The response is pretty weak. The system was gamed for so long and small companies were driven out of existence.
They are pretty saying, let's see how this plays out and we figure out after the fact what to do.
Statement of SEC Regarding Recent Market Volatility
181–190 of 906 posts
Re: Statement of SEC Regarding Recent Market Volatility
#182Okay 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…
> “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.
Says Dick Fuld. I doubt that's true, though, because at the time Lehman was going under, they didn't know that all the other banks were going with them. Remember, the bailouts didn't come until a few weeks later when the money market funds broke the buck triggering $trillions of withdrawals in what would essentially be a financial system wide run on the bank. The regulators didn't like the idea that a failing bank should be bailed out (as they shouldn't), and they couldn't find a merger partner like they did with Bear Stearns, so they let it fail. The bailouts didn't come until they realized that the fallout from Lehman's failure would bring down the whole system. Yeah, Dick Fuld wasn't really any different than any of the CEO's that got a bailout, but to cast him as the good guy among the group is ridiculous.
Re: Statement of SEC Regarding Recent Market Volatility
#183Earlier quoted context omitted.
It's in the SEC rules. "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." From https://www.sec.gov/investor/pubs/regsho.htm . It's an open question whether this case is more of a natural occurrence or "a scheme to manipulate", given that it's all randos who found a Schelling point and are now hyping…
If I were the short-sellers I'd be a bit aggrieved at the SEC not going after WSB here. People keep saying that the hedge funds 'knew what they were getting into', and are therefore fair game. But they could well have thought that they were protected by this regulation. It's unlucky for them that they got squeezed by loveable retail investors rather than another hedge fund that the SEC would have no qualms about pros…
Everyone always told me, "don't invest what you can't afford to lose" and that risk mitigation is paramount.
Potentially tanking your firm on a gamble seems reckless and totally ignores the fundamentals of trading.
Re: Statement of SEC Regarding Recent Market Volatility
#184There’s a long history of similar occurrences that follow along a common line: whatever appears to support individual investors will be the path taken by politicians and regulatory bodies. Right now it appears that the public wants to be able to trade on their terms because there is this narrative that the little guy is finally sticking it to the big bad hedge funds. In reality there is probably very little truth to…
>nobody blames the speculators The hedge funds are the speculators in this case. They're playing a dangerous game where you can short more stock than what actually exists. Why this is allowed? Who the fuck knows.
Shorting more stock than what actually exists is not really that different from shorting less stock than what actually exist.
Imagine you short 50% of the outstanding shares.
Now there are 50% more long positions than outstanding shares.
It's not substantially different from having 100% or 150% more long positions than outstanding shares.
Re: Statement of SEC Regarding Recent Market Volatility
#185A 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"…
Personally, I think smart people just do this. When I got sick with COVID I cannot begin to describe the number of people who became doctors during this unprecedented time, only to send me outdated comments, articles, and speculation.
All of these people thought they were smarter than the instruction I received from a real doctor, nurse practitioner, and the CDC. These were smart people, though, and mostly (but not limited to) highly educated engineers.
Re: Statement of SEC Regarding Recent Market Volatility
#186Okay 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…
Dick Fuld has said that several times publicly, there are interviews with the FCIC where he said that there was a conspiracy against LEH, and almost every part of the meetings at the NY Fed are public knowledge...you have no behind the scenes knowledge (you sound like every person: I met X who did Y terrible thing, he isn't actually a bad guy, I am going to ignore all the public information about X and prioritise my super special "insider" knowledge).
I will ask you a different question: if LEH was so strong, why didn't the Koreans invest? Why didn't BARC invest before BK? The issue, again and again and as explained at massive length in several books, they had very shaky funding, they had a lot of stuff that no-one knew how to value, they insisted to everyone that this stuff was very very valuable...it was not. If the real estate was so valuable, why couldn't they sell it? Every single person who I have ever met in the same position (I have met many) is in denial...that is why they are in that position. Fuld made numerous mistakes that can be summarised as: he thought he had pocket aces, he had 72o.
Asking Dick Fuld for opinions on Dick Fuld is not smart.
Re: Statement of SEC Regarding Recent Market Volatility
#187A few rants that i tried answering to someone before him removing post. Free speech is allowed. Prosecuting people for free speech is impossible. A bunch of imbeciles posting on forums is similar to a bunch of imbeciles on CNBC arguing that price is too high. A hedge fund with 12 billion dollars shorting 140% of a stock and then using media to drive price to 0 is illegal. Also more then idiotic since they caused the…
I also believed that most of the shorts were naked, but the director of S3partner clearly explained how this was not the case. One stock can be shorted multiple times which is what causes the SI% to be over 100%. A lends to B, B sells to C, C lends to D and so forth. Two shorters (B,D) but only 1 original stock.
And Robinhoods closure of the trade seems reasonable in retrospect as well. If the clearing house required a higher collateral to clear trades on those tickers due to their volatility and RH did not have the liquidity to provide it then blocking the purchase of those tickers seems fair.
I can't really see anything illegal about the actions of the traders or the brokerages like Robinhood and Webull.
Re: Statement of SEC Regarding Recent Market Volatility
#188A 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"…
And then there's another guy writing smug 8-point steps! Truly the pinnacle of hacker news culture.
And then there's another guy who will comment on the comment of guy writing smug 8-points step! internet karma wohoow!
Re: Statement of SEC Regarding Recent Market Volatility
#189Earlier quoted context omitted.
Yea, unfortunately they isn't really the case right now as cash is still king and crypto is another gamble. Not to mention, who do you think could buy better hardware? Us or them? There isn't really such thing as decentralized. Its just the authority gets shifted around but the same issues can still show up.
Crypto is a technology not a gamble. It attracts gamblers but it's a technology and it's already 12 years old. I could say that an open decentralized permissionless network that has moved trillions of dollars for the last 12 years is resilient enough for me.
You could say the exact same thing about the US stock market, except it's moved orders of magnitude more money.
The risk may not be in the same spots as traditional markets, but it's there. Return doesn't come without risk, it comes because of the risk.
Re: Statement of SEC Regarding Recent Market Volatility
#190A 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"…
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