6 ms·

Why is the solution always to either shut something down or to regulate? Why is educating people to act more responsibly never ever considered an option?

bko 6y ago
I'm not arguing that shutting down or regulating is the best solution, but it is the most likely outcome. How would one go about educating people? There's been a lot of ink spilled on this story and it seems to have captured the public's imagination. Not all of the reporting is accurate, but all the major media outlets get out the point that this is essentially reckless market manipulation by a group of loosely banded individuals coordinating online. I doubt anyone participating in this will cut it out if just told to by some authoritative body.
- comeonseriously 6y ago
  > ... essentially reckless market manipulation by a group of loosely banded individuals coordinating online. You're talking about the hedge funds, right?
  - fractionalhare 6y ago
    Despite the fact that there are widely repeated accusations of market manipulation by specific hedge funds on reddit, there is no actual evidence for it. I'm not saying reddit is manipulating the market either (maybe! I dunno). Just clarifying this point.
- bcruddy 6y ago
  How is borrowing then selling 140% of the available shares legal? How is that not market manipulation? This is the market at work. This was taken too far and the market has a method for correcting this behavior and we're seeing it now. The difference is retail is going to win AND there's no backroom deal to be made to stop the bleeding. We NEED financial reform but we need to look at what allowed this situation in the first place, not ways to silence what are effectively the whistle blowers.
  - bko 6y ago
    > How is borrowing then selling 140% of the available shares legal? How is that not market manipulation? Why wouldn't someone be allowed to lend out a security they own to someone else? If not allowed, why wouldn't I be allowed to make an agreement where I pay you the difference between a future stock price and some fixed value? > The difference is retail is going to win AND there's no backroom deal to be made to stop the bleeding. The backroom deal will be a phone call to the CEO of reddit, discord, disqus and similar and tell them to cut it out. Simple as that. No coordinating mechanism, this will die.
    - nixass 6y ago
      > Why wouldn't someone be allowed to lend out a security they own to someone else? Can you explain what individual or company can own 140% of available shares?
  - parsimo2010 6y ago
    You seem to be hinting at the idea that naked short selling should be illegal, which it has been for over a decade. So here’s a minor clarification for you: The short interest (140% or more for GME) is calculated on the public float. There is a significant chunk of GameStop shares that are not publicly accessible, but could be borrowed against (the shares do exist). If you consider the total outstanding shares of GME, then only 99% or so of the company was shorted. So it’s a crazy high amount, but there is no proof that any (actually illegal) naked short selling was occurring. So long as the people holding the non-public portion allowed their shares to be borrowed, then nothing illegal is going on. If, in the unlikely situation that EVERYONE needed to close their short positions at once, these non-public shares could actually be sold if the owner wanted to. Of course, they could dictate a really high price if the public market volume isn’t enough to close out the short positions in the standard three day period. The reason that short interest is calculated on public float is because that makes the most sense for normal situations. We just happen to have stumbled into one of those unusual situations.
    - esrauch 6y ago
comeonseriously 6y ago
Arguably, because we don't put people into office who are able and/or willing to require people to act responsibly. If we chose our politicians more carefully, we'd see better results. But we don't, so we get what we choose.
- spacemanmatt 6y ago
  For everyone willing to talk about "key leverage points in the social graph" it's weird how they won't call those people leaders.
  - jessaustin 6y ago
    For Americans, talking about "leadership" as if it exists is like believing in the Tooth Fairy.
webmobdev 6y ago
We require regulation, just as we require the police, because education doesn't matter to people willing to disregard ethics and harm others for their own gains.
- Person5478 6y ago
  Perhaps I'm misunderstanding you, are you implying that what wsb is doing is unethical?
  - snowwrestler 6y ago
    There are two kinds of people involved: those trying to make a point and those trying to make a buck. Some people trying to make a point are going to make a lot of bucks as well. And some people trying to make a buck are going to lose a lot of money. Not everyone can get out of an inflated stock with gains, pretty much by definition. And those least likely to understand the point are also probably the ones buying into the stock late (and at an inflated price). The mix of who makes and loses money is going to affect how society sees this. It will look somewhere between an egalitarian social movement, or a few now-wealthy loudmouths who took everyone else for a ride. Making money in a bubble is all about timing... and it gets ethically complicated when some traders have control of the timing (in this case by declaring whether the vendetta against Melvin is over or not). Note that I have made no ethical considerations for Melvin; they knew what game they were playing and are not victims here IMO.
  - webmobdev 6y ago
    No, I was broadly commenting on why education cannot trump regulation. For the sake of argument, one can say that actions of forums like WSB should also be regulated to protect them, just like laws for compulsory wearing of helmet (while riding two-wheelers) or putting seatbelts (while riding cars) exist, even though one would think that education and common sense would make them do this automatically out of self-preservation instincts. But since I am not an expert in finance or stock markets, I really am not in any sound position to comment on the specifics here. My broader general argument (not at all related to WSB or the financial industry) is just that education alone is insufficient, and regulation is often required too for maximum efficacy.
tsimionescu 6y ago
If you believe what is happening is wrong, it needs to be regulated so that it doesn't happen. If you believe it's not wrong, it shouldn't be either regulated nor educated against. Now, if you do believe it's wrong and it should be educated against, how would this work? Do you think that this is wrong beacsue people are going to lose money? Maybe then it makes some sense to give better education, but this is obviously a special moment and it's hard to educate people so that they don't engage in a social phenomenon. Not to mention, a lot of educated people may be making some pretty educated bets and winning a lot of money; other educated people may just be 'paying' money for a cause that they believe in.

