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WallStreetBets vs WallStreet: It's not about the money anymore

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Re: WallStreetBets vs WallStreet: It's not about the money anymore

#371

Post by kgwgk »

aynyc wrote: post #293
JumpCrisscross wrote: post #179

Earlier quoted context omitted.

> who's the decider/calculator of the risk? The lender. As in all loans. As is in every detail described in one’s margin contract.

I looked at my margin document, other than Federal Reserve requirements and account restriction, there is no provision stating they can block a specific eligible stock as long as I meet their margin requirement.

Their margin requirement may be linked to the name so increasing the margin requirement to 100% would be a way to block the use of margin.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#372

Post by function_seven »

52-6F-62 wrote: post #279
yanderekko wrote: post #275

Earlier quoted context omitted.

>If you put the wrong oil in your car because you got it for free, and your engine failed then whose fault is it? If it's the wrong grade then it's the wrong oil, even if it says it's "high performance*". If someone gave you that oil under fraudulent pretenses then it would absolutely be their fault.. Now to say that Robinhood is engaging in outright fraud, but having your service expectations subverted like this is…

But they didn't. The oil just sat on the shelf, and they picked it out because it was free.

I’m not following your analogy here. If a bottle of “10-40W” oil is offered to me for free, but it really contains olive oil, it’s my fault for trusting the label?

I mean, pragmatically speaking a buyer should be more wary of a situation like this. But motor oil is not the same thing as brokerages. It is very common for trades to be executed with no fee these days. It’s a market norm.

It is not a market norm at AutoZone to have $5 quarts of oil sitting next to free quarts of oil.

Add in any case, ethically speaking, it is still the fault of whoever mislabeled that olive oil.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#373

Post by fock »

kev_da_dev wrote: post #50
bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

How is disabling purchases and broker-wide outages not bolstering hedge funds? It's government intervention no matter how you look at it. Just because it's not a direct capital infusion does not make it any less bad

in the current situation, I don't think that private buyers trying the short squeeze (for which you have to hold) are really the driving force anymore. I think someone at robinhood had the (good) idea that at the current price, most people can realize a nice buck (by selling), while allowing them to buy a stock, which will probably go down a factor of 200 over the next year and currently fluctuates -50%/100% on a 20minute schedule required a casino license.

The whole idea of the short squeeze is that the hedgefunds can't buy anything anymore and the lenders want their stuff back. And if they are still overshorted and the lenders don't like to bleed them first, before initiating the squeeze I don't think that this somehow hurts retail investors. Maybe it benefits the lenders who can nicely bleed both shortsellers and the WSB+muskalike-crowd, but at the current price, where the stock has actually gone up quite a bit but stabilized, it seems quite clear that this thing is decided by the lenders now. Do they want to play the crazy game for a near bankrupt company and demand their loans from Melvin or Co. (which would probably result in fast default and them not seeing a substantial amount of their shares again with the others reduced to a pennystock) or do they just sail along, taxing the narcissistic sociopaths on one side, while slowly selling off their actual stock to then be bought by those and returned to them. I guess they decided for option 2 and I think they are not as dumb and chaddy as they look to you ;).

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#374

Post by yanderekko »

52-6F-62 wrote: post #279
yanderekko wrote: post #275

Earlier quoted context omitted.

>If you put the wrong oil in your car because you got it for free, and your engine failed then whose fault is it? If it's the wrong grade then it's the wrong oil, even if it says it's "high performance*". If someone gave you that oil under fraudulent pretenses then it would absolutely be their fault.. Now to say that Robinhood is engaging in outright fraud, but having your service expectations subverted like this is…

But they didn't. The oil just sat on the shelf, and they picked it out because it was free.

If the oil was mislabeled it's still the store's responsibility.

In the case of Robinhood, I can't just liquidate my money out of Robinhood and move it into a new platform and buy GME today if I wanted. I had a reasonable expectation that I'd be able to do this yesterday, and now that expectation was subverted in a way that's costly/inconvenient to me even if the service is free I have every right to complain.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#375

Post by WorldMaker »

dumbfounder wrote: post #292
lifeslogit wrote: post #154

Earlier quoted context omitted.

That is very interesting to hear! I imagined that this was the perfect storm for HFT. Lots of retail investors using default exchange routing settings via brokers like Robinhood and ETrade that sell their order flow. Meanwhile these retail investors are buying small amounts of very volatile equities! Lots of opportunity to rack up lots of pennies.

So RobinHood is stealing information from the poor to give to the rich? To make them richer? Surely I am not the first to notice this irony.

