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Roaring Kitty to testify on GameStop alongside hedge fund managers
- tape_measure 6y agoRoaringKitty is also known as DeepFuckingValue. This name is probably more well known to the general public, but Reuters does not mention it.
- dagmx 6y agoOutside of WSB memes, how well known is DFV as a monicker vs roaring kitty. To the regular person, both are not household names. To anyone who is really invested in the story, they'd know both. The very small niche of people who know one but not the other isn't worth Reuters having to include profanity (not that I object to profanity).
- C19is20 6y agoAssterisks for the pudes- D*pFuckingV*lue works.
- deleted 6y ago[deleted]
- 1f60c 6y agoI had heard about DFV but not Roaring Kitty.
- arcturus17 6y agoSame. Or rather, I had vaguely heard Roaring Kitty but didn’t know it was the same person. Learned it just now.
- pysxul 6y agoDFV = DeepFuckingValue = reddit name Roaring Kitty = youtube channel
- aikinai 6y agoI don’t think that’s true. Yes, anyone aware of or involved in the story knows DeepFuckingValue, but I often see people online—even people who worship him as their hero—surprised that he’s not some mysterious figure, but had been putting out YouTube videos for months. His videos still have shockingly low view counts considering how famous and pivotal a figure he’s become.
- lrem 6y agoTo anyone, like me, who has observed this from a safe distance : DFV is a widely-reported username. Like, you'd read it in a short news piece about the whole debacle. This post is the first time I see "Roaring Kitty".
- jbverschoor 6y agoYeah, but that's gonna be sensored out of every US channel dee-beep-lue
- jb775 6y agoHave reminder set, will be making popcorn
- yakaccount4 6y agothat sucks
- runawaybottle 6y agoBuying calls on GME for the hearing, expecting a pump up for the fiasco.
- dehrmann 6y agoI realize this is just grandstanding by congress, but it feels like there are more important things to be working on right now.
- sumedh 6y ago> but it feels like there are more important things to be working on right now. Institutions abusing the system is not important?
- Supermancho 6y agoImportant to rehash in political theater? No, it's not important.
- sumedh 6y agoThen where is the right place for that?
- Supermancho 6y ago> Then where is the right place for that? (rehash in political theater) Within the SEC or at a performing arts center, depending on what level of scrutiny, the discussion of the topic is to be given. A congressional hearing is the equivalent of a discussion between a beat cop and hostile witness at a coffee shop.
- sumedh 6y ago> Within the SEC 2008 should have demonstrated that SEC is virtually powerless to take on the big guys. The purpose of a congressional hearing is to create awareness.
- Supermancho 6y ago> 2008 should have demonstrated that SEC is virtually powerless to take on the big guys. They are the ONLY organization mandated to do so. Lacking specific power "to take on the big guys" (whatever that means) is a different issue. The SEC has the awareness of the market manipulation, as this monitoring and analysis is what they do. Congress should be speaking to them, not holding some theater. > The purpose of a congressional hearing is to create awareness. The awareness comes from media more than any other source. Are you implying that there is a lack of awareness for any individual interested in this topic? I feel like I'm talking to someone who participates in a different reality. GL with whatever.
- nbar 6y agoWhat did Gill do that was illegal?
- dagmx 6y agoThis doesn't imply that he did anything illegal. It's standard in hearings to get any/all prominent people/corporations involved to testify to paint a clearer picture for law makers to then potentially act on. It's more research than anything.
- valuearb 6y agoHe clearly violated his professional obligations, but congress doesn’t prosecute anyone, Massachusetts will if anyone does.
- dagmx 6y agoYes, personally I think he's in for some trouble with MA, but I was speaking to the congressional hearings which, like you said, aren't a prosecution. I do think he purposefully downplayed his financial history in an aim to drive up hype, and as you stated, violated his professional obligations. At best, he walked a very thin line which will be scrutinized. At worst he broke the law and will face charges, and WSB will add a new chapter to their lore either way.
- paul_f 6y agowhat professional obligations specifically?
- valuearb 6y agoHe’s a licensed broker carrying five license, working for a licensed brokerage. They aren’t allowed to make public investment recommendations.
