8 ms·

when a rich person tweets something and makes a ton of money it's market manipulation. When a hedge fund tells a journo to write an article it's business as us

when a rich person tweets something and makes a ton of money it's market manipulation. When a hedge fund tells a journo to write an article it's business as usual. To be clear: I think both are worthy of the same scrutiny. The double standard is what bothers me.

ganoushoreilly 6y ago
hell, i'd argue being rich isn't even the qualifier. I'd say it's anyone that's not a part of that financial system. The powers that be in finances are nervous, the things that gave them advantage and the edge, some legit, some not, are all becoming increasingly available to retail. Mean while we allow stock shorts.. and failures to deliver to constantly roll over or be hidden in sneak behind closed door actions.
- Red_Leaves_Flyy 6y ago
  My problem with shorts is that FTDs are not punished. The punishment for a hedge fund, or other large financial firm should be painful. CEO throwing temper tantrums on Bloomberg painful. Not crippling or debilitating, but just painful enough to make these bag holders think about the potential consequences of their actions before they short. An FTD should have an automatic fine and liquidation event to allow immediate delivery. When I don't pay my bills my services get cut off and I get fined. Favourably treating company failures differently than consumers is about as anti-capitalist as things can get. This dichotomy is prima facie evidence that the stock market has been designed to be in favor of whoever has the biggest bag of cash/deepest rolodex and against the American people who despite our massive exposure to the markets have virtually no say in their operations nor the individual companies therein.
  - ganoushoreilly 6y ago
    I agree 100%
nickysielicki 6y ago
Neither deserves any scrutiny. So long as influential people exist, there will exist opportunities to profit off that influence. Forbidding this fully is impossible, which means that criminalizing it just makes unfair selective enforcement possible. This isn't justice, it's getting caught with your hand in the communal rich-influencer cookie jar. Legalize insider trading, legalize pump and dumps, let the chips fall where they may. It's happening either way, so lets just be honest about it.
- metalliqaz 6y ago
  just throw the sheep to the wolves, got it
- berniemadoff69 6y ago
  If what you are looking for is a kind of wild west (legalize white collar crime), you honestly may as well legalize murder, and let victims of white collar crime practice vigilantism
- Grustaf 6y ago
  When you say it’s impossible to “forbid”, you probably mean “prevent” as it’s most definitely possible to forbid it. Either way, the situation is the same with any crime. Obviously that is not a reason to legalize anything in particular.
  - abfan1127 6y ago
    The first rule of governance is only make laws which can be enforced without bias. If you can't enforce the law without bias, it shouldn't be a law. Put another way, the government shouldn't pick winners and losers.
    - foerbert 6y ago
      I don't see how this can hold, without some severe restrictions on what you actually mean by 'bias.' As a kind of silly example, I posit that muggings closer to police stations are more likely to result in an arrest. Now we have bias in enforcement based on police station location. Do we need to build floating police stations equidistant from every place a mugging could take place? And this is generously assuming muggings in police stations are discounted from this analysis. If you don't, perhaps muggings in police stations are legal? I strongly suspect you're somehow only applying this particular standard to (potential) white collar crime, which seems absurd.
gruez 6y ago
>when a rich person tweets something and makes a ton of money it's market manipulation. >When a hedge fund tells a journo to write an article it's business as usual. Did the hedge funds also secretly accumulated positions in assets, deceptively promoted the assets through media as valuable long-term investments, then sold their holdings as prices rose sharply following the deceptive endorsements? Because that's what macfee is being indicted for, not because he "tweets something and makes a ton of money".
- mox1 6y ago
  ...Yes, isn't that the point of a hedge fund? They probably follow the rules a bit more, but of course the hedge fund has a position. Their 200 page quarterly SEC filing (which will be released to the public in 2 weeks) clearly indicated that on page 127.
- Red_Leaves_Flyy 6y ago
  Hedge funds manipulate markets: https://www.cfainstitute.org/en/research/cfa-digest/2013/11/do-hedge-funds-manipulate-stock-prices-digest-summary https://www.cfainstitute.org/en/research/cfa-digest/2013/11/... Hedge funds routinely refuse to disclose their abnormal holdings and sell to realize profits. https://www.jstor.org/stable/43303849?seq=1 https://www.jstor.org/stable/43303849?seq=1 Former manager Jim Cramer admits as much: https://seekingalpha.com/instablog/2918951-g-hudson/1026551-how-the-big-players-manipulate-the-stock-market https://seekingalpha.com/instablog/2918951-g-hudson/1026551-... Sure I don't have some gotcha smoking gun that links some third string financial columnist to a hedge funds actions, but if I did I wouldn't be blabbering about it here. I'd report it up SEC, retain a lawyer and collect my reward.
  - gruez 6y ago
    >Hedge funds manipulate markets: >https://www.cfainstitute.org/en/research/cfa-digest/2013/11/ https://www.cfainstitute.org/en/research/cfa-digest/2013/11/... A quick skim of the article suggests that they're doing it to make their own funds look better, rather than as some sort of pump&dump scheme that you suggest. >Hedge funds routinely refuse to disclose their abnormal holdings and sell to realize profits. >https://www.jstor.org/stable/43303849?seq=1 https://www.jstor.org/stable/43303849?seq=1 the first paragraph of the introduction says why they're confidential in the first place: to avoid getting front-runned and to avoid free-riding. I don't see anything nefarious here, unless they're also simultaneously deceiving people into investing. >Former manager Jim Cramer admits as much: >https://seekingalpha.com/instablog/2918951-g-hudson/1026551- https://seekingalpha.com/instablog/2918951-g-hudson/1026551-... >First information is widely distributed to make investors wonder about the company and to put fear into those longs that hold the stock. Next, high volume shorting takes place to drive the company's share price down. Again, there's nothing wrong with holding a position in a company and spreading news about it, as long as your holdings are disclosed. Short-sellers do this all the time when they publish short reports.
wnevets 6y ago
Isn't Jim Cramer's entire existence based on pumping and dumping stocks for hedge funds?
- pas 6y ago
  As long as he's not cooperating with them and/or not holding covert positions, he can say whatever he wants.
pas 6y ago
Besides everything being "securities fraud[0]" tweets are only market manipulation if they are false/deceptive. With the right disclosures it's business as usual. [0] https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
- byset 6y ago
  "Funding secured!"