Yeah, RobinHood and Citadel Securities (that has been backing most of the options trades here) aren't at all the good guys either. Almost all of Wall Street is a money shuffle, and the "free" trades at retail had plenty of hands skimming the pot and making their own profits.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#376

Post by willis936 »

tomp wrote: post #335
willis936 wrote: post #209

Earlier quoted context omitted.

I’ll see it only after a liberal party controls the executive and legislative branch in the absence of a filibuster failing to implement meaningful change.

The same liberal party that bailed out Wall Street last time?

The very same. At least they have a branch of progressives and there is a pretense of moving towards a more fair ruleset.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#377

Post by boringg »

bluecalm wrote: post #213
boringg wrote: post #27

Feel like the platforms are helping out hedge funds by making it challenging to put more pressure on the short squeeze before Friday. Sounds a bit like a cartel in co-ordinating activity under the guise of "reducing risk exposure" - shepherded on by the Financial media. Trade itself is no longer on technical merits (except those in early) but have you looked at valuations across the stock market these days -- everyth…

That everything is off is just your assessment which a lot of people disagree with. When it's difficult to do business and make better use of the money then equites are more attractive place to keep your money. This is especially true with a lot of additional money supply and low interest rates. It makes perfect sense to me why we had the run we had during the pandemic. Anything else would be a big surprise.

Right ... that works until you have decide to move your money out of equities. At which point it is a race to the exit. Once the next rotation happens don't get caught being flat footed.

And I disagree - I do think everything is off (not just the markets being highly volatile). With many people making record money this year and human suffering being at the highest levels and considerable outrage everywhere, it feels like something is breaking down in society (at least North America). There is something very amiss right now, which I am sure we will be able to determine with the benefit of hindsight. Hopefully we can pick up and move on quickly post pandemic.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#378

Post by asdff »

TameAntelope wrote: post #181
willis936 wrote: post #70

Earlier quoted context omitted.

I have seen very little evidence of people investing money in the stock market that is not budgeted as “gambling” (ie disposable income). WSB embraces the idea that memetrading is gambling. This is not a surprise to anyone but a few outsiders.

Then you have not been paying attention to WSB for very long. It's full of degenerate gamblers, so many loss porn posts come from people saying, "How will I pay my rent this month?" Most of the time, WSB is a community to commiserate about losses and lie about gains.

I feel like a lot of that sort of rhetoric on there is highly highly sarcastic. Half the time “how will I pay the rent?” Is followed by something along the lines of “my wifes boyfriend will never forgive me” the very next sentence.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#379

Post by cbslinger »

philip1209 wrote: post #246
bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

A lens to look at this through is - "why is short selling allowed?" Advocates cite increased "liquidity." But, does society really benefit? Short-selling really just lets trading firms extract value from the failure of others. In that sense - professional trading firms that participate in short-selling could be grouped into a monolithic "Wall Street" in the sense that they are extracting value without a benefit for s…

A company existing is not just automatically a good thing. If there weren't any Gamestop stores anymore that opens up the retail space for, say, Micro Center or Fry's Electronics to step in and fill that role and do a better job, create more jobs, etc. That's true also for all the other resources Gamestop consumes, their exclusive contracts with businesses, pre-order bonuses, underpaid labor, whatever.

There's a term, 'Zombie Corporations' for businesses that are both stagnant and also generally aren't very beloved by their customers, but are still able to stay in business due to some localized monopolistic factors. Those kinds of companies exist in every sector and still 'make money' but they're usually the kind of companies short sellers target.

Getting rid of them is not some fundamental ill of society - yes it could in theory make some people lose their jobs, but it also keeps the economy going. If this kind of things didn't happen it would be impossible for new businesses to come up and with those new businesses new job creation, new ideas, etc.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#380

Post by ddevault »

fairity wrote: post #212
mancerayder wrote: post #55

They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system? A CEO of one company can call up his connections in retail trading platform firms, CNBC, and Nasdaq and protect his profits? Why is Reddit the scandal and not that? Reddit is full of rocket emojis and YOLO jokes. But what we see here, especially with the moralizing about gambling, is an…

> They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system? I can almost guarantee you that this decision was made to protect retail clients -- not as part of some conspiracy against them. It's very clear that retail is going to lose their shirts in the end of all of this, and by blocking new buy orders, the brokerage is effectively protecting…

It's not Robinhood's responsibility to protect retail clients. They are not financial advisers. By doing this they have violated their mandate. Why? Maybe it's for their clients, but when you consider their incentives, that seems at best suspiciously convenient, and at worst deliberate market manipulation to save their ass.
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