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Statement of SEC Regarding Recent Market Volatility

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Re: Statement of SEC Regarding Recent Market Volatility

#861

Post by mancerayder »

twblalock wrote: post #700
mancerayder wrote: post #649

Earlier quoted context omitted.

Your criteria for moderating/censorship is that the post suggests a conspiracy? Are you not worried the scope might be wider than intended and the net cast snag ideas tagged as conspiracies that aren't or are later discovered to not be? Or is the criteria that it's a negative and implicates mainstream institutions? I'm asking an honest question in good faith because I'm nervous at people conflating fringe ideas and e…

There were quite a few stories about this on the front page (many of which were duplicates), and a frenzy of posters positing conspiracy theories in the comments to those posts -- stuff like accusing Robin Hood of being paid off by hedge funds, general conspiracies about market manipulation and rigging, and trolls posting WSB-style content. If I want to see a flood of fake news and conspiracy theories there are plent…

I don't think it was that bad. Also, do you have a better option?

Re: Statement of SEC Regarding Recent Market Volatility

#862

Post by fakedang »

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…

> Yes, Lehman was doing a bunch of stupid stuff, and the management under Dick were behaving like cowboys. But at the end of the day, that was the entire market at that time. What sunk Lehman was, in the end, a decision by all of the other big banks and the regulators that they’d let Lehman die because of something that might be best summarized as “lol idk sorry Dick but we’re just gonna let you go and let the Fed bail the rest of us out sorry bro lol.” Like really. That’s how it went behind those closed doors in the lairs of the lizards that control the universe. Lehman had already suffered near-death in 1994 — the world has now forgotten that Dick was the hero that saved the firm back then — and now it was to be made a sacrificial lamb for everyone else’s benefit.

I thought everyone knew this? It was an open secret that former GS CEO and Sec. Treasury Hank Paulson threw Lehman under the bus only because he was tight with Blankfein and was on bad terms with Fuld. Not to mention, Lehman was a much smaller sonofabitch challenging all the big banks.

Re: Statement of SEC Regarding Recent Market Volatility

#863

Post by [deleted] »

PartiallyTyped wrote: post #801
mike00632 wrote: post #757

Earlier quoted context omitted.

I disagreed with the statement about WSB users knowing what they're doing. Upon closer reading I think our larger points are the same. All over the internet I'm seeing sleazy promotions for GameStop stock targeted at young people who are inexperienced with trading. Anyone left holding GameStop stock when this ends will lose a lot, i.e. most of WSB.

Then you haven't been paying attention to WSB. WSB knows full well they will lose everything. We call it Loss Porn and it gets us going. When you see 5,6,7 figures in losses you get desensitised to it. It's a casino, yes we sometimes make money, we call that the first time, you know, the first one is free. Besides the jokes and the memes, Chamath went on CNBC and argued that WSB provided very good due diligence in so…

[deleted]

Re: Statement of SEC Regarding Recent Market Volatility

#864

Post by TearsInTheRain »

kypro wrote: post #828
TearsInTheRain wrote: post #815

Earlier quoted context omitted.

You want to blame the regulators but imho any system that relies solely regulators is going to be fragile. The regulators always have a chance of being captured by the industry or just plain incompetent. We have a culture of people not feeling the negative repercussions of "bad actions". Buying multiple homes was irresponsible, mortgage brokers immediately selling every loan is a moral hazard and Wall street levering…

> All of them deserve blame BUT the hedge funds and mortgage brokers got bailouts and the home buyers didnt. That smells like BS to me and anger at the people that allowed that to happen, hedge funds and bankers included, looks justified to me What bail outs are you referring to? Are you talking about the TARP program? Because didn't most of that go to banks (not hedge funds) and wasn't that actually a net benefit to…

I think maybe lay people are using hedge funds as a catch all for market participants in securities / equities. Everyone was buying CDOs, banks, pension funds, sovereign wealth funds, hedge funds etc

Re: Statement of SEC Regarding Recent Market Volatility

#865

Post by kurthr »

cardiffspaceman wrote: post #583
kurthr wrote: post #523

Earlier quoted context omitted.

I take much of what you say a reasonable wisdom, but the idea of retail investors buying weak stocks on margin and riding them to zero seems far fetched. They shouldn't be buying on margin anyway and if it goes to zero, they're going to get the margin call no matter what.

So they get the margin call partway down, they pay in to keep the stock because they have told all their friends they are long that mess, and out of pride continue to ride it down.

... so Citidel can make money up/down and sideways, front running like a real robbing hood.

Re: Statement of SEC Regarding Recent Market Volatility

#866

Post by Frost1x »

caffeine wrote: post #767
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…

This "wild new phenomenon" is just boring old market manipulation. The only thing new about it is that the perpetrator is a subreddit instead of a licensed broker/dealer or other regulated entity. The appropriate thing to do is for the SEC to subpoena Reddit and RobinHood, correlate trades with posts to prove intent to manipulate the price (which IS illegal), and charge every individual with market manipulation. Just…

What isn't market manipulation?