ganoushoreilly 6y ago

hell, i'd argue being rich isn't even the qualifier. I'd say it's anyone that's not a part of that financial system. The powers that be in finances are nervous, the things that gave them advantage and the edge, some legit, some not, are all becoming increasingly available to retail. Mean while we allow stock shorts.. and failures to deliver to constantly roll over or be hidden in sneak behind closed door actions.

Red_Leaves_Flyy 6y ago
My problem with shorts is that FTDs are not punished. The punishment for a hedge fund, or other large financial firm should be painful. CEO throwing temper tantrums on Bloomberg painful. Not crippling or debilitating, but just painful enough to make these bag holders think about the potential consequences of their actions before they short. An FTD should have an automatic fine and liquidation event to allow immediate delivery. When I don't pay my bills my services get cut off and I get fined. Favourably treating company failures differently than consumers is about as anti-capitalist as things can get. This dichotomy is prima facie evidence that the stock market has been designed to be in favor of whoever has the biggest bag of cash/deepest rolodex and against the American people who despite our massive exposure to the markets have virtually no say in their operations nor the individual companies therein.
- ganoushoreilly 6y ago
  I agree 100%

nickysielicki 6y ago

Neither deserves any scrutiny. So long as influential people exist, there will exist opportunities to profit off that influence. Forbidding this fully is impossible, which means that criminalizing it just makes unfair selective enforcement possible. This isn't justice, it's getting caught with your hand in the communal rich-influencer cookie jar. Legalize insider trading, legalize pump and dumps, let the chips fall where they may. It's happening either way, so lets just be honest about it.

