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Statement of SEC Regarding Recent Market Volatility

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Re: Statement of SEC Regarding Recent Market Volatility

#881

Post by robntheh00d »

xtiansimon wrote: post #880
robntheh00d wrote: post #644

Earlier quoted context omitted.

Please stop believing you are telling me something that I do not already know. I’ve been following finance for decades. American communities are under financed because of capital extraction to improve margins. It’s a mathematical fact which carries far more weight than your hand wavy generalizations. The extraction has decimated US communities, empowered slave labor across the globe, and entrenched power in hedge fun…

> "I’ve been following finance for decades." But apparently not HN community. Your user was created 1d ago. :P

Building rep with you all is not a priority of mine

I’ve got positions in stocks that go back to the 90s, AAPL @ $5/share, etc.

I’m doing fine in real world terms. Rep in a database that can be shutdown whenever is not something to protect

Re: Statement of SEC Regarding Recent Market Volatility

#883

Post by dkrich »

content_sesh wrote: post #731
dkrich wrote: post #591

Earlier quoted context omitted.

> Its some impressive mental gymnastics to see a broker lock out all of their retail investors (remember, you were completely free to liquidate your position) and offer almost no explanation, and blame the investors for being hasty and jumping to conclusions. People don’t seem to realize that brokerages do this all the time to limit their risk. If you have less than $25k in a trading account for example, a brokerage…

> Actually the fact that they were letting people exit trades was a big clue to me that this was risk mitigation while this collusion with citadel narrative was making the rounds. Ok let's say I'm a retail investor using RH. Why should I need to divine what my brokerage is doing from Twitter posts and Reddit? My should I need to wait hours for their explanation that comes in the form of a handwavey blog post?

You shouldn’t, and I’m not defending RH’s handling of a PR crisis, which is never easy and one that every successful company eventually encounters at some point. I don’t use RH personally. My guess is they had problems with collateral obligations but didn’t have their arms around the problem so the immediate solution was to pull the plug until they could get their affairs in order. This by the way isn’t the first time they’ve had these problems. A lesser known story in wsb lore was ironyman who a few years ago opened so many box spreads before RH knew what was happening that he turned an initial $500 account into a $50,000 loss. That should never be able to happen obviously but RH was ill prepared. It’s clear in hindsight that something like what’s happening now or worse was almost inevitable. They seem to take move fast and break things to another level. The problem is that when you don’t dot your i’s in the stock market you can be fine for years and then one day get carried out in a casket. I surely would never consider using RH at any point.

My point was that a mob formed instantly with false narratives about what was happening. It’s clear now that these moves are entirely due to risk mitigation and that it had nothing to do with collusion with Citadel to cheat people. So the conversation has shifted from outright collusion to cheat retail investors to one of terrible communications.

Re: Statement of SEC Regarding Recent Market Volatility

#884

Post by sanderjd »

zaptheimpaler wrote: post #877
Aunche wrote: post #726

Earlier quoted context omitted.

We let big players partake in risky things like shorting GME above 100% float because we don't care if they lose. It's the same reason we allow them to invest in companies like Theranos. They know the risks they were getting into and will still be fine without a extra 0 in their bank account. Regular followers of WSB are aware of the risks as well, so I'm fine with them attempting a short squeeze. The problem is that…

No one who has been in WSB for a while wants the publicity, believe me. No one who has been around views this as some noble moral crusade. But WSB went from <1M subs in 2019 to 2M by end of 2020, to 6M now. We didn’t magically orchestrate it, they flocked to WSB after every media outlet in the world mentioned it for a week+ straight since Gamestop happened. Its an open forum and we don’t decide who joins, or when, or…

Yep, this is my point, not that it's necessarily WSB's fault that a bunch of regular people are jumping on a bandwagon and going to get screwed, just that it is happening and is bad. I think it is more the fault of mainstream news editors and Elon Musk than of WSB regulars.

Re: Statement of SEC Regarding Recent Market Volatility

#885

Post by jdhzzz »

sramsay wrote: post #848
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…

> intent to manipulate the price (which IS illegal) Is it "illegal price manipulation" even if it's done completely out in the open for everyone to see? (I'm seriously asking this question). I feel like laws governing market manipulation imagine secret collusion among actors that one might reasonably assume are either competing with one another or pursuing their interests independently. But in this case, the actors a…

If I post "Hey I think there is unrecognized value in this stock and I've bought the stock and a bunch of weekly calls. Here's an image of my account holdings." is that market manipulation? If I go on my youtube channel and explain my reasoning is that market manipulation?

In both cases I guess you could say "Yes." and I might agree, but I do not believe it rises to the level of illegality.

I could see the SEC looking at this, deciding that it represents collusion and should not be allowed and clawing back the "ill gotten" gains.

Blockchain based settlement anyone?

Re: Statement of SEC Regarding Recent Market Volatility

#886

Post by sanderjd »

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…

What a lot of you are missing is that this isn't happening within your little WSB playground anymore. It's just a regular stock frenzy now, it's not even really all that relevant anymore how it started.

Re: Statement of SEC Regarding Recent Market Volatility

#887

Post by sanderjd »

allenu wrote: post #712
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…

I know people at work joining Slack conversations about this and asking how to set up an account and how to buy the stock, while fully admitting they don't know anything about stock and have never bought any before. From their comments, it seems like they just want to throw their money at this since it seems like a good bet.

Yep, of course that's what is happening. There is a story all over the news that reads to most people as exactly this: "this stock is going up and making everyone rich, you are missing out".

Re: Statement of SEC Regarding Recent Market Volatility

#888

Post by sanderjd »

einpoklum wrote: post #729
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…

> But now it is people who saw the story on Good Morning America Most of those people don't own stock and don't know how to buy stock. And I would guess most of them tune out stories about stocks going up or down like they tune out commercial breaks or the business segment of news shows.

They don't know how to buy stock until they see the mainstream news say "download this app called Robinhood in order to buy this stock that will make you rich", which is why Robinhood rocketed to the top of the app store charts this week.

Most people do not tune out stories of the form "do this simple thing to get rich". It's the same reason endless coverage of the lottery gets good ratings.

Your mental model of how stock bubbles work is not accurate.

Re: Statement of SEC Regarding Recent Market Volatility

#889

Post by mike00632 »

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…

Haven't been paying attention... It must not be in the news, right? This is more of a niche interest, not getting any attention. Hard to pay attention to. You really have to be focused on WSB subreddit to know what's going on, right? It's really a few key people understand it. Anyways, yeah, GameStop is a great company with a great stock and some evil hedgefund is going to lose billions for trying to manipulate the price!

Re: Statement of SEC Regarding Recent Market Volatility

#890

Post by niktwazny »

caffeine wrote: post #870
morlockabove wrote: post #798

Earlier quoted context omitted.

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 wealt…

I believe you don't give enough credit to the scope of this pump and dump. 2008 was, more or less, a local US problem. Very few outsiders had their money in it. This one has the rest of the world's money involved as well. And that, in my opinion, moves the center of gravity of that issue into different territory. Resentment. Some involved in that raid are in it for the pain it causes those hedge funds, not for the money ( no matter how little true believers there are ). If US punishes those kids, that resentment will only grow, and it'll grow among those not in US. The growth of us vs them mentality is the last thing anyone needs
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