Statement of SEC Regarding Recent Market Volatility • Hacker News Board

Re: Statement of SEC Regarding Recent Market Volatility

#361

Post by gruez » Fri, Jan 29, 2021, 4:39 PM UTC

adriancr wrote: post #316

gruez wrote: post #286

Earlier quoted context omitted.

>Free speech is allowed. >Prosecuting people for free speech is impossible. Are you suggesting that pump and dumps legal because "free speech"? >A hedge fund with 12 billion dollars shorting 140% of a stock and then using media to drive price to 0 is illegal. What is the relevant legislation preventing someone from shorting "too much"? Furthermore, prior to this debacle I certainly haven't heard of GME in the media a…

> Are you suggesting that pump and dumps legal because "free speech"? Where's the pump and dump?, This is a short squeeze due to Melvin Capitals 140% short and people buying due to initially Cohen joining. Same as for VW a long time ago. Now it's just because people want to buy... Hell I did so as well at recent prices as I think with a nice stock offering GME can get to a 500 fair market value easily. Que in some pa…

>Where's the pump and dump?

Whether this specific instance counts as a pump and dump is irrelevant. The point is that it's illegal and "free speech" isn't a valid defense. Furthermore, comments elsewhere in this thread have mentioned that intentionally causing a short squeeze is also illegal.

>Look it up under market manipulation. A oversized hedge fund overselling a stock will certainly be able to set the price where they want and then profit.

And the same isn't true of the people in WSB gobbling up GME?

Re: Statement of SEC Regarding Recent Market Volatility

#362

Post by bcrosby95 » Fri, Jan 29, 2021, 4:39 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"…

So, the HN "Genius" is just like most other people on the internet? I think the problem isn't with the HN "Genius", it's you expecting people on HN to not behave like people.

Stop putting STEM workers on a pedestal. We're still just people. Like everyone else.

Re: Statement of SEC Regarding Recent Market Volatility

#363

Post by Robotbeat » Fri, Jan 29, 2021, 4:39 PM UTC

throwaway-571 wrote: post #302

sosuke wrote: post #198

Earlier quoted context omitted.

When hindsight points out the opportunities that you overlooked which would have giving you that comfortable life it infects all future decision making.

Is there a spoiler tag on HN ? These ones still hurt: There is a lot of thing one could have done "for the LULz" but decided to browse HN, Imgur or Reddit instead. - Bitcoin. I heard about it when it was still possible to mint it on CPU, but chose to run SETI@Home instead. - Bitcoin when it was at merely $9000. - Ethereum when it was going under $1. - Dogecoin like anytime before yesterday (up 6x or something today).…

At least Doge has a small transaction fee. 2¢ For Doge vs like $7 for Bitcoin. Might actually be useful as a currency like Satoshi intended in his paper (lower transaction cost than credit cards). But of course those low fees are because it’s not popular.

Re: Statement of SEC Regarding Recent Market Volatility

#364

Post by xapata » Fri, Jan 29, 2021, 4:39 PM UTC

throwaway-571 wrote: post #302

sosuke wrote: post #198

Earlier quoted context omitted.

When hindsight points out the opportunities that you overlooked which would have giving you that comfortable life it infects all future decision making.

Is there a spoiler tag on HN ? These ones still hurt: There is a lot of thing one could have done "for the LULz" but decided to browse HN, Imgur or Reddit instead. - Bitcoin. I heard about it when it was still possible to mint it on CPU, but chose to run SETI@Home instead. - Bitcoin when it was at merely $9000. - Ethereum when it was going under $1. - Dogecoin like anytime before yesterday (up 6x or something today).…

Live long enough and there'll be plenty more. I'll have more regret over that girl I never spoke to.

Re: Statement of SEC Regarding Recent Market Volatility

#365

Post by Anon1096 » Fri, Jan 29, 2021, 4:39 PM UTC

alkonaut wrote: post #243

Miner49er wrote: post #165

Earlier quoted context omitted.