- novia 6y agohttps://www.nytimes.com/2021/02/03/business/roaring-kitty-gamestop.html https://www.nytimes.com/2021/02/03/business/roaring-kitty-ga... He was a securities broker registered with FINRA. FINRA representatives have a whole lot of regulations placed on them. To me, the main things he did wrong were, not disclosing that he is a securities professional on his channel (as opposed to just, some guy), and not disclosing his youtube channel to his employer. > MassMutual, officially known as Massachusetts Mutual Life Insurance Company, also informed regulators that Mr. Gill gave his notice on Jan. 21 but was technically still an employee of the firm and its securities and investment advisory arm, MML Investors Services, through Jan. 28 — the week when GameStop shares surged the most.
- emteycz 6y agoWhy is the central offender - Depository Trust & Clearing Corporation - not going to be there?
- sumedh 6y agoNot sure why you are getting downvoted, DTCC played the major role in pulling the rug, they should be investigated.
- ivalm 6y agoBecause there were no offenders. DTCC raising collateral requirements on an ultravoltile stock with a high chance of price collapse is just... a reasonable thing to do?
- emteycz 6y agoSure, no problems with that. It would be reasonable to say that in advance and not lie about it.
- chrisco255 6y agoDo they have a prepublished volatility-collateral chart that applies for this and all similar scenarios or was this an adhoc rule change made arbitrarily this one time? Can you show another volatile time where similar action was taken?
- ummonk 6y agoIt was an arbitrary decision. And one which they neglected to notify the general public of.
- TameAntelope 6y agoHeh, that's a lot of work you're asking a stranger to do for you...
- emteycz 6y agoThere's no work to be done, the answer is no.
- BLKNSLVR 6y agoIs this investigating Robinhood's halting of trade? That's mentioned towards the end of the very short article, but nowhere does it explicitly specify what is being investigated and why. The article says this: "The House Financial Services Committee is examining how an apparent flood of retail trading drove GameStop and other shares to extreme highs, squeezing hedge funds like Melvin Capital that had bet against it." Which is a sentence that answers it's own question. The political ripples of this will be very interesting to watch.
- AmericanChopper 6y ago> very interesting to watch And potentially nothing more than that. House committee hearings are usually little more than a show for the media. Politicians turn up to get their sound bites, the media gets a couple of photos of public figures looking uncomfortable while being questioned, then everybody goes home and nothing else happens.
- sillysaurusx 6y agoIt's interesting watching /r/wallstreetbets oscillate between "We did nothing wrong!" to "Well okay, some people were doing some things that were wrong, but hopefully no one will notice." https://www.reddit.com/r/wallstreetbets/comments/lj8djx/day_1_of_gamestop_hearing_house_committee_on/gnbatfl/?context=2 https://www.reddit.com/r/wallstreetbets/comments/lj8djx/day_... (I don't personally believe that anyone did anything that should be prosecuted here, but what I believe is irrelevant to courts.) There is one thing that (in my un-humble, ignorant opinion) should be prosecuted: according to https://www.youtube.com/watch?v=4RS4JIEVyXM&ab_channel=Benzinga https://www.youtube.com/watch?v=4RS4JIEVyXM&ab_channel=Benzi... the reason that trades were suspended is that the clearinghouse changed their requirements from 3% to 100% for GameStop specifically. And that clearinghouse settles 95% of all trades on Wall Street, so they effectively have a monopoly. Therefore that's why all the exchanges had to suspend GME training; no one had 100% collateral to cover GME for 3 days. Everything else -- Gill getting rich, WSB posts, Citadel's bailout of Melvin, etc -- is just a distraction. I hope one day they bring that clearinghouse to heel, since it was seriously uncool for them to change the rules of the game with the justification of "we said so."
- pjc50 6y agoThe collateral requirement was imposed because of the incredibly high chance of the stock simply collapsing again. Trading halts in response to massive movements aren't unusual either.
- stingraycharles 6y agoWas a change in collateral requirement something that was known / codified in some agreement, or was it an ad-hoc decision?
- MattGaiser 6y ago> How a clearinghouse judges these risks, and therefore when it makes demands for more upfront funds, is typically formulaic. Margins can be based on equations such as value-at-risk. Exactly how the formula works, and who is responsible for losses in what order, are important elements. In the case of National Securities Clearing Corp., losses would be covered by the defaulting member’s funds before the clearinghouse’s own funds or other members’ funds would be used. https://www.wsj.com/articles/how-clearing-demands-grounded-the-wallstreetbets-stocks-for-a-day-11611966092 https://www.wsj.com/articles/how-clearing-demands-grounded-t... WSJ says that it is formulaic.
