A Corner in Piggly Wiggly (1959) • Hacker News Board

Re: A Corner in Piggly Wiggly (1959)

#51

Post by ummonk » Sat, Jan 30, 2021, 11:07 AM UTC

gruez wrote: post #41

ummonk wrote: post #19

Earlier quoted context omitted.

I guarantee you the interests of institutions on the short side of the stock factored in to the decision to raise deposit requirements. And the Interactive Brokers chairman is explicit about why he chose to block buys.

> I guarantee you the interests of institutions on the short side of the stock factored in to the decision to raise deposit requirements. Is there any evidence for this, other than the general feeling of "rich people are powerful, therefore they must have been some meddling by them"? The formula for determining the deposit requirements is publicly documented: https://twitter.com/kralctrebor/status/1354952686165225478…

The twitter thread you posted does have the evidence in the update https://twitter.com/KralcTrebor/status/1355172567242469377

And it's an open secret that Wall Street institutions colluding / bending ethics and the law is basically business as usual. (In this particular case I talked to a couple people I know who work in market makers and hedge funds and they took it as given that the requirements would have been put in place to protect short selling institutions)

Re: A Corner in Piggly Wiggly (1959)

#52

Post by jfk13 » Sat, Jan 30, 2021, 11:21 AM UTC

chrisco255 wrote: post #46

arcticbull wrote: post #36

Earlier quoted context omitted.

Plenty of people still use ETC lol. That's crypto for ya, though. This is such a great example, because it's an obvious case of "trustless for you but none for me thanks" -- if Vitalik believed that "code is law" was better than having the ability to amend the transaction, he'd just be on ETC dealing with the mess. If grandma's life savings gets stolen, well sucks for grandma. When it's Vitalik, well, it's time to fo…

I mean, it was up to the community at large to ultimately support the new fork. As an example, Bitcoin forked into Bitcoin Cash, but the community largely stuck with the main chain. It's really a market-driven decision which chains or forks thrive and which ones don't. At any rate, it's more and more expensive to do forks as a chain grows in maturity and adoption.

Sure, but do you think "the community at large" really makes such decisions in any meaningful way? Overwhelmingly, "the community" blindly follows a few leaders who happen to have a high profile or make the most noise in the right forums.

Which means that in practice, these "immutable" blockchains and their "code-is-law" contracts are immutable for the masses, but can be modified (in effect, by forking) when it's in the interest of a few powerful individuals/entities to do so.

So what have we gained, really?

Re: A Corner in Piggly Wiggly (1959)

#53

Post by Marazan » Sat, Jan 30, 2021, 11:23 AM UTC

It is interesting to compare to the Porsche-Volkswagon squeeze of 2008.

In that one Porsche reaped the rewards of creating the squeeze

Re: A Corner in Piggly Wiggly (1959)

#54

Post by throwaway2245 » Sat, Jan 30, 2021, 12:19 PM UTC

gruez wrote: post #6

imgabe wrote: post #5

Gamestop made me think of this. The moral of the story is that when you beat Wall Street at their own game, they will change the rules on you so they win anyway. Something to be cautious about in the current situation.

>they will change the rules on you so they win anyway Are you referring to how several popular brokerages prevented customers from opening new positions? That's due to them unable to fulfill deposit requirements on such volatile stocks, not because of some conspiracy by wall st to "change the rules on you so they win anyway". see: https://www.bloomberg.com/opinion/articles/2021-01-29/reddit... , under heading "Why di…

"oh, now that you're winning, there's this extra unwritten rule that I forgot to tell you about..."

Re: A Corner in Piggly Wiggly (1959)

#55

Post by mcherm » Sat, Jan 30, 2021, 12:37 PM UTC

taigeair wrote: post #15

What's the chance they suspend further trading of GME stock?

100% as it already happened.

The exchange didn't suspend trading, several brokers widely used by small investors did. And some of them didn't suspend all trading, just purchases (sales were still allowed).

There may or may not have been malicious intent, but the EFFECT is much stronger and less fair than a hault to trading would have been: it forces small investors (but not big ones) to push the stock in a particular direction.

Re: A Corner in Piggly Wiggly (1959)

#56

Post by throwaway2245 » Sat, Jan 30, 2021, 12:51 PM UTC

tines wrote: post #3

> The stock went up wildly, reaching a high of 124. At this point the Exchange suspended further trading & postponed the short sellers' delivery deadline. This resulted in eventual bankruptcy for Saunders & he was finally forced to step out of the Pigp]y [sic] Wiggly Company. Bizarre. What grounds did they have for doing this? Prima facie there are some similarities between this and the GME situation, I wonder if the…

> Pigp]y [sic] Wiggly

This error is presumably due to failed OCR character recognition.

I can't access the original article (which is linked for subscribers) but it seems to be because the word is in italics? Or might the brand have had it's own stylistic ligature/logotype at the New Yorker?

Re: A Corner in Piggly Wiggly (1959)

#57

Post by yomly » Sat, Jan 30, 2021, 1:31 PM UTC

gruez wrote: post #41

ummonk wrote: post #19

Earlier quoted context omitted.

I guarantee you the interests of institutions on the short side of the stock factored in to the decision to raise deposit requirements. And the Interactive Brokers chairman is explicit about why he chose to block buys.