metalliqaz 6y ago
just throw the sheep to the wolves, got it
berniemadoff69 6y ago
If what you are looking for is a kind of wild west (legalize white collar crime), you honestly may as well legalize murder, and let victims of white collar crime practice vigilantism
Grustaf 6y ago
When you say it’s impossible to “forbid”, you probably mean “prevent” as it’s most definitely possible to forbid it. Either way, the situation is the same with any crime. Obviously that is not a reason to legalize anything in particular.
- abfan1127 6y ago
  The first rule of governance is only make laws which can be enforced without bias. If you can't enforce the law without bias, it shouldn't be a law. Put another way, the government shouldn't pick winners and losers.
  - foerbert 6y ago
    I don't see how this can hold, without some severe restrictions on what you actually mean by 'bias.' As a kind of silly example, I posit that muggings closer to police stations are more likely to result in an arrest. Now we have bias in enforcement based on police station location. Do we need to build floating police stations equidistant from every place a mugging could take place? And this is generously assuming muggings in police stations are discounted from this analysis. If you don't, perhaps muggings in police stations are legal? I strongly suspect you're somehow only applying this particular standard to (potential) white collar crime, which seems absurd.

gruez 6y ago

>when a rich person tweets something and makes a ton of money it's market manipulation. >When a hedge fund tells a journo to write an article it's business as usual. Did the hedge funds also secretly accumulated positions in assets, deceptively promoted the assets through media as valuable long-term investments, then sold their holdings as prices rose sharply following the deceptive endorsements? Because that's what macfee is being indicted for, not because he "tweets something and makes a ton of money".

mox1 6y ago
...Yes, isn't that the point of a hedge fund? They probably follow the rules a bit more, but of course the hedge fund has a position. Their 200 page quarterly SEC filing (which will be released to the public in 2 weeks) clearly indicated that on page 127.
Red_Leaves_Flyy 6y ago
Hedge funds manipulate markets: https://www.cfainstitute.org/en/research/cfa-digest/2013/11/do-hedge-funds-manipulate-stock-prices-digest-summary https://www.cfainstitute.org/en/research/cfa-digest/2013/11/... Hedge funds routinely refuse to disclose their abnormal holdings and sell to realize profits. https://www.jstor.org/stable/43303849?seq=1 https://www.jstor.org/stable/43303849?seq=1 Former manager Jim Cramer admits as much: https://seekingalpha.com/instablog/2918951-g-hudson/1026551-how-the-big-players-manipulate-the-stock-market https://seekingalpha.com/instablog/2918951-g-hudson/1026551-... Sure I don't have some gotcha smoking gun that links some third string financial columnist to a hedge funds actions, but if I did I wouldn't be blabbering about it here. I'd report it up SEC, retain a lawyer and collect my reward.
- gruez 6y ago
  >Hedge funds manipulate markets: >https://www.cfainstitute.org/en/research/cfa-digest/2013/11/ https://www.cfainstitute.org/en/research/cfa-digest/2013/11/... A quick skim of the article suggests that they're doing it to make their own funds look better, rather than as some sort of pump&dump scheme that you suggest. >Hedge funds routinely refuse to disclose their abnormal holdings and sell to realize profits. >https://www.jstor.org/stable/43303849?seq=1 https://www.jstor.org/stable/43303849?seq=1 the first paragraph of the introduction says why they're confidential in the first place: to avoid getting front-runned and to avoid free-riding. I don't see anything nefarious here, unless they're also simultaneously deceiving people into investing. >Former manager Jim Cramer admits as much: >https://seekingalpha.com/instablog/2918951-g-hudson/1026551- https://seekingalpha.com/instablog/2918951-g-hudson/1026551-... >First information is widely distributed to make investors wonder about the company and to put fear into those longs that hold the stock. Next, high volume shorting takes place to drive the company's share price down. Again, there's nothing wrong with holding a position in a company and spreading news about it, as long as your holdings are disclosed. Short-sellers do this all the time when they publish short reports.

wnevets 6y ago

Isn't Jim Cramer's entire existence based on pumping and dumping stocks for hedge funds?

pas 6y ago
As long as he's not cooperating with them and/or not holding covert positions, he can say whatever he wants.

pas 6y ago

Besides everything being "securities fraud[0]" tweets are only market manipulation if they are false/deceptive. With the right disclosures it's business as usual. [0] https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...

byset 6y ago
"Funding secured!"