Seriously, market manipulation goes on all the time at grandiose scales and at small scales. This time, it's probably a handful of people who had critical mass and the mass is following suit.

If you analyze and act on a market based on an analysis, you are manipulating the market, period. HFT for example happens at time scales never conceived before and are almost undoubtedly market manipulation. The only way not to manipulate the market is to not interact with it.

It really becomes this arbitrary pointing game where subjectivity is thrown into play and favors are called as to who is or isn't breaking the rules. Yes, there are some more established less arbitrary examples of manipulation strategies, but if anyone thinks for a second these are the limit of options available to manipulate investor perceptions, they're naive.

And to spin this further, in the world of growing disinformation or selective information herding campaigns by foreign governments and political organizations swaying elections in the US, how do you deal with those sorts of targeted campaign strategies that are almost undoubtedly, in my opinion, used to manipulate markets as well?

If we can't pinpoint actors threatening the fundamental security of our nation, how do we hope to deal with this in regulating financial systems where blatant abuse is left to pass already.

Re: Statement of SEC Regarding Recent Market Volatility

#867

Post by caffeine »

throwaway2048 wrote: post #796
caffeine wrote: post #788

Earlier quoted context omitted.

I am not against charging certain actors in the 2008 crisis with fraud and manipulation either. The 2008 recession is not really a comparable event to the current GME short squeeze. It was rather a broad series of events, most of which were unfortunately legal, some of which were probably not. In that case I would be in favour of charging the ratings agencies with fraud, and possibly the financial regulators with gro…

its funny how its always a certain class of people "we didn't get", the answer isn't to shrug your shoulders and say oh well.

It's not too late to get those people too.

Re: Statement of SEC Regarding Recent Market Volatility

#868

Post by boatsie »

Frost1x wrote: post #866
caffeine wrote: post #767

Earlier quoted context omitted.

This "wild new phenomenon" is just boring old market manipulation. The only thing new about it is that the perpetrator is a subreddit instead of a licensed broker/dealer or other regulated entity. The appropriate thing to do is for the SEC to subpoena Reddit and RobinHood, correlate trades with posts to prove intent to manipulate the price (which IS illegal), and charge every individual with market manipulation. Just…

What isn't market manipulation? Seriously, market manipulation goes on all the time at grandiose scales and at small scales. This time, it's probably a handful of people who had critical mass and the mass is following suit. If you analyze and act on a market based on an analysis, you are manipulating the market, period. HFT for example happens at time scales never conceived before and are almost undoubtedly market ma…

Indeed, just like Matt Levine says everything is potentially securities fraud, everything is probably also market manipulation.

Bank analysts are constantly putting out "ratings" on stocks, price targets, etc. Articles all over the internet and tv are saying to buy this stock or that.

What I find strange is that if all the WSB subreddit just put their money into their own wsb-fund that just bought up all the heavy shorted stocks and did exactly the same thing, they'd call the fund manager a genius.

Market manipulation and pump and dump schemes should refer to the spread of dishonest information in order to move a stock price. But things like short-interest is a public number and the hedge funds self-admitted to being short these stocks--it's not like they went around saying "I got a secret tip that a hedge fund is very short this stock, let's buy it".

Shouldn't it be obvious that just taking the opposite trade to a hedge fund can't be market manipulation, unless taking the same side as a hedge fund would also be market manipulation?

Re: Statement of SEC Regarding Recent Market Volatility

#869

Post by boatsie »

orestarod wrote: post #808
fnimick wrote: post #794

Earlier quoted context omitted.

100% this. Price manipulation to trigger a short squeeze is explicitly illegal. https://www.sec.gov/investor/pubs/regsho.htm section 7. Anyone who told others to buy and hold with promises of short covering and higher prices is party to market manipulation, and it is absolutely, definitely illegal. Whether they'll be able to unmask and charge people behind the anonymity of WSB is another question though.

How can that even be remotely true. Virtually every comment there explicitly states it does not constitute financial advice.

It's funny, somehow when users click "agree" to hundred page document Terms of Service, they are held to the letter of it, yet clearly and simply saying "this is not financial advice" doesn't count.

Re: Statement of SEC Regarding Recent Market Volatility

#870

Post by caffeine »

morlockabove wrote: post #798
caffeine wrote: post #788

Earlier quoted context omitted.

I am not against charging certain actors in the 2008 crisis with fraud and manipulation either. The 2008 recession is not really a comparable event to the current GME short squeeze. It was rather a broad series of events, most of which were unfortunately legal, some of which were probably not. In that case I would be in favour of charging the ratings agencies with fraud, and possibly the financial regulators with gro…

What a very convenient point of view for the people above the law. I hope they're passing some of their gains on to you.

I voted for Obama twice. But his failure to properly prosecute the bad actors in 2008 was one of the biggest failures of his presidency in my opinion.

However:

1) It's still not too late to go after those people. Some NY DA should make his career on this.

2) The biggest financial crime ever has been the years of unmitigated QE which has consistently taken money from the income-earning class and handed it to the wealthy asset holding class. This is a bigger travesty than all other financial crimes. Not clear what to do about it, there is nobody you can vote for who thinks it should end.

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