowed. Prosecuting people for free speech is impossible. A bunch of imbeciles posting on forums is similar to a bunch of imbeciles on CNBC arguing that price is too high. A hedge fund with 12 billion dollars shorting 140% of a stock and then using media to drive price to 0 is illegal. Also more then idiotic since they caused the…

I also believed that most of the shorts were naked, but the director of S3partner clearly explained how this was not the case. One stock can be shorted multiple times which is what causes the SI% to be over 100%. A lends to B, B sells to C, C lends to D and so forth. Two shorters (B,D) but only 1 original stock. And Robinhoods closure of the trade seems reasonable in retrospect as well. If the clearing house required…

You can get more the 100% without naked shorts, sure, but is that legal?, does SEC allow that?, nobody is concerned that if there is a short squeeze there is no chance in hell to close out? (like we are seeing here)

The point I tried to make was - this short was done to drive price down to zero (it can do that with that large of a position) in collusion with negative media reports from friends... That is manipulation. And they got caught with their pants down.

I'm also not convinced on no naked shorts, we'll see...

As for robinhoods closure of trade, they only disabled buy, not sale... as for reason, are you speculating? I did not see any clearing house comment. This was brought up by Cuomo as well in interview.

As for illegal on robinhoods part, we'll see, there will likely be an investigation. Especially since they are owned by the company that bailed Melvin Capital out.

Re: Statement of SEC Regarding Recent Market Volatility

#218

Post by trsohmers » Fri, Jan 29, 2021, 4:06 PM UTC

FartyMcFarter wrote: post #136

ericmay wrote: post #101

Earlier quoted context omitted.

If WSB was a hedge fund they just have to buy some of GME - not all or even too much. Other hedge funds could buy some too. Just have a "dinner conversation" about it. Just like you and a few hedge funds can get together and collectively short GameStop and other companies... as they are doing now. There's no rule that I know of that says only one entity can make a specific investment. -edit- Don't forget that hedge f…

> Just have a "dinner conversation" about it. This would be illegal I think.

It isn't. Hedge fund managers have "idea dinners" with dozens of their friends all the time to discuss what plays they are thinking... they frequently also bring in guests that represent companies, or even politicians/former politicians to discuss lobbying strategies to keep this exact type of collusion and market manipulation legal for them.

But as soon as a bunch of the dreaded "retail investors" start doing it in the open, Wall Street calls on K Street to save them.

Re: Statement of SEC Regarding Recent Market Volatility

#219

Post by loljeffbee » Fri, Jan 29, 2021, 4:06 PM UTC

johnfn wrote: post #192

jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

Can we not write posts like this? The air of superiority without actually offering any insight doesn't contribute to interesting discussion.

That’s Step 9: lament posts that shatter the shared fantasy as disruptive to the forum.

Re: Statement of SEC Regarding Recent Market Volatility

#220

Post by TeMPOraL » Fri, Jan 29, 2021, 4:06 PM UTC

Dirlewanger wrote: post #143

dkrich wrote: post #75

There’s a long history of similar occurrences that follow along a common line: whatever appears to support individual investors will be the path taken by politicians and regulatory bodies. Right now it appears that the public wants to be able to trade on their terms because there is this narrative that the little guy is finally sticking it to the big bad hedge funds. In reality there is probably very little truth to…

>nobody blames the speculators The hedge funds are the speculators in this case. They're playing a dangerous game where you can short more stock than what actually exists. Why this is allowed? Who the fuck knows.

I think this "is allowed" for the same reason that I can borrow a book from you, sell it on Amazon, and when you ask for your book back, buy a copy of that same book on Amazon and give it to you - but in the meantime, the person who bought your book from me can lend it to yet another person, who does the same as me.

In other words, this works simply because stocks can be sold and borrowed, and they don't carry provenance with them. To stop this, you'd have to do the equivalent of DRMing books and revoking the first sale doctrine. Which I imagine would turn shorting into a much more complex market mechanic than it is today.

(Disclaimer: the extent of my expertise on stock markets is me knowing how to spell "stonks".)