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Statement of SEC Regarding Recent Market Volatility

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Re: Statement of SEC Regarding Recent Market Volatility

#701

Post by sanderjd »

snarf21 wrote: post #566
sanderjd wrote: post #368

Earlier quoted context omitted.

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 fun…

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…

CNBC / Cramer type stuff is pretty bad too IMO, but way less mainstream than network news talking about how a single stock is a rocket ship and making all these regular joes (just like you!) oodles of cash.

Re: Statement of SEC Regarding Recent Market Volatility

#702

Post by mikestew »

mjburgess wrote: post #562
scythe wrote: post #432

Earlier quoted context omitted.

>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.

Indeed. Even then, as a term, it refers to a specific regan-era tax policy. What many on the left assume it means, is a sincere description of growth "raising the tide"; and how ridiculous an idea that is. Of course the tide has risen to an unprecedented degree in human history both since the term "trickle down" was invented; and moreso, over the last 40 years.

Even then, as a term, it refers to a specific regan-era tax policy.

The term was coined by Will Rogers about 90 years ago.

Re: Statement of SEC Regarding Recent Market Volatility

#703

Post by 7d6dyeyee »

TheOtherHobbes wrote: post #571
maedla wrote: post #439

Earlier quoted context omitted.

Yep exactly. For every one outsider that gets it right, how many are wrong? I'd wager, quite a bit

Expertise is not a Boolean. I'd trust a qualified physicist to make useful predictions about quantum devices, an EE to model an analog circuit, and a structural engineer to design a bridge that doesn't fall down. But financiers, bankers, and economists have a much less convincing record - and that's after you filter out the ones who have been caught breaking the law.

I always hear these sorts of criticisms of economists and financiers but I just don't think they hold water overall. Usually when I hear econ get flak the conversation rapidly devolves into criticisns of the abstract fairness of a solution rather then its priorities and effectiveness within the context. You see this constantly in the US when politicians from either side talk about the bank bailouts, the national debt, minimum wage, immigration, etc. Suddenly, rather than having anything resembling a sober and informed discussion about the topic and the current expert consensus, everyone just starts soapboxing about fatcats and entitlement while larping as intellectuals as they promote fringe 'theories' that happened to coincide with their political objectives. Meanwhile the actual economists and their suggestions get either drowned out or misrepresented.

Re: Statement of SEC Regarding Recent Market Volatility

#704

Post by dang »

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"…

"Please don't sneer, including at the rest of the community."

"Be kind. Don't be snarky."

https://news.ycombinator.com/newsguidelines.html

If you know more than others, that's wonderful. Please share some of what you know so the rest of us can learn. None of what you wrote here helps anyone learn—it just puts others down, makes you sound supercilious, and makes the community worse. A comment like this stuck at the top of a thread, letting off fumes and polluting the environment with meta nastiness, is one of the worst things that can happen on HN. No one intends it to happen—I'm sure you had no such intention, nor did the upvoters, but it's the default that we co-create on the internet unless we consciously do otherwise.

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...

If you just pour acid on stuff that you scorn, it may get heavily upvoted because everyone is feeling anger and scorning others is a way to relieve that feeling—but you can't pour acid without pouring it on the commons, which is extremely fragile. By getting upvoted, the damage you cause is amplified 1000x. People posting here need to take care of the commons, the same way none of us would pour toxins into a mountain lake, leave campfires burning in a dry forest, or litter in a city park.

I totally get how frustrating, nay maddening it is when others are wrong and ignorant on the internet and self-satisfied about it. But being a good citizen on HN means learning to tolerate the pressure and metabolize the irritation this activates in you. Then you can come back to the commons with a response that builds it up—for example with interesting, relevant information—rather than tearing it further apart.

Our brains are hard-wired to weight painful impressions—like internet comments that seem dumb or wrong—much more heavily than pleasurable ones, like comments we agree with. This makes it feel like HN is dominated by wrongness and dumbness and meanness to a greater extent than it actually is. We all need to become more aware of this mechanism (especially by observing our own reactions more closely) so we don't destroy this place by making the mistake of feeling like it's already been destroyed. The truth is that it's hovering precariously in between.

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...

https://news.ycombinator.com/item?id=23308098

Re: Statement of SEC Regarding Recent Market Volatility

#705

Post by temp667 »

There is really only one simple concept needed to understand what the SEC cares about.

