321–330 of 348 posts
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If a short squeeze happens that by definition means the shorts were over zealous. If a market allows shorts it should allow a squeeze as a mechanism of balance.
The market allows short squeezes. SEC too. What the SEC doesn't allow is the deliberate triggering of short squeezes.
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I don't understand. If you have regulation, you need people that interpret and enforce that regulation. In other words, you need trust. If your system is predicated on trust, you can dispense with the blockchain that does a lot of unnecessary busy work, and replace it by a few guys with an Excel spreadsheet or two, and regulate them. The environment will thank you.
This is such a nonsensical argument. Crypto is a huge space with myriad benefits, which are not negated by having some elements regulated. For example, perhaps you are in favor of crypto because it is (i) harder for a state to seize or (ii) impossible for a single state to inflate. Those are in part possible because of the distributed decentralized nature of cryptocurrency. Being in favor of those two things does not…
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The 2008 bubble was largely driven by the deregulation of financial instruments (and non-regulation of new instruments) in the late 1990 and early 2000.
It was also driven by easy fed dollars and banks that knew they'd be bailed out.
Bank upper management just didn't care that they'd be bailed out or not because their incentives were on fairly short term horizons.
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Economically speaking insider trading represents a net positive for the market as it brings information onto the market sooner, allows it to reach a better price sooner. The only people hurt by insider trading are those to whom the person doing insider trading has a fiduciary duty, which for a Coinbase employee would be Coinbase itself. Other markets like commodities and real estate have gotten along perfectly fine w…
> Economically speaking insider trading represents a net positive for the market as it brings information onto the market sooner, allows it to reach a better price sooner. No, economically speaking insider trading just hurts the market, as all free market models work only in so far as all actors have equal access to information. Unequal information makes the market less efficient. Hidden information that is not used…
You need to investigate some better models. The useful ones don't assume equal access to information. Uniform access to information doesn't exist, and moreover distribution of information is one of the functions of the market. Information itself is a good which can only be acquired at a cost. Perfect information (not perfectly equal information) would indeed improve efficiency, but that doesn't happen on its own. Unequal information is better for market efficiency than less information; in a trade between A and B, both A and B knowing a relevant fact is ideal but only A or B knowing leads to better trades than neither knowing, provided neither party is actively deceiving the other about the nature of the goods being exchanged.
> It is a type of fraud - I'm acting as if the publicly known information is up to date, but in fact I know something the rest of the market doesn't about the value of the good I'm trading.
"Acting as if" is not the same as making an actionable claim. You are under no obligation to advise anyone on future market conditions. It's only fraud if you make the trade under false pretenses which, unless you actually claimed to be making the trade based on only public information, is not happening here. The product being sold is exactly as described; whatever might happen in the future to affect its market value is out of scope.
> It's like selling beans that have been publicly shown to be magical, while I happen to know the public show was staged and they are in fact normal beans.
There's nothing wrong that so long as you're not misrepresenting your product as having some sort of magic properties (which would include being involved in that staged demonstration). There is no fraud here as long as you do not claim that they are magical. What anyone else might claim about them and the motivations for buying them are not your concern. Your role is simply to provide the advertised product.
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This is such a nonsensical argument. Crypto is a huge space with myriad benefits, which are not negated by having some elements regulated. For example, perhaps you are in favor of crypto because it is (i) harder for a state to seize or (ii) impossible for a single state to inflate. Those are in part possible because of the distributed decentralized nature of cryptocurrency. Being in favor of those two things does not…
So, you're saying, the government can arrest thieves and hackers, ban wash trading, ban insider trading (and, presumably, enforce that), but cannot ban or seize crypto itself?
Is this insider trading according to the law? Nonpublic information isn't being used to trade public stocks; it's being used to trade assets that don't appear to be regulated securities.
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Accredited investor rules was an example of not having a even playing field. The market is not open to everyone which contributes to unfair outcomes. I'd welcome reforms to transparency as well there, as lack of transparency also contributes to unfair outcomes (the company can exploit investors).
> Accredited investor rules was an example of not having a even playing field. 1. Having an income that qualifies you as an accredited investor doesn't mean that you will have access to higher quality investments. 2. Even if you don't qualify as an accredited investor, you probably still have access to the same set of investments that a capital-poor accredited investor has access to. As an accredited investor, I've n…
(WeFunder, specifically, tries to skirt the accredited investor regulation and offers tiny (they advertise "as little as $100") investments to non-accredited investors. It's not clear to me how they're doing that legally other than handwaving "crowdfunding platform" around.)
Accredited investor status itself doesn't give you access to higher quality investments, but it keeps the poors out from being able to angel invest in their professional network. If I'm not an accredited investor and I have $10k that I've saved up and want to plow into my kid's friend's uncle's big thing that they're working on? It might turn out that the uncle's a total scam artist or the next Elon Musk, but it's my $10k. I'm allowed to go to vegas and put it all on black if I wanted to, so why aren't I allowed to invest same as an accredited investor?
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2008 crash is a decent example of finance being rigged. Robinhood's handling of GameStop is not. They may be a pretty shit brokerage, but DTCC collateral requirements hit everybody , and they just didn't have enough money lying around to deal with that in the way a lot of customers would have wanted.
So you agree the DTCC doesn't know how to manage their collateral requirements? It's one of their primary reasons for existing. It seems like something they should've been able to foresee or handle, rather than force brokerages into PCO when they already lost control of the situation. It's really akin to the LME trade halt fiasco, which then became even worse when they retroactively reversed trades. The point is, whe…
The LME situation and the DTCC/meme stock situation have very little in common, besides both of them being triggered by extreme price movement. It's much easier to argue that LME was rigging the game, but commodities are a different market that hit a little closer to home when things go bad. If the LME let short hedges get vaporized, the idea that they should have been left out to dry would be very unpopular in the fallout of that situation. Maybe they should have, but you're going to have a hard time convincing people not involved in finance of that.
Unless you are an institutional trader, the market isn't out to get you specifically. You aren't even shit on their shoe. You're shit three counties over, if that. They barely think about you. They barely even know you exist. You're background noise that most large players need to filter out to find out who is actually on the other end of the trade. Financial markets are rigged in the sense that big players will be bailed out and cut loose no matter what. They are not rigged in the sense that a retail investor can be on the losing end of a trade because they didn't understand what's actually happening.