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Statement of SEC Regarding Recent Market Volatility

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Re: Statement of SEC Regarding Recent Market Volatility

#451

Post by PaulDavisThe1st »

scythe wrote: post #432
hrktb wrote: post #266

Earlier quoted context omitted.

I agree in principle. Then in real life example you will have real doctors and nurses giving conflicting advices and having wildly different viewpoints on the details. The easy to point to example is how a lot of doctors viewed masks at the beginning of the pandemic. Or how trickle down economics is also endorsed by experts. Or experts opinions on mental health drugs. And so many other subjects where it won’t be hard…

>Or how trickle down economics is also endorsed by experts. Trickle-down economics is not explicitly endorsed by anyone , because it's a pejorative. That's like saying "totalitarianism is popular in some countries"; you might think those countries are totalitarian, but they don't.

> you might think those countries are totalitarian, but they don't.

"You" in the above is a specific individual.

"They" in the above is undefined and extremely imprecise.

For various definitions of "they", your statement could be true, false or somewhere in between.

Re: Statement of SEC Regarding Recent Market Volatility

#452

Post by BoorishBears »

kenneth wrote: post #326
dkrich wrote: post #150

Earlier quoted context omitted.

I mean do people really believe Robinhood traders are moving billions of dollars of stock a day? Most admit that they aren’t selling and buying at higher and higher levels. That translates to very little cash to buy more. There is absolutely no way that these moves can be attributed to retail traders or short squeezes. The narrative that these are retailers causing every significant move higher and with every move th…

Let's say the average bet is 1-5k into this the average Robinhood user invests around 5k), it only takes 200k-1M buying in to move $1B into the stock. When you start with a $200M market cap on a heavily shorted stock, you easily end up where we are today

Average bet being 1-5k feels optimistic by an order of magnitude...

The entire account value of normal RH users in the range of 1-5k

Most people just joining don't have 1k to just throw at a lottery ticket, and remember that until today RH allowed fractional shares of GME

-

But you know, that's not even it...

The other day GME did 20 Billion in volume in a single trading day. More than the S&P 500.

I don't understand how people think retail can account for that.

Re: Statement of SEC Regarding Recent Market Volatility

#453

Post by kart23 »

rich_sasha wrote: post #20
dls2016 wrote: post #11

What are the odds of a flash crash in the next week as a result of this activity? The system of banks and market makers and clearing houses is a always way more coupled than the the owners let on... history shows they don't know how to risk manage these sorts of situations.

From a distance, this is all a storm in a teacup. It's a small handful of stocks, and every single one in S&P500 is waaaay bigger, in terms of trading volumes and market cap. Anything can happen, but in finance terms, this is tiny so far.

the inverse correlation between the S&P and GME style stocks looks strong over the last couple days.

Re: Statement of SEC Regarding Recent Market Volatility

#454

Post by deelowe »

TeMPOraL wrote: post #357
gruez wrote: post #329

Earlier quoted context omitted.

>They clearly violated their customers' trust, so their customers should leave them. They did? That might be the case according to the Popular Narrative (that the Hedge Funds phoned them and said "shut it down"), but reality is that they couldn't front the deposits for the customer's trades, due to the insane volatility. In that case it's less violating their customers' trust and more having a product that couldn't h…

The narrative doesn't matter. It's a PR problem. Lots of people wanted to buy GME, then RH suddenly cut them off, offered no reasonable explanation, and then their CEO went on the news to just spew some content-free noise. Sure, there were reasons behind this ban, perhaps good reasons - but they weren't explained by RH, and RH to this moment didn't even admit to the cause of the problem. Sounds like solid ground for…

The CEO said they couldn't cover deposits. He only started spewing nonsense when the obvious question about RH having liquidity issues came up. He didn't lie to retail RH clients, but he may have lied to RH investors. Then again, it's funded by private equity, so it's likely they know all this.

All of this makes sense given the emergency cash infusion of 1B RH got this week.

Re: Statement of SEC Regarding Recent Market Volatility

#455

Post by cogman10 »

wolf550e wrote: post #231
tompccs wrote: post #212

Earlier quoted context omitted.

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-consensus outsiders who make progress have done the reading. They know what the consensus is, they know all the concepts and the jargon, and they disagree about something. Your post can be interpreted to mean "my ignorance is just as good as your knowledge". That's anti-vax thinking and argument. That is not a way to make progress.

Pretty well captured by that old comedy sketch "The expert" [1]

I dare say that most people here on HN have been hit by upper management telling them to do something stupid or impossible. I'd even wager that most have had them get defensive when you try to explain why doing X isn't a good idea.

