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Statement of SEC Regarding Recent Market Volatility

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Re: Statement of SEC Regarding Recent Market Volatility

#661

Post by tolstoshev »

OscarCunningham wrote: post #164
blackearl wrote: post #141

Earlier quoted context omitted.

If the SEC isn't going to litigate the naked short selling that preceded this, it's really hard to not cry hypocrisy.

Is there any actual evidence of naked short selling? The only evidence I've seen people raising is that the total value of the shorts was over 100%, but that can happen completely legitimately if the people who buy from short sellers allow the stock to be sold short a second (or third, fourth, ...) time.

I don't get why loaning out an already loaned stock is legal. Short selling should be limited to first gen loans. Otherwise it's like Beavis and Butthead in the Candy Store episode where they keep loaning the same dollar back and forth.

Re: Statement of SEC Regarding Recent Market Volatility

#662

Post by pas »

ta1234567890 wrote: post #630
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…

> Then in real life example you will have real doctors and nurses giving conflicting advices and having wildly different viewpoints on the details. Exactly. Real life example - someone I know asked her doctor about getting the Moderna covid vaccine while pregnant. The doctor not only said it was ok, but also verbally recommended it and gave her a written paper to help her get the vaccine. She was able to get it a cou…

But that ... that's not exactly incompatible. The WHO makes very simple blanket statements that are safe in general.

A doctor usually looks at an individual. (And we know a lot of pregnant women got infected with COVID. We know that hospitalization was higher for them, but also that mortality is the same - https://www.cdc.gov/mmwr/volumes/69/wr/mm6925a1.htm?s_cid=mm... , so the immune reaction should be the same too)

The real problem is that it's impossible for a non-expert to gauge the expertise of any of these entities (your full-sized real-life walking-talking doctor who you know for a deacade, the WHO and anyone in between). Even simply asking many questions is just the illusion of getting informed (not just because there's rarely any time for proper answers as you mentioned), but because the answers are biased, so this naturally biases the next question too. (Unless there's enough time and effort to go through years of science and try to falsify whatever theory is being communicated with very targeted questions, it's close to useless/futile effort.)

> But they are not really vested in you in particular, you are just one more,

Yep. Agreed. Also usually primary care physicians are better at "bedside manner" and pattern matching than at real medical science. (Because it's not really their job to have 20 doctorates in every subfield of biology.)

Re: Statement of SEC Regarding Recent Market Volatility

#663

Post by Aunche »

ditonal wrote: post #586
sailingparrot wrote: post #230

Earlier quoted context omitted.

> 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.

If a physicists tells me something about how the solar system works, they don't have much reason to lie to me. If RobinHood tells me how clearing houses work, they have a huge reason to lie to me. Given what we say in cases like Enron, Bear Stearns, I am shocked and dismayed at the eagerness of Hacker News contributors to so readily accept whatever Robinhood tells them as 100% gospel. Where were all these experts on…

I don't take what Robinhood says at face-value because they have proven to be a sketchy-ass brokerage. That said, I still find their statements infinitely more valuable than baseless conspiracy theories floating around. Why would Citadel risk jeopardizing their lucrative relationship with Robinhood just so they might be able to successfully manipulate the market?

Re: Statement of SEC Regarding Recent Market Volatility

#664

Post by novok »

mumblemumble wrote: post #601
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…

Point #3 doesn't seem consistent with the idea that this is just a "stay in your lane" attitude. "Lurk before you leap" might be a better phrase. You've got to do at least a little homework before you can understand a technical topic well enough to make sense of what you're reading. I am less familiar with finance, but I see this all the time when HN discusses legal matters. The conversation is almost pure noise, bec…

Or to quote another software saying, RTFM

Re: Statement of SEC Regarding Recent Market Volatility

#665

Post by prepend »

astrange wrote: post #553
chosen1111 wrote: post #510

Earlier quoted context omitted.

Does medical advice fall into this consensus trap? If so...relative to today?

It is a good example of it, eg anything American doctors would’ve told you about wearing face masks was wrong until it wasn’t (and the CDC director is still telling people not to wear N95s), they still give terrible diet advice like telling diabetics to eat more carbs, and so on. Doctors are quite bad at making reasonable decisions when they don’t have an RCT in front of them.

> CDC director is still telling people not to wear N95s

This is an interesting point. The statement I read from her is saying that N95s are hard to wear for long periods of time, so people will wear them improperly. So the overall adherence is higher with cloth coverings and have a net higher benefit.

She’s not saying “don’t wear n95s” she’s saying “we don’t recommend it because...”

This is an important distinction.

Also N95s have to be fit tested to be effective. So randos buying N95s and wearing them will frequently not work.

