GameStop Is Rage Against the Financial Machine • Hacker News Board

Re: GameStop Is Rage Against the Financial Machine

#891

Post by smabie » Thu, Jan 28, 2021, 4:57 AM UTC

fragmede wrote: post #626

BelenusMordred wrote: post #555

Earlier quoted context omitted.

What are the "fundamentals" of bitcoin? The only varying metric it has is the denomination you measure it in. Whether that is Venezuelan Bolivars or USD. Everything else is set in stone.

The fundamentals of bitcoin are illegal drug deals and money laundering. We can argue over how much that's worth, given the volume of BTC, and difficulty of the necessary conversion back to currency that banks/landlords/cafes/etc will accept, but that's not zero.

Pretty much all institutional investors disagree with you on that. The institutional flows into btc right now are staggering

Re: GameStop Is Rage Against the Financial Machine

#892

Post by TedDoesntTalk » Thu, Jan 28, 2021, 4:58 AM UTC

tenpies wrote: post #869

dkrich wrote: post #857

Earlier quoted context omitted.

This is the exact thing I have been trying to convince people of since this began. It started with a kernel of truth and a case to be made for a potential short squeeze but at some point along the way transitioned from a squeeze to a bubble with more and more chasing gains out of fomo and some ridiculous concocted story about the little guy vs the big bad Wall Street. This is further evident from the spillover effect…

It's literally impossible for it all to be retail money. What I think people are missing is that in about a month we'll find that "Wallstreetbets" and "retail" were also other fund managers like Ackman. This is not the first time one fund manager messed up with their short and got absolutely eaten up by other fund managers (see, famously, Herbalife where Ackman and Icahn were direct adversaries). Melvin Capital clear…

First I’ve heard this conspiracy theory and... I love it!

Re: GameStop Is Rage Against the Financial Machine

#893

Post by onlyrealcuzzo » Thu, Jan 28, 2021, 4:58 AM UTC

AdmiralAsshat wrote: post #20

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes. For the record, I’m still angry about the way workers were ripped off in Britain more than three decades ago, and about the way the little guy ended up bearing the brunt for the financial implosions of 2000 and 2008. But it looks horribly to me as though the same thing is going to happen again — and…

WSB is mostly buying options - not stocks directly and cashing out now (or at some top that could be in the future).

The people on WSB that sold their call options and made a killing are selling those options to other people on WSB who (likely) will lose everything. And the ones with diamond hands who haven't sold yet will (likely) lose everything.

So - this is like penny stock sellers in the 90s. Some little guys made a killing. Lots of little guys lost most of their savings.

It's not like all the little guys are going to win and Melvin Capital is the one paying the bill. It's like Melvin Capital went bankrupt, and some little guys on Reddit fooled a bunch of other Redditors into giving them a bunch of money.

Re: GameStop Is Rage Against the Financial Machine

#894

Post by hungryhobo » Thu, Jan 28, 2021, 4:59 AM UTC

fennecfoxen wrote: post #558

throw0101a wrote: post #506

Earlier quoted context omitted.

> At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. So basically like almost every other trade? Every buyer needs a seller and vice versa. If you're active in the market, why do you think you're right on any particular trade and the person on the other end is wrong?† * If you're buying, why is the other…

> So basically like almost every other trade? No; most trades are traded because you expect when you're "left holding the bag" that bag will have money in it.

Are you saying stocks are supposed to be riskless? And you are entitled to guaranteed gains?

Re: GameStop Is Rage Against the Financial Machine

#895

Post by adolph » Thu, Jan 28, 2021, 5:01 AM UTC

nrmitchi wrote: post #861

adolph wrote: post #815

Earlier quoted context omitted.

Maybe GameStop could leverage its position and “acquire” something with actual value, something private looking to go public. Afterwards the result would be worth more than GME did when this started? https://www.usatoday.com/story/tech/news/2018/01/29/vmware-c...

Why would anyone accept Gamestop stock as compensation for anything right now? Especially when they almost-definitely wouldn't be able to turn around and sell it right away.

Because they want to be listed in the exchange without going the traditional way. That is the concept floated for Dell using VMWare in the linked article.

