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> Perhaps I'm being too conspiratorial or cynical No need to doubt yourself on this one :D In a sense I feel like this kind of corruption is a bit like short

> Perhaps I'm being too conspiratorial or cynical No need to doubt yourself on this one :D In a sense I feel like this kind of corruption is a bit like short selling. You perform a corrupt act in the present with a tacit understanding that, at some point in the future, the beneficiaries of that act will pay you back. The fact that this is a temporal play makes it seem like its not corrupt, but in fact all it does is put white gloves on the same kind of dirty deeds that happen in poorer countries all the time.

agency 6y ago
In what way is that like short selling?
- vmception 6y ago
  They’re referring to the temporal nature of the action in which profit is generated, not the populist misunderstanding and demonization of borrowing shares.
vmception 6y ago
> all it does is put white gloves on the same kind of dirty deeds that happen in poorer countries all the time. Really its not different, you just choose to respect this process and choose to dismiss another country’s process as “corrupt bribery”. What’s happening in poorer countries is often just as roundabout.
cortesoft 6y ago
Are you saying all short selling is corrupt?
- leto_ii 6y ago
  Nope. My opinion on short-selling is, let's say, nuanced, but in this case I was making strictly a technical analogy. It feels to me like this type of corruption is a temporal play in which you "lend" your influence in the present to somebody. Using your influence they pass legislation/regulation etc. that yields them lots of money in the future. Once you leave office, the people that you lent your influence to will pay you back with the proceeds they obtained while they were making use of your influence. The more "standard" type of corruption (the kind people in nice suits usually think of when they say "corruption") doesn't involve a temporal play. You get money in the present for using your influence directly in order to benefit the people who paid you, also in the present/near future. Perhaps my analogy to short selling is not fully accurate, but this is kind of how it feels to me.
- whatever1 6y ago
  It is fishy in the first place for a long stock holder to lend their shares to speculators that will do whatever it takes to bring the price of the share down. Naked shorting should not be legal.
  - namdnay 6y ago
    Naked shorting isn’t legal. That’s why you have to borrow the shares..
    - whatever1 6y ago
      Gme was literally shorted over 100% last week.
      - cortesoft 6y ago
        That doesn’t require naked short selling. A borrows a share from B, sells it to C D borrows the share sold to C, sells it to E. The same share was borrowed twice and sold twice. That has nothing to do with naked shorting.
        whatever1 6y ago
        One of the two shorts is now naked. There is an obligation of 2 shares and availability of one. If both of the guys demand their share back at the same time, one will not get it. As I was writing it I realized that this is the definition of a Ponzi scheme. Player C thinks that they own a real share, but they own thin air.
        cortesoft 6y ago
        That isn’t naked short selling. Naked short selling means A skips the borrowing part, and just says “I have a share to sell”, but doesn’t actually have it (nor have they arranged to borrow it). They sell it, planning on buying it before they actually have to deliver it. This is illegal. My example was not naked short selling. At the end of the transactions, only E has a real share. B and C both have an IOU for a share.... they can’t loan it out again or sell it unless they recall the loan (which they can do at any time). If you think this is a Ponzi scheme, just wait until you hear about fractional reserve banking! Every single bank loans out money it doesn’t ‘have’.... it loans out money account holders put in. That means there is more money in circulation than actually exists, because the person whose money was loaned out still has their full balance in their bank account. You can read about stock lending here: https://www.marketwatch.com/story/how-to-shake-loose-change-from-your-brokerage-account-2017-04-19 https://www.marketwatch.com/story/how-to-shake-loose-change-... To your question of “if both people demand their share back they will not get it”.... this is exactly what a short squeeze is. You are right, if the lenders demand their shares back, the short sellers have to scramble to get them back... they have to buy a share on the open market to sell. Now, in normal times a short seller would just borrow a share from someone else to return to the person demanding it back, because normally there is always someone willing to lend their shares (for more and more interest as demand goes up)... of course, if all the shareholders refuse to loan out their share, shorts are screwed... and will have to pay crazy amounts of money to buy back shares that are really expensive. This is what wallstreetbets is trying to do... get all the shares owned by their users who all refuse to loan them out, driving the price ridiculously high.
- UncleOxidant 6y ago
  On several forums I participate in I'm getting hints of this idea that short selling is getting a bad reputation when in fact it can serve good purposes in a functioning market. It seems like it's becoming politically incorrect to short a stock.