When a big hedge fund is selling a stock short, they can do so without even borrowing it. As a result, the buyer ends up not owning it and the stock fails to deliver - called a fail.

There are a lot of easy penalities that could be applied here. Reprice based on lowest price in intervening period prior to deliver. Provide a 10% rebate per day if not delivered T+3, up to perhaps a 200% rebate. Etc.

But instead, nothing happens, the fail to deliver just continues. I took a look at Gamestop on the fail to deliver list. It's been there forever.

I don't trade, but the whole fail to deliver game seems rotten.

https://en.wikipedia.org/wiki/Failure_to_deliver

Re: Statement of SEC Regarding Recent Market Volatility

#706

Post by nvarsj »

Armisael16 wrote: post #330
nvarsj wrote: post #205

Earlier quoted context omitted.

Yes, it's a reductionist argument that can apply to literally anything. Let's just delete all user discussions on the internet, and only allow PhD granted experts to discuss things on panels where they must provide primary sources for everything. Or you could simply point out when someone is wrong, and explain why, assuming you are an expert. Then we all learn.

> Or you could simply point out when someone is wrong, and explain why, assuming you are an expert. Then we all learn. That’s pretty rare in online discussion, especially the kind with voting. The most popular argument wins, not the most correct one.

Yeah you're not wrong. I think HN is pretty good here though - we do have genuine experts (on tech) that correct people. That's why I value HN so much - I learn a lot even when I make stupid, wrong comments.

Re: Statement of SEC Regarding Recent Market Volatility

#707

Post by adjkant »

youkoulele wrote: post #137
gjsman-1000 wrote: post #3

"The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities. In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity." This shoul…

Why would the SEC punish Robinhood for not having enough collateral to trade very volatile stocks.

IANAL but some possible reasons:

1. For lying about that reason to customers

2. for not shutting down all trading on their app (allowing sells of GME without manipulated the market, even if blocking sells would also have bad effects)

3. For allegedly tipping off Citadel before shutting off GME trading (unconfirmed but they will likely investigate this claim)

Re: Statement of SEC Regarding Recent Market Volatility

#708

Post by mcguire »

seabird wrote: post #321
klodolph wrote: post #245

Earlier quoted context omitted.

> 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. I will say that I’m not too busy for this at the moment, and getting to my very basic level of understanding has required me to sort through, at the very least, a fairly decent chunk of reference material and reading interpretations and explanatio…

Not an expert myself, but I've been interested in the field for a while. The clearinghouse ultimately moves the security and money to their right place, and allows brokerages to let each side move on faith that everything will be right once the dust settles. On settlement risk, a key point is that there usually isn't a huge amount of risk. This is why DTCC is nearly imperceptible for retail players. In this case, the…

Speaking as a long term value investor who is mostly noshing po'corn and watching, I have a couple of questions:

Don't the settlement worries provide evidence of naked shorts? (Naked shorts being selling a share without being sure the share would be available at settlement? And naked shorts illegal?)

Wouldn't the normal procedure be to halt all trading until the issues had cleared up? As opposed to allowing positions to be closed, but not opened?

Re: Statement of SEC Regarding Recent Market Volatility

#709

Post by koheripbal »

CabSauce wrote: post #595
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…

I don't think anyone is saying "we don't need to investigate". They're saying "let's find evidence before we assume malintent".

The internet mob does not wait for pesky delays of "evidence"!

Re: Statement of SEC Regarding Recent Market Volatility

#710

Post by threedots »

pgAdmin4 wrote: post #569

I am naive here, can someone explain what is the economic utility of a stock market ? For example, its easy to understand utility of food, cloths, car, house, money. But I am not able to find a reason about stock market existence for day-to-day trading, where secondary stocks are traded daily after IPO. It seems none of the day-to-day trading money/profit ever goes back to business to help them to improve that busine…

Secondary markets provide liquidity for primary investors which makes making primary investments much more attractive. A stock market is just a highly organized kind of secondary market. How many VC investors there would be if they could never sell, or if they could only sell at prices which were random? Without a secondary market all investments would be permanent and that would make investing much less attractive.

Secondary markets also provide important capital allocation benefits. They make it easier for good companies to raise additional capital (e.g. via a rights issue) or buy other businesses (using their shares). They also provide an important benchmarking role allowing non-listed companies to price transactions on the basis of listed company valuations.

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