Re: GameStop Is Rage Against the Financial Machine

#896

Post by smabie » Thu, Jan 28, 2021, 5:03 AM UTC

dannyw wrote: post #33

ping_pong wrote: post #4

It's really not. Because eventually retail is going to get destroyed. Yes, some hedge funds have lost their shirts, but those are the first ones who were in the short before the squeeze. The hedge funds and more importantly day trading shops making money right now are the ones who saw the activity and are goosing the stock price right now. I don't know if people realize that there are thousands of day trading shops w…

You underestimate just how much concentrated retail volume is. I have had more than ten people ask me how to buy GME. Its on the front page of everything. Bitcoin’s nearly $1T market cap is more or less all retail. Plenty of WSB posts with multi million positions. Disclosure: I long GME.

I'm not sure about the breakdown for btc, but a very large amount of btc is owned by institutions. The flows have been staggering

Re: GameStop Is Rage Against the Financial Machine

#897

Post by cwkoss » Thu, Jan 28, 2021, 5:03 AM UTC

dcolkitt wrote: post #711

noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

> A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. This is a common misconception, but fundamentally wrong. Every short sell has an equal but opposite buy. Therefore every share shorted creates a new synthetic long share. Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shar…

Is using a short to create a synthetic long shares of stock really legal/allowed/common?

If so, seems like a loophole a truck could be driven through that I'd imagine is abused frequently.

I've seen synthetic positions like this for options, but never heard about them for stocks.

Re: GameStop Is Rage Against the Financial Machine

#898

Post by smabie » Thu, Jan 28, 2021, 5:04 AM UTC

user3939382 wrote: post #645

wolverine876 wrote: post #629

How does this differ from other populist manipulation via social media? We've seen this technique used repeatedly in many domains. IMHO, it looks obviously the same in many ways. It's very effective and we should have anticipated that it would be used to move markets. I expect people on HN to recognize it. The question is, what will we do about it? It's tearing society apart and now it looks to damage our economy too…

> The question is, what will we do? IMHO the time to ask that question was when Congress reversed the rules allowing them to trade stocks. Or when it was decided it was okay for Wall St to spy on limits and front run the trades of retail investors by having their order flows sold to Wall St through the only accessible means of trading Or when you have the entire SEC staffed through a revolving door of Wall St insider…

HFT firms do not front run retail orders. This does not happen.

Re: GameStop Is Rage Against the Financial Machine

#899

Post by fragmede » Thu, Jan 28, 2021, 5:06 AM UTC

vimy wrote: post #705

fragmede wrote: post #626

Earlier quoted context omitted.

The fundamentals of bitcoin are illegal drug deals and money laundering. We can argue over how much that's worth, given the volume of BTC, and difficulty of the necessary conversion back to currency that banks/landlords/cafes/etc will accept, but that's not zero.

I don’t think that’s accurate anymore. Bitcoin ten years ago was like the www in 1995. Now we have DeFi which runs on crypto. DeFi is to banks what e-commerce was to retail stores in 2000.

To keep the analogies, GP asked if the Internet was useful for anything, I gave one - 'buying pizza on webpages' - and you're objecting to my use of the word 'webpage' vs 'app'.

Underneath all the talk of smart contracts running on ETH, behind DApps, the system at large skirts money laundering laws, and that's not a property of the system that conveniently just happened. A big reason for choosing crypto over something boring and normal, ie banks and the whole regulated financial industry, is because it skirts money laundering and other financial regulation, and because it's outside of the regulated financial industry, a lot of users don't believe they have to pay taxes on any gains made. For those that don't believe in the concept of taxes, that's very attractive.

Re: GameStop Is Rage Against the Financial Machine

#900

Post by toomuchtodo » Thu, Jan 28, 2021, 5:06 AM UTC

tenpies wrote: post #869

dkrich wrote: post #857

Earlier quoted context omitted.

This is the exact thing I have been trying to convince people of since this began. It started with a kernel of truth and a case to be made for a potential short squeeze but at some point along the way transitioned from a squeeze to a bubble with more and more chasing gains out of fomo and some ridiculous concocted story about the little guy vs the big bad Wall Street. This is further evident from the spillover effect…

It's literally impossible for it all to be retail money. What I think people are missing is that in about a month we'll find that "Wallstreetbets" and "retail" were also other fund managers like Ackman. This is not the first time one fund manager messed up with their short and got absolutely eaten up by other fund managers (see, famously, Herbalife where Ackman and Icahn were direct adversaries). Melvin Capital clear…

Here here. It’s plainly obvious from the large block buys happening in extended hours trading that most retail doesn’t have access to. This is substantial money moving. Retail isn’t the driving force, but they’re riding shotgun and being used as a scapegoat for risk management failures.