agency 6y ago

In what way is that like short selling?

vmception 6y ago
They’re referring to the temporal nature of the action in which profit is generated, not the populist misunderstanding and demonization of borrowing shares.

vmception 6y ago

> all it does is put white gloves on the same kind of dirty deeds that happen in poorer countries all the time. Really its not different, you just choose to respect this process and choose to dismiss another country’s process as “corrupt bribery”. What’s happening in poorer countries is often just as roundabout.

cortesoft 6y ago

Are you saying all short selling is corrupt?

leto_ii 6y ago
Nope. My opinion on short-selling is, let's say, nuanced, but in this case I was making strictly a technical analogy. It feels to me like this type of corruption is a temporal play in which you "lend" your influence in the present to somebody. Using your influence they pass legislation/regulation etc. that yields them lots of money in the future. Once you leave office, the people that you lent your influence to will pay you back with the proceeds they obtained while they were making use of your influence. The more "standard" type of corruption (the kind people in nice suits usually think of when they say "corruption") doesn't involve a temporal play. You get money in the present for using your influence directly in order to benefit the people who paid you, also in the present/near future. Perhaps my analogy to short selling is not fully accurate, but this is kind of how it feels to me.
whatever1 6y ago
It is fishy in the first place for a long stock holder to lend their shares to speculators that will do whatever it takes to bring the price of the share down. Naked shorting should not be legal.
- namdnay 6y ago
  Naked shorting isn’t legal. That’s why you have to borrow the shares..
  - whatever1 6y ago
    Gme was literally shorted over 100% last week.
    - cortesoft 6y ago
      That doesn’t require naked short selling. A borrows a share from B, sells it to C D borrows the share sold to C, sells it to E. The same share was borrowed twice and sold twice. That has nothing to do with naked shorting.
      - whatever1 6y ago
        One of the two shorts is now naked. There is an obligation of 2 shares and availability of one. If both of the guys demand their share back at the same time, one will not get it. As I was writing it I realized that this is the definition of a Ponzi scheme. Player C thinks that they own a real share, but they own thin air.
        cortesoft 6y ago
        That isn’t naked short selling. Naked short selling means A skips the borrowing part, and just says “I have a share to sell”, but doesn’t actually have it (nor have they arranged to borrow it). They sell it, planning on buying it before they actually have to deliver it. This is illegal. My example was not naked short selling. At the end of the transactions, only E has a real share. B and C both have an IOU for a share.... they can’t loan it out again or sell it unless they recall the loan (which they can do at any time). If you think this is a Ponzi scheme, just wait until you hear about fractional reserve banking! Every single bank loans out money it doesn’t ‘have’.... it loans out money account holders put in. That means there is more money in circulation than actually exists, because the person whose money was loaned out still has their full balance in their bank account. You can read about stock lending here: https://www.marketwatch.com/story/how-to-shake-loose-change-from-your-brokerage-account-2017-04-19 https://www.marketwatch.com/story/how-to-shake-loose-change-... To your question of “if both people demand their share back they will not get it”.... this is exactly what a short squeeze is. You are right, if the lenders demand their shares back, the short sellers have to scramble to get them back... they have to buy a share on the open market to sell. Now, in normal times a short seller would just borrow a share from someone else to return to the person demanding it back, because normally there is always someone willing to lend their shares (for more and more interest as demand goes up)... of course, if all the shareholders refuse to loan out their share, shorts are screwed... and will have to pay crazy amounts of money to buy back shares that are really expensive. This is what wallstreetbets is trying to do... get all the shares owned by their users who all refuse to loan them out, driving the price ridiculously high.
UncleOxidant 6y ago
On several forums I participate in I'm getting hints of this idea that short selling is getting a bad reputation when in fact it can serve good purposes in a functioning market. It seems like it's becoming politically incorrect to short a stock.