Re: Statement of SEC Regarding Recent Market Volatility

#666

Post by esoterica »

zamalek wrote: post #637
esoterica wrote: post #593

Earlier quoted context omitted.

This is QAnon/Kraken/Dominion level crankery. The MAGA types are happy to believe in voter fraud conspiracy theories with no evidence because they hate the Democratic party, and here you are doing literally the exact same thing here except replacing "Deep State" with "hedgefond managers". People like you make fun of the QAnon-types but you're just as willing to indulge in deranged evidence-free conspiracy theorizing…

Shorting more than 100% of the stock is excessive and irresponsible. That figure is not a conspiracy theory: it is public information that the SEC releases monthly. Whether hedge fund managers did make a call to their buddies is not the only thing in question here (although the SEC will surely determine the truth). Shorting a stock drives the price down and, while this is no less legal than buying a stock, the questi…

The parent commenter claimed that brokerages were colluding to drive the price of GME down to benefits the shorts. That is QAnon-level evidence-free conspiracy theorizing. The clearing houses were demanding more collateral and brokerages couldn't afford or didn't want to put it up.

> whether shorting 136% of the stock counts as outright manipulation

I refer you to the snarky top comment about how all the Dunning-Kruger victims who claim manipulation do not actually know what manipulation is. Shorting a stock is not manipulation and neither is lots of people deciding to short a stock. 136% of the stock is shorted because a lot of people were shorting it, not because Some Guy decided to single-handedly short 136% of the float.

> Reddit kids have done nothing but pop an artificial bubble

So GameStop was an artificial bubble at $10 but not at $500? Really?

Re: Statement of SEC Regarding Recent Market Volatility

#667

Post by spydum »

kshacker wrote: post #88
qmmmur wrote: post #77

Earlier quoted context omitted.

People are free to purchase stock how they want to. If those people collect together and discuss potentially profitable strategies for trading who is to stop them? Do you think its possible youve fallen ill to the rhetoric that this is bad purely because the rich people didn't get their way?

But people are not being allowed to purchase stock as they want. Robinhood now allows you to buy a grand total of 5 shares of GME.

that's a service delivery problem, just like when a restaurant runs out of a popular dish. Go to another broker.

Re: Statement of SEC Regarding Recent Market Volatility

#668

Post by InvertedRhodium »

fairity wrote: post #656
snarf21 wrote: post #566

Earlier quoted context omitted.

And what about all the people who watch MSNBC and CNBC and Cramer, do they need to stop pushing stops as good or bad too? They tell lots of people "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" too. None of this could have happened if they weren't shorting GME at 143%+ of float. They w…

Greed is really only a problem when your actions ultimately hurt someone else. In general, shorting stocks is a beneficial action because it helps prevent shares from becoming overvalued. So, yea, the fact that GME had 143% of its shares shorted is a function of greed. But, no, greed in this case was not a problem so long as GME's share price was fairly valued.

Is "fair value" an objective metric in this context?

Re: Statement of SEC Regarding Recent Market Volatility

#669

Post by [deleted] »

JKCalhoun wrote: post #640
xster wrote: post #237

Earlier quoted context omitted.

This seems like a strawman. The OP isn't arguing against outsider/non-expert discussion. He's just satirizing HN's specific tendencies to spin off of a headline/article first glance into a let-me-teach-you-something fan fiction vs fan fiction argument.

A agree that is what OP is doing. Disagree that we can dismiss all HN comments unless they are experts in said field.

[deleted]

Re: Statement of SEC Regarding Recent Market Volatility

#670

Post by mgleason_3 »

dudeinjapan wrote: post #627
ditonal wrote: post #586

Earlier quoted context omitted.

If a physicists tells me something about how the solar system works, they don't have much reason to lie to me. If RobinHood tells me how clearing houses work, they have a huge reason to lie to me. Given what we say in cases like Enron, Bear Stearns, I am shocked and dismayed at the eagerness of Hacker News contributors to so readily accept whatever Robinhood tells them as 100% gospel. Where were all these experts on…

Maybe not apples-to-apples, but... I worked on Lehman's Tokyo electronic trading desk in 2008. When we went bankrupt, it wasn't our clients, or even the exchanges which stopped our trading. It was our clearing banks. Interestingly, we weren't cutoff uniformly in all markets. NY desk was trading about 75% of regular volume for 4 days into the bankruptcy before someone (SEC?) told them to knock it off. There's a lot go…

“I’m as pissed as anyone that they shut off trading,”

Robinhood did not halt trading or shut off trading.

Robinhood prevented _buying_ Gamestop and only allowed selling.

That’s entirely different. It can only do one thing - drive the price down which is market manipulation. It’s supposed to be illegal.

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