4 ms·

The part that is "honorable" about the social movement, for me at least, is that the sheer exposure of the shenanigans that wall street carries out, coupled wit

The part that is "honorable" about the social movement, for me at least, is that the sheer exposure of the shenanigans that wall street carries out, coupled with the challenging of status quo power structures (institutional vs. retail, special accredited status vs. joe on RH), has the potential to lead to general reform and positive changes. I think you're too quick to defend short selling as purely good, just as everyone else is too quick to decry it as pure evil. There's a middle ground here that's better for everyone, and a public dialectic on the scale we're seeing now is honorable and potentially effective, in my opinion.

dcolkitt 6y ago
Can anyone in this social movement articulate what exactly those “shenanigans” are and provide evidence that they’re occurring. Not that there aren’t well founded criticisms of the financial industry. But as far as I see WSB appears to have zero overlap with any of them. All I see are gross inaccuracies (“short interest over 100% means they were naked short”) and zero-evidence QAnon like conspiracy theories about hedge funds colluding to shit down Robinhood.
- gmaster1440 6y ago
  Hedgefunds overstepped and now if you own a share of GME they are required to buy it back from you at any price. They made that contract when they shorted. They planned nobody would notice or care. Now every person who notices and does the most rudimentary hello world market action (buying a stock) hurts them. This could only happen in the context of the audacious 140% shorts. This is the type of shenanigan people are referring to.
  - dcolkitt 6y ago
    A high short interest is not a sign of any sort of malfeasance. There’s no upper limit of shorting, since shares can be borrowed, sold, then borrowed again. Short interest above 100% is perfectly fine. Stocks can and do go over this imaginary line, without any fraud involved. It just means that many people disagree about the price. Allowing speculators to build up large short positions is a good thing, because it helps prevents overpriced bubble from forming. Read the actual academic research from my original look comment. If a hedge fund is willing to take the risky and thankless job of taking a large and concentrated short position, the public should be thanking them for their contribution to market efficiency.
    - gmaster1440 6y ago
      There is nothing inherently wrong in short interest above 100%, as you point out. There is no disagreement from me that it's possible to both have large short interest and at the same time have healthy economic activity devoid of fraud. The core of the social movement here is an asymmetry in who gets to engage in audacious economic transactions. Is it reserved exclusively for the institutions we should be thanking for maintaining the pillars of our society? Maybe if a fund decides to take out an audacious short position, retail investors should be able to have an equal and opposite reaction to it. The suppression from trading platforms and the asymmetric response here is only supporting the cause of the movement, and not helping with getting us closer to "thanking" the funds.
      - notahacker 6y ago
        Anyone is able to have opposite reaction to an audacious economic transaction, it just takes a lot of retail traders to have an opposite reaction to one hedge fund. So even if the hedge fund's audacious bet is horribly wrong, the smart money reacts and profits before the crowd can coordinate their pile on. Hedge funds bet against other hedge funds too. The asymmetry is who loses, and unlike the hedge funds with dreadful risk management, most of the retail traders piling in this week won't have mansions and yachts to go back to after their bad bet turns sour.
        gmaster1440 6y ago
        This is exactly where I will agree 100% with you, and why my original comment is more cautionary than optimistic.
notahacker 6y ago
But the shenanigans Wall Street carries out isn't the world's best kept secret, and this adds more noise than signals to the mix. The Wall St vs the masses narrative is entirely fake (a lot of market makers and funds already long on GME are delighted at the influx of money from novices, and some of the shorts will be little guys too), the claims of shenanigans don't really add up (Robinhood suspends trading today to benefit a partner who unwound their position... yesterday) and we're certainly not seeing middle ground arguments on shorting, or funds, or anything really. And people aren't going to get more open minded after they lose money in their first significant interaction with financial markets. I doubt reforms that might happen as a result are going to be what people piling on meme stocks want either.

dcolkitt 6y ago

Can anyone in this social movement articulate what exactly those “shenanigans” are and provide evidence that they’re occurring. Not that there aren’t well founded criticisms of the financial industry. But as far as I see WSB appears to have zero overlap with any of them. All I see are gross inaccuracies (“short interest over 100% means they were naked short”) and zero-evidence QAnon like conspiracy theories about hedge funds colluding to shit down Robinhood.

gmaster1440 6y ago
Hedgefunds overstepped and now if you own a share of GME they are required to buy it back from you at any price. They made that contract when they shorted. They planned nobody would notice or care. Now every person who notices and does the most rudimentary hello world market action (buying a stock) hurts them. This could only happen in the context of the audacious 140% shorts. This is the type of shenanigan people are referring to.
- dcolkitt 6y ago
  A high short interest is not a sign of any sort of malfeasance. There’s no upper limit of shorting, since shares can be borrowed, sold, then borrowed again. Short interest above 100% is perfectly fine. Stocks can and do go over this imaginary line, without any fraud involved. It just means that many people disagree about the price. Allowing speculators to build up large short positions is a good thing, because it helps prevents overpriced bubble from forming. Read the actual academic research from my original look comment. If a hedge fund is willing to take the risky and thankless job of taking a large and concentrated short position, the public should be thanking them for their contribution to market efficiency.
  - gmaster1440 6y ago
    There is nothing inherently wrong in short interest above 100%, as you point out. There is no disagreement from me that it's possible to both have large short interest and at the same time have healthy economic activity devoid of fraud. The core of the social movement here is an asymmetry in who gets to engage in audacious economic transactions. Is it reserved exclusively for the institutions we should be thanking for maintaining the pillars of our society? Maybe if a fund decides to take out an audacious short position, retail investors should be able to have an equal and opposite reaction to it. The suppression from trading platforms and the asymmetric response here is only supporting the cause of the movement, and not helping with getting us closer to "thanking" the funds.
    - notahacker 6y ago
      Anyone is able to have opposite reaction to an audacious economic transaction, it just takes a lot of retail traders to have an opposite reaction to one hedge fund. So even if the hedge fund's audacious bet is horribly wrong, the smart money reacts and profits before the crowd can coordinate their pile on. Hedge funds bet against other hedge funds too. The asymmetry is who loses, and unlike the hedge funds with dreadful risk management, most of the retail traders piling in this week won't have mansions and yachts to go back to after their bad bet turns sour.
      - gmaster1440 6y ago
        This is exactly where I will agree 100% with you, and why my original comment is more cautionary than optimistic.

notahacker 6y ago

But the shenanigans Wall Street carries out isn't the world's best kept secret, and this adds more noise than signals to the mix. The Wall St vs the masses narrative is entirely fake (a lot of market makers and funds already long on GME are delighted at the influx of money from novices, and some of the shorts will be little guys too), the claims of shenanigans don't really add up (Robinhood suspends trading today to benefit a partner who unwound their position... yesterday) and we're certainly not seeing middle ground arguments on shorting, or funds, or anything really. And people aren't going to get more open minded after they lose money in their first significant interaction with financial markets. I doubt reforms that might happen as a result are going to be what people piling on meme stocks want either.