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>I think Robinhood didn't do anything wrong (or even incompetent) Sure they did. The CEO of Robinhood went onto CNBC and lied about why they restricted trading

>I think Robinhood didn't do anything wrong (or even incompetent) Sure they did. The CEO of Robinhood went onto CNBC and lied about why they restricted trading. https://www.msn.com/en-us/money/companies/robinhoods-ceo-denies-the-trading-platform-is-facing-liquidity-issues-amid-investor-frenzy/ar-BB1dbB35 https://www.msn.com/en-us/money/companies/robinhoods-ceo-den... Also, here is their history of other recent fuckups: https://www.cbsnews.com/news/robinhood-sec-fine-65-million/ https://www.cbsnews.com/news/robinhood-sec-fine-65-million/ "Robinhood Financial fined $65 million by SEC for misleading users" Stop making excuses for liars.

loceng 6y ago
It's amazing to me there isn't a system that we can automatically pull from, of trusted channels, that will bring into view these more "hidden" narratives - that get crowded out by the current mainstream media and journalism trying to respond quickly without doing their homework or with doing more quick reads that keep to a narrow scope of a narrative instead of a longer read that requires attention, which in fact will quell the reader's excitement or over excitement - likely leading to less viral sharing due to losing readers who aren't patient enough to read more thorough content.
- deleted 6y ago
  [deleted]
- twothamendment 6y ago
  "It's amazing to me there isn't a system that we can automatically pull from, of trusted channels..." I like it, but who gets to decide which sources are trusted?
  - loceng 6y ago
    Whatever network(s) or leadership within the system you subscribe to.
  - adventured 6y ago
    The people visiting the service decide that for themselves; they decide if they think the provider is trustworthy. You personally have to trust the person / people deciding which sources on a matter/story are trustworthy. It's a chain. That trust gets built up over a long period of time ideally, starting typically from a very modest beginning. It's worth noting that sources are often not consistent, they can be trusted on one thing and then get another thing wrong, so it certainly won't be a simple matter of dictating that This Source is good and That Source is bad (for everything). More challenging than earning that initial trust, is maintaining it, not allowing a perversion to occur over time (where the service becomes biased, irrational). For every service that gains initial trust, most inevitably lose it over time; keeping it long-term is far harder.
    - loceng 6y ago
      It's a chain, it's a hierarchy, it's leadership, governance and accountability systems - protocols and processes - and transparency towards results/outcome. It's why "historically" good brands can get taken over by relative bad actors, perhaps "just" greed, and pillage the good reputation and reach a brand has - and because they already have the resources, processes, and reach - they can maintain it more easily; it's far harder to break through the noise to create a new brand with mass mindshare than to acquire, and why acquisitions happen and conglomerates form - as a form of suppression and to continue maintaining control.
- FabHK 6y ago
  There are good sources on this, like Matt Levine's column "Money Stuff" at Bloomberg. [I just imagine a finance guy after Heartbleed or Stuxnet complaining "woe betide me, the IT coverage on CNN and Foxnews is so bad... I wish there were trusted channels to discuss these, you know, hacker news!"...] Yes, a meta system that would have the best channels available per topic (HN, Money Stuff, The Aviation Herald/PPRUNE, etc.) would be great, but I imagine it would pretty soon be exploited and overrun... Maybe it has advantages that they are generally somewhat out of the limelight?
  - loceng 6y ago
    If the good leaders aren't exploitable, and they maintain unique channels of gaining momentum and attention - say via word of mouth or succeeding at gaining attention in the news or good at piggybacking on existing amplification systems (e.g. Andrew Yang running as a Democratic, otherwise would have run as Independent, due to understanding the duopoly and mainstream media's amplification of only those two main narratives), eventually the best leaders will outshine whatever bullshit takeover and noise pollution that may try to overtake the system; that still doesn't mean there won't be attempts for manipulation and narrative capture, suppression tactics used, etc.
FabHK 6y ago
> The CEO of Robinhood went onto CNBC and lied about why they restricted trading. I'm sorry, but it is a fact of banking that you can never, ever, admit to having liquidity issues. If it triggers a bank run, then the firm is dead, and, notably, not only the employees and managers of the firm suffer, but also the clients; and they suffer more than if the run had not happened. So, what you portray as a huge nefarious plot here is just a CEO of a startup trying to keep things going until they calm down again (which, incidentally, seems to have worked). Next, the other issue with the $65m fine. As it happens, this has been discussed in depth by Matt Levine in his excellent "Money Stuff" column [1], and it's not quite as nefarious as you portray it either. Brokerages make money from a couple of sources: 1) interest on customers' cash balance (which they might pass on or not), 2) borrow fees from lending out stock to short sellers, 3) commissions, and 4) payments from market makers for order flow [2], which basically constitute a discount on the bid-ask-spread. Most brokers used to charge commission (3), but passed on most of the discount (4), giving clients a very good bid-ask-spread. What Robinhood did is charge less commission (3) (namely zero), but keep more of the discount (4), giving clients a worse bid-ask-spread. If you have small orders, you're better of with the Robinhood model of smaller fixed cost, and a somewhat higher (and hidden) proportional cost, namely a higher bid-ask-spread (ie slightly worse price). But for customers with big orders, a different broker with a small fixed fee, but a better discount = smaller bid-ask-spread = better price might have been better. (Note, btw, that everyone got prices equal to or better than the national best bid offer! It's just that you got more or less further discount on top of that.) I agree with Matt Levine that Robinhood had a compelling offer, and should have just positioned it a bit better. But again, that $65m fine was basically for not telling big clients that btw, with your size you might be better off at the competition where you pay a fixed fee but might get a better price. Yeah, not exactly Mother Theresa, but hardly egregious. There really really is enough disgusting rent seeking going around in the financial sector (student loans, payday loans, credit cards & merchant fees, HFT, ...) that you should save your ire for that. [1] section Robinhood(1) https://www.bloomberg.com/opinion/articles/2021-01-07/the-ipo-market-was-too-good https://www.bloomberg.com/opinion/articles/2021-01-07/the-ip... [2] market makers pay for retail order flow (aka "dumb money") because it tends to be small and uncorrelated and "uninformed", ie not specially predictive on price direction; so they like it better than institutional "informed" flow which might leave them with positions that lose money subsequently (adverse selection). However! As this episode showed, retail money might not be small and uncorrelated and uninformed anymore, so we'll have to see how that shakes out - I as a market maker wouldn't want to pay brokers more for sending the WSB hordes my way instead of hedge funds.
valuearb 6y ago
If he had said that Robinhood put those restrictions in place because of a liquidity crisis, he just lost every Robinhood customer all their money. That’s because Robinhood gets forced to increase collateral with everyone they do business with, everyone try’s to pull their funds out, and Robinhood files an instant bankruptcy. Meaning customers get paid a fraction of their accounts years from now. He didn’t lie, he mislead. And he did it for you. Edit: Actually to correct myself, Robinhood accounts are insured, so customers accounts are at no risk in a bankruptcy. It may have meant you couldn’t sell your shares for months, while GME slowly works its way back to $20, so I think the point about bankruptcy hurting customers stands.
Rapzid 6y ago
Do you have a link to the full interview? That first article is just a bunch of short quotes, some incomplete, some seemingly out of context. Some of the quotes address the clearing house deposit requirements. The article doesn't actually give his response AFAICT as to why they paused trading. I just can't understand how that article supports the accusation of lying.