- pjc50 6y agoThis is not a prosecution, just an investigation. The one he should be more worried about is: > Massachusetts securities regulators have also issued a subpoena seeking Gill’s testimony.
- ajsharp 6y agoHey -- he likes the stock: https://www.reddit.com/r/wallstreetbets/comments/lj8djx/day_1_of_gamestop_hearing_house_committee_on/?utm_source=share&utm_medium=web2x&context=3 https://www.reddit.com/r/wallstreetbets/comments/lj8djx/day_... Nothing else matters.
- controlweather 6y agoWow so many pussies here
- mouzogu 6y agoWhat about Musk making tweets about bitcoin whilst his company has a large investment. Isn't that market manipulation or maybe does not apply to rogue billionaires.
- jatins 6y agoDoes Bitcoin trading come under the purview of SEC?
- Xenograph 6y agoIt is market manipulation, of course, but it's not the kind that's illegal.
- hntrader 6y agoPromoting something that you own isn't illegal. Jack Dorsey and thousands of others are promoting BTC while simultaneously owning it on social media. Musk also promotes TSLA and SpaceX to his benefit (since he holds equity). It may be a bit of a grey area ethically since he didn't disclose his ownership until later, but if he was doing it because he really believes in crypto and it's not just a cynical attempt to pump something he's holding and then close the position into the buying frenzy a day later, then I have no problem with it. Of course, though, it's not possible to read this intention from a distance. One interpretation is that this is in the same ethical category as Instagram influencers who get paid to flash products in front of their users without disclosing that they're being paid.
- Shacklz 6y ago> who get paid to flash products in front of their users without disclosing that they're being paid. Which is why it's not just ethically wrong but also illegal in many countries. Why the US allowing such behavior is beyond me.
- hntrader 6y agoThere's also a more charitable interpretation though. It's not clear to me that the lack of disclosure benefited Musk. Compare these two sequences of events: 1 - Initial purchase followed by disclosure followed by promotion 2 - Initial purchase followed by promotion followed by disclosure In either case, Musk bought BTC at around 35k. Do we have reason to think that the BTC price is higher now because Musk followed path (2) than (1)? It's not clear to me that that's the case here. And if it's not the case, then why on a first principles basis are we upset? I agree though that "best practice" is to disclose upfront, if for little other reason than pump and dumpers (which Musk is not) have muddied the waters and this has become a generally good tradition to uphold as a result.
- puranjay 6y agoReally disappointed at HN's recent stance on both crypto and GME. Far too many calls for regulation and control. This is not the free market proponents platform I used to know.
- Xenograph 6y agoNow it's mostly folks worried about their 401k.
- estaseuropano 6y agoHN is about hacker news, there are various viewpoints. Not everyone has to believe in the long-disproven invisible hand. I think crypto is a dangerous destabilising factor. If not reigned in, it will come crashing down on all of us when it begins to destroy the public finances of (first) smaller countries and enables he usual suspects to evade all taxes, store value in non-localisable assets, etc.
- heidar 6y agoI’m not sure I follow. People/governments can use crypto and continue paying taxes, I don’t see the connection here.
- javagram 6y agoOne of the main features of crypto is that it enables tax evasion. No need to worry about carrying suitcases of cash, gold or jewels onto an airliner anymore and getting caught when you want to move money across a border without a recorded transaction. Supposedly that’s one reason it’s big in China since miners can generate coins to move wealth outside of the country more easily than moving their Chinese fiat.
- emteycz 6y agoNo, that supposition is absolutely wrong. You can lose your head for that in China, and Bitcoin is very trackable. Nobody is doing that.
- KDJohnBrown 6y agoNice to know that the US legislature has deemed this a more important use of their time than the pandemic and the economy.
- Ekaros 6y agoI would call this action to be directly related to the economy... Albeit GMC was small stock. There could be some open questions of market stability that were clearly under-covered. It is reasonable to look into this and if similar situation could lead to larger market impact.
