Statement of SEC Regarding Recent Market Volatility • Hacker News Board

Re: Statement of SEC Regarding Recent Market Volatility

#221

Post by NationalPark » Fri, Jan 29, 2021, 4:07 PM UTC

markbnj wrote: post #193

ycombigator wrote: post #180

Earlier quoted context omitted.

Many just want to screw the hedge funds, finally it's their blood in the water.

I don't get this. I can't imagine the professional investor class is still blindly following their shorts. They're all out by now, aren't they? If the "little guys" are making money I tend to think it's coming from other little guys.

The "short" (haha) answer is that we just don't know what the funds have done during the last week. They're incentivized to mislead the public about closing their positions. But the technical reasons the gamma squeeze happened and possible short squeeze today could happen still make sense: the equity has oversubscribed short interest and a skyrocketing price.

Re: Statement of SEC Regarding Recent Market Volatility

#222

Post by Rapzid » Fri, Jan 29, 2021, 4:08 PM UTC

TeMPOraL wrote: post #49

moolcool wrote: post #40

Earlier quoted context omitted.

I can't find any documentation that a short squeeze is illegal. Can you?

It's in the SEC rules. "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." From https://www.sec.gov/investor/pubs/regsho.htm . It's an open question whether this case is more of a natural occurrence or "a scheme to manipulate", given that it's all randos who found a Schelling point and are now hyping…

Interesting.. WSB was 100% orchestrating a short squeeze. They were telling anyone who would listen and in fact using it to rationalize what they were doing..

Re: Statement of SEC Regarding Recent Market Volatility

#223

Post by xapata » Fri, Jan 29, 2021, 4:08 PM UTC

tompccs wrote: post #212

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…

I think bullets 3 and 5 were the main point of that comment. It wasn't well-said, but it is in fact valuable to spend a moment to get familiar with the jargon a person is using, even if that jargon happens to have homonyms with a different field's jargon. That effort is what allows us to "swim out of our lanes" as you might say.

Re: Statement of SEC Regarding Recent Market Volatility

#224

Post by robntheh00d » Fri, Jan 29, 2021, 4:08 PM UTC

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…

End all speculative finance.

That’s where we ended up after 1929, until the current billionaire class removed all the guard rails.

Nobody deep on SV stocks and unicorn chasing wants to admit they’re in the bubble too. Why does society owe floating a coder bros data science project?

Anything not science is a meme. That billionaires should exist is a meme. This is social philosophy, not truth. And it’s gamed.

America is a bubble in time and it’s having a real (environmental) impact on the future.

Billionaires are not experts. They’re rich and can pay the fines and schmooze. That is not expertise. It’s selling “free market” and manipulating it based on a meme that speculative finance expertise is real. All it is is social engineering of the masses to accept deflation of their economic position.

Re: Statement of SEC Regarding Recent Market Volatility

#225

Post by BoorishBears » Fri, Jan 29, 2021, 4:08 PM UTC

the_local_host wrote: post #201

BoorishBears wrote: post #127

Earlier quoted context omitted.

It boggles the mind people think hedge funds can't profit off a mad rush like this...

> It boggles the mind people think hedge funds can't profit off a mad rush like this... How exactly would they do it? Shorting it again would involve calling the top for a stock whose price recently has been unpredictable, but very high. Writing options seems nuts for something this volatile. I guess they could "buy volatility" with a straddle but again what would the numbers have to be on this where they turn a prof…

I would be completely out of my depth implying I understand all the creative ways different hedge funds make money, but there's a lot more tricks in the bag than "short it" and "write options"

Just look at Citadel... how much money do you think they've made off early access to majority of retail orders for GME as RH exploded?

And how much more money will they make on an ongoing basis after this from all the new users?

The volume has been insane, someone is making money besides retail investors, and they won't be the ones left holding the bag after the musical chairs stop...

Re: Statement of SEC Regarding Recent Market Volatility

#226

Post by kibwen » Fri, Jan 29, 2021, 4:09 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"…

In general it's good for people to be more aware of the fact that, outside of a few narrow technical domains, HN users are no less foolish, uninformed, and irrational as you those will find anywhere else on the internet.

Source: HN expert, to my continual shame.

Re: Statement of SEC Regarding Recent Market Volatility

#227

Post by disgrunt » Fri, Jan 29, 2021, 4:09 PM UTC

markbnj wrote: post #193

ycombigator wrote: post #180

Earlier quoted context omitted.

Many just want to screw the hedge funds, finally it's their blood in the water.

I don't get this. I can't imagine the professional investor class is still blindly following their shorts. They're all out by now, aren't they? If the "little guys" are making money I tend to think it's coming from other little guys.

No. Apparently other hedge funds got in line behind Melvin with even more aggressive shorts.

Re: Statement of SEC Regarding Recent Market Volatility

#228

Post by teeray » Fri, Jan 29, 2021, 4:09 PM UTC

ycombigator wrote: post #180

dleslie wrote: post #116

Earlier quoted context omitted.

The FOMO is palpable. There's a hurried rush of small investors hoping to turn their meagre savings into a big win, backed by the anxiety that if they don't try then they'll forever regret missing their one and only chance at a comfortable life. This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed.

Many just want to screw the hedge funds, finally it's their blood in the water.

Absolutely. Many view this as a donation to a political cause that has tangible outcomes. The ROI is watching hedge funds implode.

Re: Statement of SEC Regarding Recent Market Volatility

#229

Post by numair » Fri, Jan 29, 2021, 4:09 PM UTC

hogFeast wrote: post #186

numair wrote: post #107

Okay kids, story time. After the crash of 2008, I spent some time working with Dick Fuld. Yes, the former head of Lehman Brothers. Yes, the one people describe as “disgraced,” among other terms. Here’s the irony, though — Dick was one of the only people I encountered at that level of business/finance who wasn’t a scumbag. Unlike so many virtue-signaling Silicon Valley darlings, the guy behind the curtain was an honor…

Dick Fuld has said that several times publicly, there are interviews with the FCIC where he said that there was a conspiracy against LEH, and almost every part of the meetings at the NY Fed are public knowledge...you have no behind the scenes knowledge (you sound like every person: I met X who did Y terrible thing, he isn't actually a bad guy, I am going to ignore all the public information about X and prioritise my…

I am not going to go too far into this but, I was in meetings with Dick and senior executives from the other banks. The “lol sorry bro” attitude wasn’t just Dick’s way of telling the story.

Re: Statement of SEC Regarding Recent Market Volatility

#230

Post by sailingparrot » Fri, Jan 29, 2021, 4:09 PM UTC

tompccs wrote: post #212

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…

> Time and time again, experts have been shown to have consensus opinions which are wildly off from reality

No, it's just that it's not interesting when an expert is right about their domain expertise so we don't talk about it.

The issue is people getting skewed by this and then inferring that it must mean, on average, that their outsider opinion is as valid as experts, but really, it's not.