loceng 6y ago

It's amazing to me there isn't a system that we can automatically pull from, of trusted channels, that will bring into view these more "hidden" narratives - that get crowded out by the current mainstream media and journalism trying to respond quickly without doing their homework or with doing more quick reads that keep to a narrow scope of a narrative instead of a longer read that requires attention, which in fact will quell the reader's excitement or over excitement - likely leading to less viral sharing due to losing readers who aren't patient enough to read more thorough content.

deleted 6y ago
[deleted]
twothamendment 6y ago
"It's amazing to me there isn't a system that we can automatically pull from, of trusted channels..." I like it, but who gets to decide which sources are trusted?
- loceng 6y ago
  Whatever network(s) or leadership within the system you subscribe to.
- adventured 6y ago
  The people visiting the service decide that for themselves; they decide if they think the provider is trustworthy. You personally have to trust the person / people deciding which sources on a matter/story are trustworthy. It's a chain. That trust gets built up over a long period of time ideally, starting typically from a very modest beginning. It's worth noting that sources are often not consistent, they can be trusted on one thing and then get another thing wrong, so it certainly won't be a simple matter of dictating that This Source is good and That Source is bad (for everything). More challenging than earning that initial trust, is maintaining it, not allowing a perversion to occur over time (where the service becomes biased, irrational). For every service that gains initial trust, most inevitably lose it over time; keeping it long-term is far harder.
  - loceng 6y ago
    It's a chain, it's a hierarchy, it's leadership, governance and accountability systems - protocols and processes - and transparency towards results/outcome. It's why "historically" good brands can get taken over by relative bad actors, perhaps "just" greed, and pillage the good reputation and reach a brand has - and because they already have the resources, processes, and reach - they can maintain it more easily; it's far harder to break through the noise to create a new brand with mass mindshare than to acquire, and why acquisitions happen and conglomerates form - as a form of suppression and to continue maintaining control.
FabHK 6y ago
There are good sources on this, like Matt Levine's column "Money Stuff" at Bloomberg. [I just imagine a finance guy after Heartbleed or Stuxnet complaining "woe betide me, the IT coverage on CNN and Foxnews is so bad... I wish there were trusted channels to discuss these, you know, hacker news!"...] Yes, a meta system that would have the best channels available per topic (HN, Money Stuff, The Aviation Herald/PPRUNE, etc.) would be great, but I imagine it would pretty soon be exploited and overrun... Maybe it has advantages that they are generally somewhat out of the limelight?
- loceng 6y ago
  If the good leaders aren't exploitable, and they maintain unique channels of gaining momentum and attention - say via word of mouth or succeeding at gaining attention in the news or good at piggybacking on existing amplification systems (e.g. Andrew Yang running as a Democratic, otherwise would have run as Independent, due to understanding the duopoly and mainstream media's amplification of only those two main narratives), eventually the best leaders will outshine whatever bullshit takeover and noise pollution that may try to overtake the system; that still doesn't mean there won't be attempts for manipulation and narrative capture, suppression tactics used, etc.