- KDJohnBrown 6y agoSure, and that’s what the SEC is for. I’ve been unemployed for a year and couldn’t care less about wall street. Congress has exactly two issues they should be focusing on: stimulus and vaccination. This is just another piece of theatre designed to distract us from the bigger picture. (Edit: fixed autocorrect typo)
- stereolambda 6y agoOlder RoaringKitty YT spreadsheet videos (before he became all about GME and before much of anyone watched his streams) are interesting to watch for a person casually interested in finance. They are very nerdy in discussing his approach to investing, tools etc. and don't present any clear recipes. He had/probably still has a biggish public portfolio of stocks and seemed to base it on financial analysis applying the value investing style. I thought this style is pretty much dead, because market efficiency has increased compared to the times when Benjamin Graham analysed securities by hand. (Unless you have the name recognition and capital of Buffett.) I don't know if all this was completely sincere on RoaringKitty's part. Personally I believe that he mostly was at that time. Possibly he got carried away by money and fame later. But I 1) don't have to decide it for any official body 2) was never long GME, it was already too expensive (risky) compared to fundamentals when I learned of the story. What I'm trying to say is: fraudsters tend to want to sell you something, and at least it seemed that you weren't sold anything by RK. I can get recommendations on in-depth (practical), interesting, non-pushy financial content for casual viewer. Please don't say Matt Levine, he's a (great) commentator not a practitioner. Also, I think everyone interested is aware that no one should expect money from active investing, you should use something like index funds first while already having a comfortable amount of money in safer assets etc. That's why I say casually.
- alecco 6y ago> ...applying the value investing style. I thought this style is pretty much dead, because market efficiency has increased compared to the times when Benjamin Graham analysed securities by hand I thouhgt this style is pretty much dead, because the Fed is out of control stimulating the markets. Even purchasing bonds and ETFs. As if they embraced the "stonks only go up" meme. But what about the US dollar? Hmm...
- stereolambda 6y agoIn my understanding, the fact that growth/expensive stocks rise has only an indirect influence on value/cheap stocks being worse investments. Nowadays, anyone can easily access and scan in aggregate financials and financial indicators. In the middle of the 20th century, you had to do it on paper with each stock. It was a bigger edge. So it was easier to notice something that others didn't. Still (again, in my understanding) there's some sense in assuming that lots of cash and low debt in the company (compared to the ticker price) at least limit your downside a little, when the price is at the rock bottom. Doesn't mean there's a potential for profit, because stock prices are irrational.
- Hnrobert42 6y agoCan you imagine being called to testify before Congress and the news citing the username you chose at 2am when all the other usernames were taken? “Next they’ll the calling to the floor Preston Claghorn, also known as analmudflaps247.”
- williesleg 6y agoI know who will win.
- codecamper 6y agoThe elephant in the room that I don't see much discussion about is the use of options by small retail accounts. There are piles of rules around trading in accounts < $25,000. But then those same guys are allowed to trade options. An option has a 100x built in leverage. A simple solution to this problem is to require the underlying amount of margin or cash in the account to purchase the option. ie. If you want to buy a $3 option for BBBY (costing $300) then this will take $2800 from your initial cash or margin. Yes, this effectively puts options out of reach to small investors, but... maybe that's a good thing.
- jdhn 6y ago>Yes, this effectively puts options out of reach to small investors, but... maybe that's a good thing. What a fantastic way to ensure that only The Right People (TM) can make money off of anything else other than trading shares.
- anfogoat 6y ago> What a fantastic way to ensure that only The Right People (TM) can make money off of anything To be fair though, this is why the regulators exist. And they've got their post government careers to worry about so they will have to do something behind this supposed calamity. But don't worry, like the owner who crams their cat into a brightly colored sweater, they're doing it to protect you.
- bsanr2 6y agoThis argument is equivalent to supporting the IRS going after small-time tax cheats because the big boys - with billions in public revenue lost by their fraud every year - are "too difficult" to prosecute. Regulators exist to prevent the most dire threats to a system - the system being the American economy, not simply financial markets (and their profits). They should act like it. If a crisis manufactured by Wall Street hubris and capitalized upon by retail traders functionally crashes the system by way of a massive wealth transfer, so be it. Regulators should be concerned with the setting up of the earthshaking domino set in the first place, not with taking a chainsaw to the hand that goes to knock everything over.
- fukmbas 6y agoGet the fuck outta here dude. Anyone that can afford it should be able to do it. So many bs rules against the little guy while the fat cats rob us blind. Seriously, kill yourself.