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Melvin Capital lost Billions last week alone. They needed to get bailed. You have been sold the narrative by the same people who screwed you in 2008. The bubble
by PartiallyTyped 6y ago
Melvin Capital lost Billions last week alone. They needed to get bailed. You have been sold the narrative by the same people who screwed you in 2008. The bubble is the consequence of Hedge Funds getting greedy and repeatedly screwing a "dead company", by overshorting the shares.
Don't take my word for it, take Louis Rossmann's, somebody known to stand for the little guy.
https://www.youtube.com/watch?v=4EUbJcGoYQ4 https://www.youtube.com/watch?v=4EUbJcGoYQ4
- blackrock 6y agoI wonder if there is a systemic risk behind this. Kind of like, if one domino falls, then the rest will tumble.
- PartiallyTyped 6y agoThis is partially what happened in 2008. Hedgefunds overshorted the housing market and then everything went down.
- intotheabyss 6y agoDidn't hedgefunds "overlong" the housing market? They were borrowing on margin using housing debt as collateral, but the collateral turned out to be junk, so they got margin called when that collateral tanked (the CDOs), and banks with insufficient liquidity to cover the losses either collapsed or got bailed out. Essentially the housing market bubble was people going long using worthless collateral.
- PartiallyTyped 6y agoMy understanding is that while the market crashed, certain people capitalised on the bubble breaking and kept shorting until it was ran to the ground.
- pas 6y agohttps://www.youtube.com/watch?v=lMUtU0tOmNE https://www.youtube.com/watch?v=lMUtU0tOmNE (The Pyramid Scheme that Collapsed a Nation)
- dimator 6y agoThat video was a great explanation, thank you
- rusk 6y agoSurely if it's obviously a bubble they can bet on that bubble bursting and come through the other side on top? Is it just a matter of rules around capitalisation? Surely it would be good business for them to go get that capitalisation?