> I guarantee you the interests of institutions on the short side of the stock factored in to the decision to raise deposit requirements. Is there any evidence for this, other than the general feeling of "rich people are powerful, therefore they must have been some meddling by them"? The formula for determining the deposit requirements is publicly documented: https://twitter.com/kralctrebor/status/1354952686165225478…

I find it curious when people give these institutions the benefit of the doubt. It flies in the face of the history of the industry and also what we know about basic human nature.

I've moved around these types of social circles to know that any levers that can be pulled will be pulled.

We also know that for large financial institutions, breaking the law is usually just a cost of doing business. Tangential, but GS was happy to facilitate 1MDB, and HSBC empower money launderers...

In any case it is speculation so my opinion carries no real weight over yours, but it does make me wonder what has coloured my world view to be so cynical/nihilistic

Re: A Corner in Piggly Wiggly (1959)

#58

Post by hahajk » Sat, Jan 30, 2021, 1:44 PM UTC

gruez wrote: post #41

ummonk wrote: post #19

Earlier quoted context omitted.

I guarantee you the interests of institutions on the short side of the stock factored in to the decision to raise deposit requirements. And the Interactive Brokers chairman is explicit about why he chose to block buys.

> I guarantee you the interests of institutions on the short side of the stock factored in to the decision to raise deposit requirements. Is there any evidence for this, other than the general feeling of "rich people are powerful, therefore they must have been some meddling by them"? The formula for determining the deposit requirements is publicly documented: https://twitter.com/kralctrebor/status/1354952686165225478…

> Depending on the net of buys/sells, RH is on the hook to pay or recieve that net cash. That’s credit risk.

Except in RH case, their customers have already transferred money from their bank account to RH. RH should have 100% of the money they need for normal buys. The reasoning given doesn’t actually make sense.

(unless it was margin accounts that were the problem, in which case RH should stop issuing margin. or the “instant deposit” feature. They could just disable that until they could afford it again.)

Re: A Corner in Piggly Wiggly (1959)

#59

Post by iso1631 » Sat, Jan 30, 2021, 1:58 PM UTC

ndiscussion wrote: post #12

trident5000 wrote: post #4

Earlier quoted context omitted.

Back-room deals are the backbone of America, from Politics to Business.

Yeah, I don't think it's too much of a mystery. It's almost certain that Wall Street "suggested" that someone at the exchange make this happen. Whether it was a direct $$$ bribe or a call-in to the good old boys, we will probably never have proof.

> Whether it was a direct $$$ bribe or a call-in to the good old boys, we will probably never have proof.

Which feeds into a lot of sentiment for millenials who haven't made it big with $400k a year jobs in SV.

Rich people - whose wealth has quadrupled since 1990, have spent the last 2 decades yelling at the poor to "work hard" - wages not having increased at all, but if the needle even threatens to point the other way for just a second, the rules are changed.

People working hard have seen their conditions deteriorate, house prices balloon, wages stagnant, and to top it all off yet another recession, this time one to protect old peoples health (very little risk from covid for under 45s)

In the last year the richest 10 people have made $500b in the last year, if you don't see something wrong with that you need your eyes tested.

Gamestop isn't about making money, it not even about screwing over some people trying to make theater chains go bust, it's a cry for help. It raises wealth inequality up the list of issues.

If you're earning $30k a year and working 2 jobs to pay rent, or well in to your 30s and still living in your mom's basement, you see things like this and can't be blamed for thinking the entire system is rigged against you, and you're going to lash out in any way you can. People can say "let them eat cake" or "let them invest in the nasdaq", and usually come out on top. Occasionally though they don't.

Re: A Corner in Piggly Wiggly (1959)

#60

Post by gruez » Sat, Jan 30, 2021, 2:51 PM UTC

hahajk wrote: post #58

gruez wrote: post #41

Earlier quoted context omitted.

> I guarantee you the interests of institutions on the short side of the stock factored in to the decision to raise deposit requirements. Is there any evidence for this, other than the general feeling of "rich people are powerful, therefore they must have been some meddling by them"? The formula for determining the deposit requirements is publicly documented: https://twitter.com/kralctrebor/status/1354952686165225478…

> Depending on the net of buys/sells, RH is on the hook to pay or recieve that net cash. That’s credit risk. Except in RH case, their customers have already transferred money from their bank account to RH. RH should have 100% of the money they need for normal buys. The reasoning given doesn’t actually make sense. (unless it was margin accounts that were the problem, in which case RH should stop issuing margin. or the…

>Except in RH case, their customers have already transferred money from their bank account to RH.

No, they have to front the money and they can't use customer's funds.

https://finance.yahoo.com/video/heres-why-robinhood-restrict...

And we just can't afford-- well, we're not a clearing firm, but our clearing firm simply cannot afford the cost to settle those trades. We cannot use customer funds to front that cost due to regulation. So the brokerages or the clearing firms have to go into their own pockets to do it.

>(unless it was margin accounts that were the problem, in which case RH should stop issuing margin. or the “instant deposit” feature. They could just disable that until they could afford it again.)

It's not as simple because due to settlement rules, a lot of normal transactions actually require margin. eg. selling stock A and buying stock B with the proceeds the same day. Due to T+2 settlement the money isn't actually yours until two days later.