FabHK 6y ago

> The CEO of Robinhood went onto CNBC and lied about why they restricted trading. I'm sorry, but it is a fact of banking that you can never, ever, admit to having liquidity issues. If it triggers a bank run, then the firm is dead, and, notably, not only the employees and managers of the firm suffer, but also the clients; and they suffer more than if the run had not happened. So, what you portray as a huge nefarious plot here is just a CEO of a startup trying to keep things going until they calm down again (which, incidentally, seems to have worked). Next, the other issue with the $65m fine. As it happens, this has been discussed in depth by Matt Levine in his excellent "Money Stuff" column [1], and it's not quite as nefarious as you portray it either. Brokerages make money from a couple of sources: 1) interest on customers' cash balance (which they might pass on or not), 2) borrow fees from lending out stock to short sellers, 3) commissions, and 4) payments from market makers for order flow [2], which basically constitute a discount on the bid-ask-spread. Most brokers used to charge commission (3), but passed on most of the discount (4), giving clients a very good bid-ask-spread. What Robinhood did is charge less commission (3) (namely zero), but keep more of the discount (4), giving clients a worse bid-ask-spread. If you have small orders, you're better of with the Robinhood model of smaller fixed cost, and a somewhat higher (and hidden) proportional cost, namely a higher bid-ask-spread (ie slightly worse price). But for customers with big orders, a different broker with a small fixed fee, but a better discount = smaller bid-ask-spread = better price might have been better. (Note, btw, that everyone got prices equal to or better than the national best bid offer! It's just that you got more or less further discount on top of that.) I agree with Matt Levine that Robinhood had a compelling offer, and should have just positioned it a bit better. But again, that $65m fine was basically for not telling big clients that btw, with your size you might be better off at the competition where you pay a fixed fee but might get a better price. Yeah, not exactly Mother Theresa, but hardly egregious. There really really is enough disgusting rent seeking going around in the financial sector (student loans, payday loans, credit cards & merchant fees, HFT, ...) that you should save your ire for that. [1] section Robinhood(1) https://www.bloomberg.com/opinion/articles/2021-01-07/the-ipo-market-was-too-good https://www.bloomberg.com/opinion/articles/2021-01-07/the-ip... [2] market makers pay for retail order flow (aka "dumb money") because it tends to be small and uncorrelated and "uninformed", ie not specially predictive on price direction; so they like it better than institutional "informed" flow which might leave them with positions that lose money subsequently (adverse selection). However! As this episode showed, retail money might not be small and uncorrelated and uninformed anymore, so we'll have to see how that shakes out - I as a market maker wouldn't want to pay brokers more for sending the WSB hordes my way instead of hedge funds.

valuearb 6y ago

If he had said that Robinhood put those restrictions in place because of a liquidity crisis, he just lost every Robinhood customer all their money. That’s because Robinhood gets forced to increase collateral with everyone they do business with, everyone try’s to pull their funds out, and Robinhood files an instant bankruptcy. Meaning customers get paid a fraction of their accounts years from now. He didn’t lie, he mislead. And he did it for you. Edit: Actually to correct myself, Robinhood accounts are insured, so customers accounts are at no risk in a bankruptcy. It may have meant you couldn’t sell your shares for months, while GME slowly works its way back to $20, so I think the point about bankruptcy hurting customers stands.

Rapzid 6y ago

Do you have a link to the full interview? That first article is just a bunch of short quotes, some incomplete, some seemingly out of context. Some of the quotes address the clearing house deposit requirements. The article doesn't actually give his response AFAICT as to why they paused trading. I just can't understand how that article supports the accusation of lying.