bko 6y ago

I'm not arguing that shutting down or regulating is the best solution, but it is the most likely outcome. How would one go about educating people? There's been a lot of ink spilled on this story and it seems to have captured the public's imagination. Not all of the reporting is accurate, but all the major media outlets get out the point that this is essentially reckless market manipulation by a group of loosely banded individuals coordinating online. I doubt anyone participating in this will cut it out if just told to by some authoritative body.

comeonseriously 6y ago
> ... essentially reckless market manipulation by a group of loosely banded individuals coordinating online. You're talking about the hedge funds, right?
- fractionalhare 6y ago
  Despite the fact that there are widely repeated accusations of market manipulation by specific hedge funds on reddit, there is no actual evidence for it. I'm not saying reddit is manipulating the market either (maybe! I dunno). Just clarifying this point.
bcruddy 6y ago
How is borrowing then selling 140% of the available shares legal? How is that not market manipulation? This is the market at work. This was taken too far and the market has a method for correcting this behavior and we're seeing it now. The difference is retail is going to win AND there's no backroom deal to be made to stop the bleeding. We NEED financial reform but we need to look at what allowed this situation in the first place, not ways to silence what are effectively the whistle blowers.
- bko 6y ago
  > How is borrowing then selling 140% of the available shares legal? How is that not market manipulation? Why wouldn't someone be allowed to lend out a security they own to someone else? If not allowed, why wouldn't I be allowed to make an agreement where I pay you the difference between a future stock price and some fixed value? > The difference is retail is going to win AND there's no backroom deal to be made to stop the bleeding. The backroom deal will be a phone call to the CEO of reddit, discord, disqus and similar and tell them to cut it out. Simple as that. No coordinating mechanism, this will die.
  - nixass 6y ago
    > Why wouldn't someone be allowed to lend out a security they own to someone else? Can you explain what individual or company can own 140% of available shares?
- parsimo2010 6y ago
  You seem to be hinting at the idea that naked short selling should be illegal, which it has been for over a decade. So here’s a minor clarification for you: The short interest (140% or more for GME) is calculated on the public float. There is a significant chunk of GameStop shares that are not publicly accessible, but could be borrowed against (the shares do exist). If you consider the total outstanding shares of GME, then only 99% or so of the company was shorted. So it’s a crazy high amount, but there is no proof that any (actually illegal) naked short selling was occurring. So long as the people holding the non-public portion allowed their shares to be borrowed, then nothing illegal is going on. If, in the unlikely situation that EVERYONE needed to close their short positions at once, these non-public shares could actually be sold if the owner wanted to. Of course, they could dictate a really high price if the public market volume isn’t enough to close out the short positions in the standard three day period. The reason that short interest is calculated on public float is because that makes the most sense for normal situations. We just happen to have stumbled into one of those unusual situations.
  - esrauch 6y ago

comeonseriously 6y ago

Arguably, because we don't put people into office who are able and/or willing to require people to act responsibly. If we chose our politicians more carefully, we'd see better results. But we don't, so we get what we choose.

spacemanmatt 6y ago
For everyone willing to talk about "key leverage points in the social graph" it's weird how they won't call those people leaders.
- jessaustin 6y ago
  For Americans, talking about "leadership" as if it exists is like believing in the Tooth Fairy.

webmobdev 6y ago

We require regulation, just as we require the police, because education doesn't matter to people willing to disregard ethics and harm others for their own gains.

Person5478 6y ago
Perhaps I'm misunderstanding you, are you implying that what wsb is doing is unethical?
- snowwrestler 6y ago
  There are two kinds of people involved: those trying to make a point and those trying to make a buck. Some people trying to make a point are going to make a lot of bucks as well. And some people trying to make a buck are going to lose a lot of money. Not everyone can get out of an inflated stock with gains, pretty much by definition. And those least likely to understand the point are also probably the ones buying into the stock late (and at an inflated price). The mix of who makes and loses money is going to affect how society sees this. It will look somewhere between an egalitarian social movement, or a few now-wealthy loudmouths who took everyone else for a ride. Making money in a bubble is all about timing... and it gets ethically complicated when some traders have control of the timing (in this case by declaring whether the vendetta against Melvin is over or not). Note that I have made no ethical considerations for Melvin; they knew what game they were playing and are not victims here IMO.
- webmobdev 6y ago
  No, I was broadly commenting on why education cannot trump regulation. For the sake of argument, one can say that actions of forums like WSB should also be regulated to protect them, just like laws for compulsory wearing of helmet (while riding two-wheelers) or putting seatbelts (while riding cars) exist, even though one would think that education and common sense would make them do this automatically out of self-preservation instincts. But since I am not an expert in finance or stock markets, I really am not in any sound position to comment on the specifics here. My broader general argument (not at all related to WSB or the financial industry) is just that education alone is insufficient, and regulation is often required too for maximum efficacy.

tsimionescu 6y ago

If you believe what is happening is wrong, it needs to be regulated so that it doesn't happen. If you believe it's not wrong, it shouldn't be either regulated nor educated against. Now, if you do believe it's wrong and it should be educated against, how would this work? Do you think that this is wrong beacsue people are going to lose money? Maybe then it makes some sense to give better education, but this is obviously a special moment and it's hard to educate people so that they don't engage in a social phenomenon. Not to mention, a lot of educated people may be making some pretty educated bets and winning a lot of money; other educated people may just be 'paying' money for a cause that they believe in.