That's effectively what I see when someone criticizes "experts" broadly and generally. I've long accepted that there are many individuals that know a lot more about subjects I know little about. While I have a pretty good read on things related to computers, I'm more than willing to admit that I'm not an expert in science, medicine, climatology.

So who should I trust? Should I trust the youtuber that's "Found" the secret that the "so called experts" are trying to hide from the public? Or should I look to the actual experts actually working in the field and take their word for it? Or do I take the harder route and try and build understanding on the subject on my own?

I certainly have tried to expand my personal understanding in general. However, what I've found is that by and large the experts actually know what they are talking about. You should generally trust them. The place where I've found a LOT of misinformation is the "skeptics" that hurl doubt without evidence while denigrating "experts". That is the place where I've found outright lies.

Evidence of such BS artists include Flat earthers, Anti-vaxxers, and climate change deniers. Those are all flat out wrong positions. There's mountains of evidence and experts against each of those positions and mostly lies or misrepresentation in favor.

[1] https://www.youtube.com/watch?v=BKorP55Aqvg

Re: Statement of SEC Regarding Recent Market Volatility

#456

Post by scythe »

Robotbeat wrote: post #435
tootie wrote: post #250

Earlier quoted context omitted.

As has been stated elsewhere, it is easier to recover from alienating customers than it is from running afoul of the SEC. They ran a very real risk of being forcibly shut down by regulators if they didn't slow trading.

I don’t agree. See Tesla. Elon frakked up with the SEC but not his customers (or his fans) and so Tesla a couple years later is on top of the world. I doubt Robinhood will survive this. They built their whole brand around rallying for the little guy at the expense of the fat cats. It’s literally their name.

Tesla isn't an investing firm. They don't even really have much in the way of acquisitions yet. Tesla would have to do something pretty blatant to really piss off the SEC. Elon's $420 tweet was greeted with a slap on the wrist precisely because "you're new here, aren't you?".

The better analogy would be if SpaceX pissed off the FAA.

Re: Statement of SEC Regarding Recent Market Volatility

#457

Post by PaulDavisThe1st »

phkahler wrote: post #385
dmurray wrote: post #254

Earlier quoted context omitted.

To be fair, professional medical advice was especially low-quality in the early days of the pandemic. What was important was public health messaging, picking some lowest-common-denominator messages and having everyone repeat them. It wasn't hard to be better informed than that.

>> To be fair, professional medical advice was especially low-quality in the early days of the pandemic. They primarily suffer from dogma IMHO. For example, now they know people with breathing difficulty should be kept in prone position. I dont know if that applies outside of Covid19, but I thought it was really interesting to see them learn it. Like "oh, what we'd normally do is bad but this variation is good". Medi…

> Medicine also suffers from a fear (justified) of litigation.

very US-centric. Medical litigation in many others parts of the world doesn't work in the same way, and isn't a driving force in the way medicine is practiced.

Re: Statement of SEC Regarding Recent Market Volatility

#458

Post by Dirlewanger »

jeffbee wrote: post #172
Dirlewanger wrote: post #163

Earlier quoted context omitted.

May be for some of them. People invest for all sorts of reasons besides the "fundamentals", you know. Tell me: what do you think Melvin's intentions were for shorting a dying company's stock for several billion?

To raise cash? Shorting a company in terminal decline, but that will never die and will live on the pink sheets forever, is a great way to take a gain without ever having to pay the taxes.

And you just described a form of market manipulation. Except that we can't know Melvin's true motives because for some weird reason, hedge funds don't have to make their methodologies public.

So why are you getting mad that retail investors are engaging in the same practices that hedge funds can do with impunity?

Re: Statement of SEC Regarding Recent Market Volatility

#459

Post by unicornmama »

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…

The narrative that retail investors have stuck it to hedge funds is laughable.

Who do they think is selling counter party is?

All they’ve managed to do transfer wealth from one hedge fund to another. And eventually when this pops they have transferred wealth from themselves to other winning hedge funds.

Re: Statement of SEC Regarding Recent Market Volatility

#460

Post by robntheh00d »

remolacha wrote: post #410
robntheh00d wrote: post #224

Earlier quoted context omitted.

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 i…

Bad take. We need capital markets to effectively value and fund different business efforts (unless you want to do things Soviet-style). And no matter how much fundamental analysis you do, some things remain unknown; all finance is in some way speculative. There are rough patches, but you need to take the bad to get the good.

No, we don’t.

We need to let people build their communities without tethering agency to outsiders who control the flow of imaginary capital.

Pretending a value in a database is real ownership of something is insane and continues to lead humanity towards fascism to protect the oligopoly at the top of the meme pyramid.

You’re selling an appeal to authority that is a complete mirage, only existing in your head because of years of reinforcement.

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