> 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 this. The fact that buying was limited yesterday is evidence that the little guy is actually winning here. Trading was stopped to save the hedge funds, because if they go under or lose to…

Then the clearinghouse should fail, rather than the private actors saved. Once one accepts that "socialized risk and private profits" isn't acceptable, then one must also accept that either we must allow even the too big to fail actors to fail, or we must not accept any actor to be too big to fail at all. If public money is used to rescue a bank or clearinghouse, then the public should own it. A government institutio…

There was no bailout here of the clearinghouses, and in fact your line of argumentation supports them. If you want institutions to be able to avoid getting liquidated for cents on the dollar or bailed out by the government, you need to also allow them to defend themselves in times of trouble. The clearinghouses are doing just that by forcing brokerages to get higher reserves.

Re: Statement of SEC Regarding Recent Market Volatility

#366

Post by JamesBarney » Fri, Jan 29, 2021, 4:39 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…

The non experts who do this are almost always people who have spent significant amounts of time familiarizing themselves with the literature.

It is fairly obvious that this is not the case for most people in threads about GME.

Re: Statement of SEC Regarding Recent Market Volatility

#367

Post by tacitusarc » Fri, Jan 29, 2021, 4:39 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 absolutely agree with the main thrust of your comment, but I want to point out that in unprecedented times specifically, the odds that a smart non-expert is more correct than an expert are substantially higher than in normal times.

Re: Statement of SEC Regarding Recent Market Volatility

#368

Post by sanderjd » Fri, Jan 29, 2021, 4:39 PM UTC

NoOneNew wrote: post #300

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.

Everything on WSB states this is a bad investment plan and is more to bankrupt Melvin because they tried to bankrupt Gamestop. Short sellers have been using the down turned economy to collapse struggling companies that hire everyday people. What's funny is how the HN community tries to defend the firms they've whined about for years. Is what's going on irrational? Yup. But it pulls back the curtain of what the financ…

Here's what oh-so-many people are missing: the gigantic volume in these stocks is no longer coming from the WSB YOLO bros who know they'll lose money but think that's worth it to stick it to hedge funds. That may well be who was getting into the stock on Monday and Tuesday. But now it is people who saw the story on Good Morning America, having never previously heard of WSB or Robinhood, who don't care about hedge funds or any of that, but just got the impression from the news that hey this stock is going way up and that must mean it is a way to make a quick buck. And those are the people who are actually going to get screwed, not the hedge fund managers, who will be just fine.

Re: Statement of SEC Regarding Recent Market Volatility

#369

Post by joncrane » Fri, Jan 29, 2021, 4:39 PM UTC

gruez wrote: post #346

sendtown_expwy wrote: post #338

It seems like Robinhood, when it stopped trading on GME, decided to literally transfer money from the WSB retail traders to the funds who were short on the stock. But if Robinhood needed to halt trading in order to just survive as a brokerage, (and could demonstrate so), would that justify its behavior? Does anyone know more about laws and regulations concerning brokerages here?

>It seems like Robinhood, when it stopped trading on GME, decided to literally transfer money from the WSB retail traders to the funds who were short on the stock. what?

Preventing purchase orders would cause the stock price to go down.

The funds short the stock gain wealth from the stock price declining.

Holders of the stock lose wealth. Clients who want to buy "lose" the opportunity to gain wealth.

The suspension of the ability to buy into the hype absolutely hurt the long folks (mostly retail WSB types) and helped the short folks (the big hedge funds which are short GME).

Re: Statement of SEC Regarding Recent Market Volatility

#370

Post by adriancr » Fri, Jan 29, 2021, 4:40 PM UTC

UncleMeat wrote: post #297

adriancr wrote: post #217

Earlier quoted context omitted.

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…

Imagine an alternative universe. WSB decides that shorting some company they hate is a good idea. But wait, it has already been shorted up to 99% by hedge funds! No more shorting allowed. SEC rules. Same backlash about a "rigged" system.

You are aware everyone else except retail was allowed to buy right?

You are aware hedge funds did just that after doing wash sales to trigger stop losses.

It was funny at one point bid ask spread was 120-5000